EXHIBIT
10.1
STOCKHOLDER AGREEMENT
BETWEEN
HALLIBURTON COMPANY
AND
THE STOCKHOLDER,
AS DEFINED HEREIN
JANUARY 20, 2005
TABLE OF CONTENTS
|
SECTION 1 TERM
|
1
|
|
1.1
|
Term
|
1
|
|
1.2
|
Effect of Termination
|
1
|
|
SECTION 2 STANDSTILL
|
1
|
|
2.1
|
Standstill
|
1
|
|
SECTION 3 TRANSFERS
|
2
|
|
3.1
|
Transfers
|
2
|
|
3.2
|
Compliance Certificate
|
3
|
|
3.3
|
Invalid Transfers
|
3
|
|
3.4
|
Compliance with Securities Laws
|
3
|
|
3.5
|
Restrictive Legends
|
3
|
|
SECTION 4 REGISTRATION RIGHTS
|
4
|
|
4.1
|
Shelf Registration
|
4
|
|
4.2
|
Demand Registration Rights
|
6
|
|
4.3
|
Hedging Transactions
|
7
|
|
4.4
|
Piggyback Registration Rights
|
8
|
|
4.5
|
Additional Company Obligations
|
9
|
|
4.6
|
Additional Obligations of the Stockholder
|
11
|
|
4.7
|
Expenses of Registration
|
12
|
|
4.8
|
Indemnification
|
12
|
|
4.9
|
Rule 144
|
14
|
|
4.10
|
Assignment
|
14
|
|
4.11
|
Recapitalizations, Exchanges, etc.
|
14
|
|
SECTION 5 MISCELLANEOUS
|
14
|
|
5.1
|
Successors and Assigns
|
14
|
|
5.2
|
Benefits of Agreement Restricted to Parties
|
15
|
|
5.3
|
Notices
|
15
|
|
5.4
|
Severability
|
16
|
|
5.5
|
Construction
|
16
|
|
5.6
|
Entire Agreement
|
16
|
|
5.7
|
Counterparts
|
16
|
|
5.8
|
Governing Law
|
16
|
|
5.9
|
Transaction Costs
|
16
|
|
5.10
|
Amendment
|
16
|
|
5.11
|
Specific Performance
|
16
|
|
5.12
|
Jurisdiction; Consent to Service of Process; Waiver
|
17
|
|
5.13
|
Waiver of Jury Trial
|
17
|
|
5.14
|
Further Assurances
|
17
|
|
5.15
|
Confidentiality
|
17
|
APPENDIX
Appendix A Definitions
EXHIBITS
Exhibit A Compliance Certificate
Exhibit B
Form of “Plan of Distribution”
STOCKHOLDER AGREEMENT
This
STOCKHOLDER AGREEMENT
(this “
Agreement
”), dated as of January 20, 2005, is entered into by and
between Halliburton Company, a Delaware corporation, and the
Stockholder.
The definitions of capitalized terms used in this Agreement are set
forth in
Appendix A
.
RECITALS
In consideration of the premises and the representations,
warranties, covenants, and agreements contained in this Agreement,
the Parties hereby agree as follows:
SECTION 1
TERM
1.1
Term
. This Agreement is effective as of the date hereof until the
Termination Date. “
Termination Date
” means the date the Stockholder does not beneficially own or
hold, directly or indirectly, any Subject Shares.
1.2
Effect of Termination
. From and after the Termination Date, this Agreement shall become
null and void and of no further force or effect except for the
provisions of sections 1.2, 3.4, 4.8 and 5. Nothing in this section
1.2 shall be deemed to release any Party from any liability for its
breach of the terms, conditions, and restrictions of this Agreement
before the Termination Date.
