Classmates.com 2006 Annual Report Download - page 152

(c) Notwithstanding anything contained in this Agreement to the contrary, the Rights shall not be exercisable pursuant to Section 7(a) at any
time when the Rights are redeemable hereunder.
Section 24. Exchange.
(a) The Company, at its option, upon approval by its board of directors, at any time after any Person becomes an Acquiring Person, may
exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Units of Preferred Stock at an exchange ratio equal to, subject to adjustment to reflect stock splits, stock
dividends and similar transactions occurring after the date hereof, that number obtained by dividing the Purchase Price by the then Current Per
Share Market Price per Unit of Preferred Stock on the earlier of (i) the date on which any Person becomes an Acquiring Person and (ii) the date
on which a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity) is commenced
within the meaning of Rule 14d-2(a) of the Exchange Act Regulations or any successor rule, if upon consummation thereof such Person would
be the Beneficial Owner of 15% or more of the shares of Common Stock of the Company then outstanding (such exchange ratio being
hereinafter referred to as the “Section 24(a) Exchange Ratio”). Notwithstanding the foregoing, the Company may not effect such exchange at
any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan maintained by the Company or
any of its Subsidiaries, or any trustee or fiduciary with respect to such plan acting in such capacity), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the shares of Common Stock of the Company then outstanding.
(b) Immediately upon the action of the board of directors of the Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of Units of Preferred Stock equal to the number of such Rights held by such
holder multiplied by the Section 24(a) Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided ,
however , that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner provided in this Agreement shall be deemed given, whether or not the holder receives the notice. Each
such notice of exchange will state the method by which the exchange of Units of Preferred Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of
Rights (other than Rights which have become void pursuant to the provisions of Section 7(e)) held by each holder of Rights.
(c) In the event that the number of shares of Preferred Stock authorized by the Company’s certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may be necessary to authorize additional shares of Preferred Stock for
issuance upon exchange of the Rights or make adequate provision to substitute (1) cash, (2) Common Stock of the Company or other equity
securities of the Company, (3) debt securities of the Company, (4) other assets, or (5) any combination of the foregoing, having an aggregate
value equal to the aggregate Current Per Share Market Price of the Units of Preferred Stock that would otherwise be issuable in such exchange,
all as determined by the board of directors of the Company (which determination shall be described in a statement filed with the Rights Agent
and shall be conclusive and binding on the Rights Agent, the holders of the Rights and all other persons). To the extent that the Company
determines that some action need be taken pursuant to Section 24(a), the board of directors of the Company may temporarily suspend the
exercisability of the Rights for a
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