Exhibit 4.1
__________________________________________
WEEKS CORPORATION
AND
WACHOVIA BANK, N.A.
RIGHTS AGENT
_____________________
RIGHTS AGREEMENT
DATED AS OF MAY 20, 1998
__________________________________________
Table of Contents
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Section Page
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Section 1. Certain Definitions.................................................................................. 1
Section 2. Appointment of Rights Agent.......................................................................... 8
Section 3. Issuance of Right Certificates....................................................................... 8
Section 4. Form of Right Certificates........................................................................... 11
Section 5. Countersignature and Registration.................................................................... 12
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates............................................................................ 13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights........................................ 15
Section 8. Cancellation and Destruction of Right Certificates................................................... 18
Section 9. Reservation and Availability of Capital Stock........................................................ 18
Section 10. Preferred Stock Record Date.......................................................................... 21
Section 11. Adjustments to Number and Kind of Shares; Number of Rights
or Purchase Price.................................................................................... 21
Section 12. Certification of Adjustments......................................................................... 35
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power........................................................................................ 36
Section 14. Fractional Rights and Fractional Shares.............................................................. 42
Section 15. Rights of Action..................................................................................... 44
Section 16. Agreement of Right Holders........................................................................... 45
Section 17. Right Certificate Holder Not Deemed a Shareholder.................................................... 46
Section 18. Concerning the Rights Agent.......................................................................... 46
Section 19. Merger or Consolidation or Change of Name of Rights Agent............................................ 47
Section 20. Duties of Rights Agent............................................................................... 48
Section 21. Change of Rights Agent............................................................................... 51
Section 22. Issuance of New Right Certificates................................................................... 53
Section 23. Redemption and Termination........................................................................... 53
Section 24. Exchange............................................................................................. 55
Section 25. Notice of Proposed Actions........................................................................... 57
Section 26. Notices.............................................................................................. 58
Section 27. Supplements and Amendments........................................................................... 60
Section 28. Determinations and Actions by the Board.............................................................. 61
Section 29. Successors........................................................................................... 61
Section 30. Benefits of this Agreement........................................................................... 62
Section 31. Governing Law........................................................................................ 62
Section 32. Counterparts......................................................................................... 62
Section 33. Descriptive Headings................................................................................. 62
Section 34. Severability......................................................................................... 62
Exhibit A -- Form of Articles of Amendment
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights To Purchase Preferred Stock
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RIGHTS AGREEMENT
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This Agreement (this "Agreement"), dated as of May 20, 1998, between WEEKS
CORPORATION, a Georgia corporation (the "Company"), and Wachovia Bank, N.A., a
North Carolina corporation (the "Rights Agent").
W I T N E S S E T H:
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WHEREAS, the Board of Directors of the Company (i) authorized the issuance
and declared a dividend distribution of one right (a "Right") for each share of
the Common Stock (as defined herein), of the Company outstanding as of the Close
of Business (as defined herein) on June 30, 1998 (the "Record Date"), each Right
initially representing the right to purchase one one-thousandth of a share of
Preferred Stock (as defined herein), and (ii) further authorized the issuance of
one Right with respect to each share of Common Stock of the Company that shall
become outstanding between the Record Date, and the earliest of the Distribution
Date, the Expiration Date or the Final Expiration Date (each such term as
defined herein).
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
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following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the outstanding Common Stock of the Company;
provided, however, that (i) the term "Acquiring
Person" shall not include an Exempt Person or a Permitted Holder; (ii) a Person
shall not be deemed to have become an Acquiring Person for any purpose of this
Agreement if the Board of Directors in its good faith judgment determines that a
Person has inadvertently become the Beneficial Owner of 15% or more of the
outstanding Common Stock of the Company (or in the case of a Permitted Holder,
has inadvertently acquired additional shares of Common Stock of the Company so
that it is no longer a Permitted Holder) and within ten days after the date upon
which the Company shall first become aware of the occurrence of such an event,
the Board of Directors in its sole discretion provides such Person with a
fifteen day period to divest a sufficient number of shares so that such Person
no longer is the Beneficial Owner of 15% or more of the outstanding Common Stock
of the Company (or in the case of a Permitted Holder, to divest all shares of
Common Stock of the Company which prevent such Person from being a Permitted
Holder), and such Person has so divested such shares of Common Stock of the
Company at the end of any such fifteen day period and has not acquired any
additional shares of Common Stock of the Company prior to the end of such
fifteen day period; and (iii) shares of Common Stock Beneficially Owned by the
Company or any Subsidiary of the Company shall not be considered outstanding for
purposes of calculating any Person's percentage ownership of the outstanding
Common Stock of the Company.