SECTION 2
STANDSTILL
2.1
Standstill
. The Stockholder agrees that prior to the Preliminary Termination
Date, neither it nor any of its Affiliates, shall either alone or
in concert with any Person (provided that no Person who is a
counterparty to a Hedging Transaction entered into by the
Stockholder or any of its Affiliates shall be deemed to be acting
in concert with the Stockholder or any of its
Affiliates):
(a) in any manner acquire, agree to acquire, or make any proposal
to acquire, directly or indirectly, any Securities of the Company,
whether such agreement or proposal is made with or to the Company
or a third party;
(b) make any unsolicited inquiry, proposal or offer to enter into,
directly or indirectly, any sale of all or substantially all assets
or property of the Company, merger or other similar business
combination involving the Company;
(c) make, or in any way participate, directly or indirectly, in any
“solicitation” of “proxies” (as such terms
are used in the proxy rules of the SEC) to vote, or seek to advise
or influence any Person with respect to the voting of, any Voting
Securities of the Company;
(d) form, join, or in any way participate in a “group”
(within the meaning of section 13(d)(3) of the Exchange Act), with
respect to any Voting Securities of the Company for any purpose
prohibited by this section 2.1;
(e) take any action that is reasonably likely to require the
Company to make a public announcement regarding the possibility of
a merger or other similar business combination of the
Company;
(f) initiate, solicit (or participate in a solicitation), or
propose, directly or indirectly, the approval of one or more
stockholder proposals with respect to the Company or any of its
Subsidiaries;
(g) request the Company to, or seek to cause the Company (or its
Board of Directors) to, call any meeting of the stockholders of the
Company or any of its Subsidiaries;
(h) initiate any written consent of the stockholders of the Company
unless requested to do so by the Board of Directors;
(i) grant or agree to grant any proxy or other voting power to any
Person other than the Company or other Persons designated by the
Company to vote at any meeting of the stockholders of the Company,
or deposit any Voting Securities of the Company in a voting trust
or, except as specifically contemplated by this Agreement, subject
them to a voting agreement or other agreement or arrangement with
respect to the voting of such Voting Securities; or
(j) disclose any intention, plan, or arrangement inconsistent with
the foregoing.
SECTION 3
TRANSFERS
3.1
Transfers
.
(a) The Stockholder may Transfer the Subject Shares only as
permitted by, and in accordance with, section 3.1(b);
provided, however
, that once a Subject Share has been Transferred in accordance with
section 3.1(b), such Subject Share shall no longer be subject to
the restrictions set forth in this section 3.1.
(b) The Stockholder may Transfer, subject to applicable laws, the
Subject Shares only as follows:
(i) during the Preliminary Restriction Period, pursuant to a Shelf
Registration in accordance with the terms and conditions of section
4, in which the number of Subject Shares the Stockholder will be
permitted to Transfer pursuant to such Shelf Registration, combined
with any Subject Shares Transferred pursuant to section 3.1(b)(iv),
shall be limited to the applicable Agreed Volume Limitations, as
may be increased pursuant to section 4.1(b)(iii);
(ii) after the Preliminary Restriction Period and prior to the
Demand Registration Rights Termination Date, pursuant to a Demand
Registration in accordance with the terms and conditions of section
4;
(iii) prior to the Piggyback Registration Rights Termination Date,
pursuant to exercise of the Stockholder’s piggyback
registration rights in accordance with the terms and conditions of
section 4;
(iv) pursuant to a privately negotiated transaction or series of
related transactions that is exempt from the registration
requirements of the Securities Act if the following conditions are
satisfied:
(A) the number of Subject Shares Transferred pursuant to this
section 3.1(b)(iv) by the Stockholder, combined with any Subject
Shares Transferred pursuant to section 3.1(b)(i), is limited to the
applicable Agreed Volume Limitations, as may be increased pursuant
to section 4.1(b)(iii);
(B) after giving effect to the transaction, the transferee and its
Affiliates will not, after reasonable inquiry by the Stockholder,
be required to file a Schedule 13D with the SEC; and
(C) during the Preliminary Restriction Period, no suspension of the
Shelf Registration has been invoked pursuant to section 4.1(b)(i)
and is continuing;
provided
,
however,
that if the Shelf Registration is suspended pursuant to section
4.1(b)(i) during the 30 days beginning on the Funding Date, the
Stockholder may Transfer a number of Subject Shares pursuant to
this section 3.1(b)(iv) during such 30-day period equal to 2.5
million less any Subject Shares otherwise Transferred under this
section 3.1(b)(iv) or under section 3.1(b)(i) during such 30-day
period;
(v) after the Preliminary Restriction Period, pursuant to Rule 144
of the Securities Act, including Rule 144(k), if applicable;
or
(vi) as a
bona fide
pledge of Subject Shares to secure a loan.
3.2
Compliance Certificate
. Within ten Business Days following the end of each Three-Month
Period from the Funding Date until the second anniversary thereof,
the Stockholder shall execute and deliver a certificate of
compliance with section 3.1(b) in the form of
Exhibit A
attached hereto.
3.3
Invalid Transfers
. Any Transfer of Subject Shares contrary to the provisions of this
section 3 shall be null and void, and the transferee shall not be
recognized by the Company as the holder or owner of such Subject
Shares Transferred for any purpose (including voting or dividend
rights), unless and until the requirements of sections 3.1 and 3.4
have been satisfied. No Subject Share shall be Transferred on the
books of the Company until sections 3.1 and 3.4 have been
satisfied.
3.4
Compliance with Securities Laws
. The Stockholder shall not Transfer its interest in a Subject
Share at any time if such action would constitute a violation of
any federal- or state-securities or blue-sky laws, or a breach of
the conditions to any exemption from registration of such Subject
Shares under any such laws, or a breach of any undertaking or
agreement of the Stockholder entered into pursuant to such laws, or
in connection with obtaining an exemption thereunder. This section
3.4 shall survive termination of this Agreement for the maximum
period permitted by applicable law.
3.5
Restrictive Legends
.
(a) A copy of this Agreement will be filed with the Secretary of
the Company and kept with the records of the Company.
(b) Until such time as a Subject Share held by the Stockholder has
been registered pursuant to a registration statement under the
Securities Act in accordance with the terms and provisions of
section 4, the certificate representing such Subject Share
(including all certificates issued upon Transfer or in exchange
thereof or substitution therefor) shall bear the following legend
noted conspicuously on such certificate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDER AGREEMENT.
NO TRANSFER OF THESE SHARES WILL BE EFFECTIVE UNLESS AND UNTIL THE
TERMS AND CONDITIONS OF SUCH STOCKHOLDER AGREEMENT HAVE BEEN
COMPLIED WITH IN FULL AND NO PERSON MAY REQUEST THE COMPANY TO
RECORD THE TRANSFER OF ANY SHARES IF SUCH TRANSFER IS IN VIOLATION
OF SUCH STOCKHOLDER AGREEMENT. A COPY OF SUCH STOCKHOLDER AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY;
provided, however
, that upon a Transfer of any Subject Share in accordance with the
provisions of this section 3 to a Person other than any Affiliate
of the Stockholder, the transferee of such Transfer shall have the
right to require the Company to remove the second paragraph of the
foregoing legend.
(c) Until such time as a Subject Share held by the Stockholder has
been registered pursuant to a registration statement under the
Securities Act in accordance with the terms and provisions of
section 4, the certificate representing such Subject Share
(including all certificates issued upon Transfer or in exchange
thereof or substitution therefor) will also bear any legend
required under any other applicable laws, including state
securities or blue sky laws.
(d) In the event the Stockholder and/or its Affiliates acquire
beneficial ownership, directly or indirectly, of any other or
additional Securities of the Company, the Stockholder shall, and
shall cause its Affiliates, if applicable, to, submit all
certificates representing such Securities to the Company so that
the legend or legends required by this section 3.5 may be placed
thereon.
(e) The Company may make a notation on its records or give
stop-transfer instructions to any transfer agents or registrars for
the Subject Shares in order to implement the restrictions set forth
in this section 3.
SECTION 4
REGISTRATION RIGHTS
4.1
Shelf Registration
.
(a)
Shelf Registration Statement
. The Company shall prepare and file with the SEC at least 30 days
prior to the Funding Date a “shelf” registration
statement (the “Shelf Registration Statement” and any
registration effected pursuant to a Shelf Registration Statement
being referred to as a “Shelf Registration”) for an
offering to be made on a continuous basis pursuant to Rule 415 of
the Securities Act covering the Subject Shares. The Shelf
Registration Statement shall be on Form S-3 or another appropriate
form permitting registration of such Registrable Securities for
resale by the Stockholder. The Company shall not permit any
Securities other than the Registrable Securities to be included in
the Shelf Registration Statement.