(b) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended ("Exchange Act"), as in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "Beneficially Own," any securities:
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(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in writing), or upon
the exercise of conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "Beneficially Own,"
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates pursuant to, and
in accordance with the applicable rules and regulations promulgated under the
Exchange Act, until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "Beneficially Own," any
securities if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable by such Person on Schedule 13D or Schedule 13G
under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding,
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voting (except as described in the proviso to clause (B) of subparagraph (ii) of
this paragraph (d)) or disposing of any securities of the Company;
provided, however, that nothing in this paragraph (d) shall cause a Person
engaged in business as an underwriter of securities to be the Beneficial Owner
of, or to Beneficially Own, any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Atlanta, Georgia time, on such date; provided, however, that if such date is not
a Business Day it shall mean 5:00 P.M., Atlanta, Georgia time, on the next
succeeding Business Day.
(g) "Common Stock," when used with reference to the Company, shall
mean the common stock, par value $.01 per share, of the Company and, when used
with reference to any Person other than the Company, shall mean the capital
stock or other equity interests with the greatest per share or per unit voting
power of such other Person or, if such other Person is a Subsidiary of or is
controlled by another Person, the Person or Persons which ultimately controls
such first-mentioned Person.
(h) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii).
(i) "Continuing Director" shall mean:
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(i) any member of the Board of Directors of the Company, while such
Person is a member of the Board, who was a member of the Board immediately prior
to the date of this Agreement, and who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, or
(ii) any member of the Board of Directors, while such Person is a
member of the Board, who becomes a member of the Board subsequent to the date of
this Agreement and who is not an Acquiring Person, or an Affiliate or Associate
of an Acquiring Person, or a representative of an Acquiring Person or of any
such Affiliate or Associate, if such Person is recommended, nominated or
approved for election on the Board by a majority of the Continuing Directors
then on the Board.
(j) "Current Market Price" shall have the meaning set forth in
Section 11(d).
(k) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(l) "Distribution Date" shall have the meaning set forth in Section
3(a).
(m) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b).
(n) "Exchange Act" shall have the meaning set forth in Section 1(c).
(o) "Exempt Person" shall mean the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed, established or holding
Common Stock for or pursuant to the terms of any such plan.
(p) "Expiration Date" shall have the meaning set forth in Section
7(a).
(q) "Final Expiration Date" shall have the meaning set forth in
Section 7(a).
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(r) "NYSE" shall have the meaning set forth in Section 9(b).
(s) "Permitted Holder" shall mean any Person who would otherwise
become an Acquiring Person solely by virtue of a reduction in the number of
outstanding shares of Common Stock; provided, however, that such Person shall
not be a Permitted Holder if, subsequent to such reduction, such Person shall
become the Beneficial Owner of any additional shares of Common Stock.
(t) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(u) "Preferred Stock" shall mean shares of Series B Junior
Participating Preferred Stock, par value $.01 per share, of the Company, having
the rights, preferences and limitations set forth in the Articles of Amendment
attached to this Agreement as Exhibit A, and, to the extent there are not a
sufficient number of shares of Series B Junior Participating Preferred Stock
authorized to permit the full exercise of the then outstanding Rights, any other
series of preferred stock of the Company designated for such purpose by the
Board of Directors of the Company containing terms substantially similar to the
terms of the Series B Junior Participating Preferred Stock.
(v) "Principal Party" shall have the meaning set forth in Section
13(b).
(w) "Purchase Price" shall have the meaning set forth in Section
4(a).
(x) "Record Date" shall have the meaning set forth in the recitals
clause at the beginning of this Agreement.
(y) "Redemption Price" shall have the meaning set forth in Section
23(a).
(z) "Right Certificate" shall have the meaning set forth in Section
3(a).
(aa) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii).
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(bb) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii).
(cc) "Section 13 Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a).
(dd) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(ee) "Stock Acquisition Date" shall mean the first date of a public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such;
provided, however, that if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a), then no Stock Acquisition Date shall
be deemed to have occurred.
(ff) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii).
(gg) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary voting
power sufficient to elect a majority of the board of directors or other persons
performing similar functions are Beneficially Owned, directly or indirectly, by
such Person.
(hh) "Summary of Rights" shall have the meaning set forth in Section
3(b).