The Company shall use its reasonable best efforts to cause the
Shelf Registration Statement to be declared effective under the
Securities Act on or as soon as possible after the Funding Date and
to keep the Shelf Registration Statement continuously effective
under the Securities Act until the date that is one year from the
Funding Date or such shorter period ending when all Registrable
Securities covered by the Shelf Registration Statement have been
sold in the manner set forth and as contemplated in the Shelf
Registration Statement or cease to be outstanding or cease to be
Registrable Securities (the “Effectiveness
Period”);
provided
,
however
, that if (i) the Company exercises its right to suspend the Shelf
Registration in accordance with section 4.1(b)(i) below or (ii) the
Shelf Registration Statement is not declared effective under the
Securities Act on the Funding Date, then (A) the Effectiveness
Period in respect of the related Shelf Registration Statement shall
be extended by the same number of days as the suspension period
invoked by the Company or the number of days from the Funding Date
until the Shelf Registration Statement is declared effective under
the Securities Act, respectively, or both, if applicable, and (B)
notwithstanding section 3.1, the Stockholder may Transfer the
Subject Shares pursuant to the Shelf Registration Statement during
such extension of the Effectiveness Period, subject to the Agreed
Volume Limitations, as the Agreed Volume Limitations may be
increased pursuant to section 4.1(b)(iii).
(b)
Limitations
.
(i) The Company shall have the right to suspend the effectiveness
of the Shelf Registration at any time if (A) its Chief Executive
Officer determines, in his good faith judgment, that the
registration and distribution of Registrable Securities in a Shelf
Registration would, materially impede, delay or interfere with any
firm commitment underwritten offering of Securities by the Company
(including an offering involving sales of Securities to initial
purchasers who intend to resell the Securities under Rule 144A of
the Securities Act, Regulation S or to accredited investors (as
defined in the Securities Act)) or any material acquisition,
corporate reorganization or other material transaction involving
the Company, or (B) its Chief Executive Officer determines, in his
good faith judgment based on advice of counsel, that the
registration and distribution of Registrable Securities in a Shelf
Registration would require disclosure of material nonpublic
information, and that the disclosure of such information at that
time would materially and adversely affect the Company. If either
of subclauses (A) or (B) above apply, the Company will have the
right to suspend the effectiveness of such Shelf Registration for a
period of not more than 90 days;
provided
,
however
, that the Company may not use the right set forth in this clause
(i): (x) more than once during the Effectiveness Period; (y) unless
each director and executive officer of the Company is also
prohibited by the Company’s insider trading policy or
otherwise from making purchases and sales (other than those made
pursuant to plans designed to comply with Rule 10b5-1(c)(1)(i)
under the Exchange Act) for the same reason for which the Shelf
Registration is being suspended; and (z) unless each other holder
entitled to sell equity Securities pursuant to registration rights
under a selling stockholder prospectus (other than a registration
in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt or equity Securities that are also
being registered) is, or agrees to be, subject to deferral
provisions substantially similar to, or more restrictive than,
those contained in this clause (i).
(ii) The Company shall give notice to the Stockholder at the
beginning of any suspension period under this section 4.1(b).
Following the end of any such suspension period, the Company shall
give prompt notice to the Stockholder, make any other filing with
the SEC required of it or terminate any suspension of sales it has
put into effect and take all such other commercially reasonable
actions to permit registered sales of Registrable Securities as
contemplated hereby. It is understood and agreed that this section
4.1(b) shall not prevent a Transfer permitted by section
3.1(b)(iii) or (vi).
(iii) If (A) the Company invokes its right to suspend the
effectiveness of the Shelf Registration pursuant to section
4.1(b)(i) or (B) the Shelf Registration Statement is not declared
effective under the Securities Act on the Funding Date, then the
Agreed Volume Limitations in the Three-Month Period subsequent to
any Three-Month Period in which (x) such a suspension occurs or is
continuing or (y) such Shelf Registration Statement is not declared
effective under the Securities Act, as applicable, shall be
increased by an amount of Subject Shares equal to the difference
between (I) the product of (a) the maximum number of Subject Shares
permitted to be Transferred pursuant to section 3.1(b)(i) and (iv)
in the Three-Month Period in which the suspension occurred or is
continuing or in which the Shelf Registration Statement is not
declared effective under the Securities Act, assuming such
suspension had not occurred or been continuing and such Shelf
Registration Statement had been declared effective under the
Securities Act on the Funding Date and (b) a fraction, the
numerator of which is the aggregate number of days that the Shelf
Registration was not effective and/or was suspended in the
Three-Month Period and the denominator of which is 91, and (II) the
number of Subject Shares actually Transferred pursuant to section
3.1(b)(i) and (iv) in such Three-Month Period.
(c)
Penalty Interest
. The Company and the Stockholder agree that the Stockholder will
suffer damages if the Company fails to fulfill its obligations
under this section 4.1 and that it would not be feasible to
ascertain the extent of such damages with precision. Accordingly,
the Company agrees to pay, as liquidated damages, penalty interest
on the Registrable Securities (“Penalty Interest”)
under the circumstances and to the extent set forth
below:
(i) If the Shelf Registration Statement has not been declared
effective by the SEC on or prior to the 91st day after the Funding
Date then, commencing on the Funding Date, Penalty Interest shall
accrue and be calculated daily at the Penalty Rate on an amount
equal to the product of (A) the Share Amount and (B) the Trading
Price;
provided
,
however
, that all Penalty Interest shall cease to accrue upon the earliest
to occur of (x) the expiration of the first anniversary of the
Funding Date, (y) the effectiveness of the Shelf Registration
Statement, and (z) such time as there are no Registrable Securities
outstanding.
(ii) As used in this section 4.1(c) the term “Penalty
Rate” means:
(A) 5% per annum during the first 91 days after the Funding
Date;
(B) 10% per annum from day 92 through day 182 after the Funding
Date;
(C) 20% per annum from day 183 through day 273 after the Funding
Date; and
(D) 25% per annum from day 274 through day 365 after the Funding
Date.
(iii) As used in this section 4.1(c) the term “Share
Amount” means:
(A) for purposes of calculating the Penalty Interest accruing
during the first 91 days after the Funding Date, five million
Subject Shares;
(B) for purposes of calculating the Penalty Interest accruing from
day 92 through day 182 after the Funding Date, 15 million Subject
Shares;
(C) for purposes of calculating the Penalty Interest accruing from
day 183 through day 273 after the Funding Date, the sum of (x) 15
million Subject Shares plus (y) the Penalty Average Weekly Trading
Volume applicable to days 183 through 273 after the Funding Date,
and
(D) for purposes of calculating the Penalty Interest accruing from
day 273 through day 365 after the Funding Date, the sum of (x) 15
million Subject Shares plus (y) the Penalty Average Weekly Trading
Volume applicable to days 183 through 273 after the Funding Date
plus (z) the Penalty Average Weekly Trading Volume applicable to
days 274 through 365 after the Funding Date.
(iv) Any amounts of Penalty Interest due pursuant to this section
4.1(c) will be payable in cash by wire transfer of immediately
available funds to an account designated by the Stockholder within
five Business Days of (A) the 91st day following the Funding Date,
(B) the 182nd day following the Funding Date, (C) the 273rd day
following the Funding Date, and (D) the 365th day following the
Funding Date;
provided
,
however
that if the Shelf Registration Statement is declared effective
during one of such periods, then the Penalty Interest payable shall
be prorated for such period to the effective date of the Shelf
Registration Statement.
(v) Notwithstanding the forgoing, any suspension of effectiveness
of a Shelf Registration Statement or a Shelf Registration pursuant
to section 4.1(b)(i) above shall not give rise to the obligation of
the Company to pay Penalty Interest or result in the accrual of
Penalty Interest.
4.2
Demand Registration Rights
. After the Preliminary Restriction Period and prior to the Demand
Registration Rights Termination Date, the Stockholder shall have
demand registration rights as follows:
(a)
Exercise of Demand Registration Rights
. Subject to sections 4.2(b) and (c), if the Stockholder provides
the Company with a written request that the Company file a
registration statement under the Securities Act covering the
registration of Registrable Securities owned by the Stockholder
(that request being referred to as a “Demand Request”
and such registration being referred to as a “Demand
Registration”), the Company shall within 30 days after
receiving the Demand Request, file a registration statement under
the Securities Act covering all Registrable Securities that the
Stockholder requested to be registered and, after such filing, use
commercially reasonable efforts to cause such registration
statement to be declared effective. The Demand Request shall
specify the number of shares of Registrable Securities proposed to
be sold and the manner of distribution.