(ii) "Trading Day" shall have the meaning set forth in Section 11(d).
(jj) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
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Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with
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Section 3, shall prior to the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions of this Agreement, and
the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such co-Rights Agents as it may deem necessary or desirable. If the
Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agents shall be as the Company shall determine.
Section 3. Issuance of Right Certificates.
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(a) Until the earlier of (i) the Close of Business on the tenth day
after the Stock Acquisition Date or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person) of, or
the first public announcement of the intent of any Person (other than an Exempt
Person) to commence, a tender or exchange offer upon the successful consummation
of which such Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 15% or more of the outstanding Common Stock (irrespective of
whether any shares are actually purchased pursuant to such offer) (the earlier
of such dates described in clauses (i) and (ii) being referred to herein as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(c)) by the certificates for the Common Stock registered
in the names of the holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) each Right (and the right to receive separate Right
Certificates) will be transferable only in connection with the transfer of a
share (subject to adjustment as hereinafter provided) of Common Stock. As soon
as practicable after the Distribution Date, the Company will prepare and
execute, and the Rights Agent will send, by first class, insured, postage
prepaid mail,
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to each record holder of the Common Stock as of the Close of Business on the
Distribution Date, as shown by the records of the Company, at the address of
such holder shown on such records, a Right Certificate in substantially the form
of Exhibit B hereto ("Right Certificate") evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. As of and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates and will be transferrable separately from the Common Stock.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock,
substantially in the form attached hereto as Exhibit C ("Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of Common Stock as of
the close of business on the Record Date, at the address of such holder shown on
the records of the Company.
(c) With respect to certificates for Common Stock outstanding as of
the Record Date, until the Distribution Date (or, if earlier, the Expiration
Date or the Final Expiration Date), the Rights will be evidenced by certificates
for Common Stock registered in the names of the holders thereof together with a
copy of the Summary of Rights. Until the Distribution Date (or, if earlier, the
Expiration Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights, shall also constitute the surrender for transfer
of the Rights associated with the Common Stock represented thereby.
(d) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock) after
the Record Date, but prior to
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the earliest of the Distribution Date, the Expiration Date or the Final
Expiration Date, shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between Weeks Corporation and Wachovia Bank, N.A., as Rights
Agent, dated as of May 20, 1998 (the "Rights Agreement"),
the terms of which are incorporated herein by reference and
a copy of which is on file at the principal executive
offices of Weeks Corporation. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be
evidenced by this certificate. Weeks Corporation will mail
to the holder of this certificate a copy of the Rights
Agreement without charge after receipt by it of a written
request therefor. Under certain circumstances as provided in
the Rights Agreement, Rights issued to or beneficially owned
by Acquiring Persons or their Associates or Affiliates (as
such terms are defined in the Rights Agreement) or any
subsequent holder of such Rights will become null and void.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the earliest of the Expiration Date, the Final Expiration Date or the
Distribution Date, be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute the surrender for
transfer of the Rights associated with the Common Stock represented thereby. If
the Company purchases or acquires any Common Stock after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Stock
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with shares of Common Stock which are no
longer outstanding.
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Section 4. Form of Right Certificates.
--------------------------
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof), when, as and if
issued, shall be substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or trading system on which the
Rights may from time to time be listed or traded, or to conform to usage.
Subject to the provisions of Sections 11 and 22, the Right Certificates whenever
distributed shall be dated the Record Date and on their face shall entitle the
holders thereof to purchase such number of one one-thousandths of a share of
Preferred Stock as shall be set forth therein at the price per one one-
thousandth of a share of Preferred Stock set forth therein (the "Purchase
Price"), but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to adjustment as
provided therein and in this Rights Agreement.
(b) Notwithstanding any other provision of this Rights Agreement,
any Right Certificate that represents Rights that are or were at any time on or
after the Distribution Date Beneficially Owned by an Acquiring Person or any
Affiliate or Associate thereof (or any transferee of such Rights) shall have
impressed on, printed on, written on or otherwise affixed to it (if the Company
or the Rights Agent has knowledge that such Person is an Acquiring Person or an
Associate or Affiliate thereof or transferee of such Persons or a nominee of any
of the foregoing) the following legend:
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The Beneficial Owner of the Rights represented by this
Right Certificate is an Acquiring Person or an Affiliate
or Associate (as such terms are defined in the Rights
Agreement) of an Acquiring Person or a subsequent holder
of such Right Certificate beneficially owned by such
Persons. Accordingly, under circumstances specified in the
Rights Agreement, this Right Certificate and the Rights
represented hereby will become null and void.