(b)
Underwriting Requirements
. If requested by the Stockholder, the offering to be made pursuant
to any Demand Registration shall be an underwritten offering. The
Stockholder shall have the right to select all underwriters for any
Securities being offered pursuant to any Demand Request;
provided, however,
that, the underwriters selected by the Stockholder shall be
reasonably acceptable to the Company. The Stockholder shall
participate, and include those Registrable Securities, in the
underwriting as provided in this Agreement. If the lead managing
underwriter for an offering determines in its sole discretion that
the total amount of Securities proposed to be included in such
offering is of such an amount as would have a material adverse
effect on the offering’s success, then the Company shall have
the right to reduce the number of Securities included in the
offering to a number that the lead managing underwriter determines
in its sole discretion would not have a material adverse effect on
the offering’s success. In the event a reduction occurs, the
amount of Securities to be included in the offering shall be
reduced as follows:
(i) to the extent necessary to reduce the total number of
Securities to be included in such offering to the amount that the
lead managing underwriter determines in its sole discretion would
not have a material adverse effect on the offering’s success,
Securities offered for the account of any stockholder, other than
the Stockholder, shall be excluded from the offering;
(ii) to the extent further reduction is necessary, after
application of clause (i) above, to reduce the total number of
Securities to be included in such offering to the amount that the
lead managing underwriter determines in its sole discretion would
not have a material adverse effect on the offering’s success,
Securities offered for the account of the Company, shall be
excluded from the offering; and
(iii) to the extent further reduction is necessary, after
application of clauses (i) and (ii) above, to reduce the total
number of Securities to be included in such offering to the amount
that the lead managing underwriter determines in its sole
discretion would not have a material adverse effect on the
offering’s success, Registrable Securities offered for the
account of the Stockholder shall be excluded.
(c)
Limitations
.
(i) The Company will not be obligated to initiate any Demand
Registration at any time if (A) doing so would breach any provision
of any Stockholder’s agreement entered into pursuant to
section 4.6(d), (B) in the good faith judgment of its Chief
Executive Officer, the registration and distribution of Registrable
Securities in a Demand Registration would materially impede, delay
or interfere with any firm commitment underwritten offering of
Securities by the Company (including an offering involving sales of
Securities to initial purchasers who intend to resell the
Securities under Rule 144A of the Securities Act, Regulation S or
to accredited investors (as defined in the Securities Act)) on
which the Company has commenced work prior to receiving a Demand
Request, (C) in the good faith judgment of the Chief Executive
Officer of the Company, the registration and distribution of
Registrable Securities in a Demand Registration would materially
impede any material acquisition, corporate reorganization or other
material transaction involving the Company, or (D) its Chief
Executive Officer determines, in his good faith judgment based on
advice of counsel, that the registration and distribution of
Registrable Securities in a Demand Registration would require
disclosure of material non-public information, and that the
disclosure of such information at that time would materially and
adversely affect the Company. If any of subclauses (A) through (D)
above apply, the Company shall have the right to defer the filing
or effectiveness of the registration statement relating to such
Demand Registration for a period of not more than 120 days after
receipt of the Demand Request;
provided, however
, that the Company may not use the right set forth in this clause
(i): (x) more than once in any twelve month period, (y) unless each
director and executive officer of the Company is also prohibited by
the Company’s insider trading policy or otherwise from making
purchases and sales (other than those made pursuant to plans
designed to comply with Rule 10b5-1(c)(1)(i) under the Exchange
Act) for the same reason for which the Demand Registration is being
deferred, and (z) except for a deferral pursuant to clause (B),
unless each other holder entitled to sell equity Securities
pursuant to registration rights under a selling stockholder
prospectus (other than a registration in which the only Common
Stock being registered is Common Stock issuable upon conversion of
debt or equity Securities that are also being registered) is, or
agrees to be, subject to deferral provisions substantially similar
to or more restrictive than those contained in this clause
(i).
(ii) The Company will only be obligated to initiate a Demand
Registration if the amount of Registrable Securities to be
registered and sold pursuant to this section 4.2 in the aggregate
(A) is greater than or equal to either (x) 5 million shares of
Common Stock or (y) a Market Value of $100 million and (B) is less
than or equal to 25 million shares of Common Stock (as adjusted for
stock splits, stock distributions, reclassifications or other
reorganizations of the Company’s capital stock).
(iii) The Company will not be required to effect more than two
Demand Registrations in any 12-month period and will not be
obligated to effect any Demand Registration within 180 days after
the effective date of a previous Demand Registration. A Demand
Registration will not be deemed effected unless a registration
statement with respect thereto has become effective;
provided
,
however
, that (A) a registration which does not become effective after the
Company has filed a registration statement with respect thereto
solely by reason of the refusal to proceed of the Stockholder
(other than a refusal to proceed based upon the advice of counsel
relating to a matter with respect to the Company) shall be deemed
to have been effected by the Company, (B) if the Stockholder elects
to terminate a registration following the Company’s exercise
of any deferral right pursuant to sections 4.2(c)(i)(B) or
4.2(c)(iv), such registration shall not be deemed effected, (C) if
the Company fails to comply with its obligations under this
Agreement with respect to such Demand Registration and the
Stockholder reasonably determines, and notifies the Company, that
such failure has a material adverse effect on the Stockholder, such
registration shall not be deemed effected, and (D) if the
conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such
registration are not satisfied, other than by reason of some act or
omission by the Stockholder, such registration shall not be deemed
effected.
(iv) The Company shall give notice to the Stockholder (A) at the
beginning of any deferral period under this section 4.2(c) promptly
following its receipt of the Demand Request and (B) promptly
following the end of any such deferral period.
4.3
Hedging Transactions
.
(a) In connection with any Shelf Registration or Demand
Registration, the Company agrees that if, in the reasonable
judgment of counsel to the Stockholder, it is necessary or
desirable to register under the Securities Act any proposed Hedging
Transaction or any sales or transfers of Registrable Securities in
connection therewith, then the Company shall use its reasonable
best efforts to take such actions (which may include, among other
things, the filing of a post-effective amendment to the Shelf
Registration Statement or any registration statement filed in
connection with any Demand Registration to include additional or
changed information that is material or is otherwise required to be
disclosed, including, without limitation, a description of such
Hedging Transaction, the name of the counterparty to the Hedging
Transaction, identification of the counterparty to the Hedging
Transaction or its Affiliates as underwriters or potential
underwriters, if applicable, or any change to the “Plan of
Distribution” in such registration statement) as may
reasonably be required to register such Hedging Transactions or
sales or transfer of Registrable Securities in connection therewith
under the Securities Act in a manner consistent with the rights and
obligations of the Company hereunder with respect to the
registration of Registrable Securities;
provided, however
, that section 4.1(c) shall not be applicable to any such
post-effective amendment to the Shelf Registration Statement and
any such Demand Registration shall be deemed effected under section
4.2(c)(iii) whether or not the post-effective amendment is declared
effective.
(b) The Company further agrees to include, under the caption
“Plan of Distribution” (or the equivalent), in the
Shelf Registration Statement or any registration statement filed in
connection with any Demand Registration, and any related prospectus
(to the extent such inclusion is permitted under the applicable SEC
regulations and is consistent with comments received from the SEC
during any SEC review of such registration statement), language
substantially in the form of
Exhibit B
attached hereto and to include in each prospectus supplement filed
in connection with any proposed Hedging Transaction language
mutually agreed upon by the Company, the Stockholder and the
counterparty to the Hedging Transaction describing such Hedging
Transaction.
4.4
Piggyback Registration Rights
. Prior to the Piggyback Registration Rights Termination Date, the
Stockholder shall have piggyback registration rights as
follows:
(a)
Exercise of Piggyback Registration Rights
. If the Company proposes to register any shares of Common Stock
under the Securities Act for its own account or for the account of
any stockholder of the Company other than the Stockholder (other
than a registration on Form S-4 or such other forms as are then
prescribed under the Securities Act for the same purposes as such
form, a registration relating solely to the sale of Securities to
participants in a Company compensation, benefit or stock plan or a
registration in which the only Common Stock being registered is
Common Stock issuable upon conversion of debt or equity Securities
that are also being registered), the Company shall, at that time,
promptly give the Stockholder written notice of such registration.
Upon the written request of the Stockholder (to the extent the
Company receives such request within 10 Business Days after the
Company delivered its notice of registration under this section
4.4(a)), the Company shall, subject to the provisions of section
4.4(b), (c) and (d), cause to be registered under the Securities
Act all of the Registrable Securities that the Stockholder has
requested to be registered.
(b)
Underwriting Requirements
. If the offering for which the Company gave notice pursuant to
section 4.4(a) is an underwritten offering and the lead managing
underwriter for such offering determines in its sole discretion
that the total amount of Securities proposed to be included in such
offering, including by the Company and the Stockholder, is of such
an amount as would have a material adverse effect on the
offering’s success, then the Company shall have the right to
reduce the number of Securities, including Registrable Securities,
included in the offering to a number that the lead managing
underwriter determines in its sole discretion would not have a
material adverse effect on the offering’s success. In the
event that a reduction occurs, the amount of Registrable Securities
to be included in the offering on behalf of the Stockholder shall
be reduced as follows:
(i) if the registration of Securities is pursuant to any demand
registration rights of a stockholder (other than a Demand
Registration initiated by the Stockholder pursuant to section 4.2
of this Agreement, in which case the reduction mechanism described
in section 4.2(b) shall apply), the Securities offered by the
Stockholder, the Company and any other stockholder that desires to
exercise its piggyback registration rights, if any, shall be
excluded from the offering on a pro rata basis to the extent
necessary to reduce the total amount of Securities to be included
in the offering to such an amount as would not have a material
adverse effect on the offering’s success as determined by the
lead managing underwriter in its sole discretion; or
(ii) if the registration of Securities is initiated by the Company
and is not initiated pursuant to any demand registration rights of
any stockholder, the Securities offered by the Stockholder and any
other stockholder that desires to exercise its piggyback
registration rights, if any, shall be excluded from the offering on
a pro rata basis to the extent necessary to reduce the total amount
of Securities to be included in the offering to such an amount as
would not have a material adverse effect on the offering’s
success as determined by the lead managing underwriter in its sole
discretion.
(c)
Stockholder Right to Withdraw
. The Stockholder has the right to withdraw all or any portion of
its Registrable Securities from a registration under section 4.4(a)
at any time before the effective date of the applicable
registration statement.
(d)
Company Right to Withdraw
. The Company has the right to withdraw any registration statement
and abandon any proposed offering, subject to section 4.4(a),
without the consent of the Stockholder, notwithstanding the request
of the Stockholder to participate therein in accordance with
section 4.4(a), if the Company determines to do so in its sole
discretion.
4.5
Additional Company Obligations
. Whenever required under this Agreement to effect the registration
of any Registrable Securities, the Company shall, as expeditiously
as is commercially reasonably possible (or within any more-specific
time period this Agreement requires):
(a) at least five Business Days before filing a registration
statement, prospectus or any amendments or supplements thereto,
furnish to the Stockholder, the underwriters, and a single counsel
to the Stockholder (which counsel must be reasonably satisfactory
to the Company), copies of the registration statement, prospectus
or any amendments or supplements thereto proposed to be filed.
These documents will be subject to the review of the Stockholder,
underwriters and counsel, and the Company shall use commercially
reasonable efforts to take into account, and, if appropriate,
reflect such comments as the Stockholder, underwriters and counsel
may reasonably propose. In addition, promptly after receipt of any
and all transmittal letters and any other correspondence
(including, without limitation, comment letters) from the SEC or
any other governmental entity relating to any such registration
statement or amendment or supplement thereto relating to the
sections “Plan of Distribution” or “Selling
Stockholders” (or any such similar provision) the Company
shall furnish such transmittal letters or other correspondence to
the Stockholder and the Stockholder shall have the right to request
that the Company modify any such information contained in such
registration statement or amendment or supplement thereto
pertaining to such Stockholder in such sections, and the Company
shall use its commercially best efforts to comply with such
request;
(b) prepare and file with the SEC a registration statement with
respect to those Registrable Securities offere