Notwithstanding the above provision, failure to place such legend on any Right
Certificate representing Rights which are otherwise null and void pursuant to
the terms of this Agreement shall not affect the null and void status of such
Rights.
Section 5. Countersignature and Registration.
---------------------------------
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman, Vice Chairman, Chief Executive Officer, President or
any Vice President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be
countersigned (which countersignature may be a facsimile) by the Rights Agent
and shall not be valid for any purpose unless so countersigned. If any officer
of the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent, and issued and delivered with the same
force and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to
sign such Right
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Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates, the date of each
of the Right Certificates, and the certificate numbers for each of the Right
Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Right
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Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
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(a) Subject to the provisions of Section 14, at any time after the
Close of Business on the Distribution Date and at or prior to the Close of
Business on the earlier of the Expiration Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer any Right Certificate shall surrender the
Right Certificate at the principal office of the Rights Agent with the form of
assignment on the reverse side thereof (or enclose with such Right Certificate a
written instrument of transfer in a form satisfactory to the Company and the
Rights Agent), duly executed by the registered holder thereof or his attorney
duly authorized in writing, and with such signature duly guaranteed. Any
registered holder desiring to split up, combine or exchange any Right
Certificate shall make such request in writing delivered to
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the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be split up, combined or exchanged at the principal office of
the Rights Agent. Thereupon the Rights Agent shall countersign (which
countersignature may be a facsimile) and deliver to the person entitled thereto
a Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will execute and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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(a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including without limitation, the restrictions on
exercisability set forth in Section 9(b), Section 11(a)(iii) and Section 23(a)),
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed (with such signature duly guaranteed), to the Rights Agent
at the principal office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to each Right
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exercised, subject to adjustment as hereinafter provided, at or prior to the
earlier of (i) the Close of Business on June 30, 2008 ("Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section 23 (such
date being herein referred to as the "Expiration Date"), or (iii) the time at
which such Rights are exchanged as provided in Section 24.
(b) The Purchase Price shall initially be $125.00 for each one one-
thousandth of a share of Preferred Stock issued pursuant to the exercise of a
Right. The Purchase Price and the number of one one-thousandths of a share of
Preferred Stock or other securities or consideration to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 11 and 13. The Purchase Price shall be payable in lawful money of
the United States of America, in accordance with Section 7(c).
(c) Except as provided in Section 7(d), upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by payment of the
Purchase Price or so much thereof as is necessary for the shares or other
securities or assets to be purchased and an amount equal to any applicable
transfer tax, by cash, certified check or official bank check payable to the
order of the Company or the Rights Agent, the Rights Agent, subject to Section
20(j), shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of shares of Preferred
Stock so elected to be purchased and the Company will comply and hereby
authorizes and directs such transfer agent to comply with all such requests, or
(B) if the Company shall have elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts representing
such number of shares of
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Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14, (iii) promptly after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder, and (iv) after receipt
promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate; provided, however, that in the case of a purchase of
securities, other than Preferred Stock, pursuant to Section 13, the Rights Agent
shall promptly take the appropriate actions corresponding to the foregoing
clauses (i) through (iv). If the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a), the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate. The
Company reserves the right to require prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock would be issued.
(d) If the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14.
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(e) Notwithstanding anything in this Agreement to the contrary, any
Rights that are at any time Beneficially Owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of any such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
--------------------------------------------------
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy or cause
-17-
to be destroyed such canceled Right Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
---------------------------------------------
(a) Subject to the Company's rights under Section 11(a)(iii) to
otherwise fulfill its obligations hereunder, the Company covenants and agrees
that it will cause to be reserved and kept available, out of and to the extent
of its authorized and unissued shares of Preferred Stock not reserved for
another purpose (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock or other securities) or shares
held in its treasury, the number of shares of Preferred Stock (and, following
the occurrence of a Triggering Event, shares of Common Stock or other
securities) that, as provided in this Agreement, including Section 11(a)(iii),
will be sufficient to permit the exercise in full of all outstanding Rights;
provided, however, that the Company shall not be required to reserve and keep
available shares of Common Stock or other securities sufficient to permit the
exercise in full of all outstanding Rights pursuant to the adjustments set forth
in Section 11(a)(ii), Section 11(a)(iii) or Section 13 unless, and only to the
extent that, the Rights become exercisable pursuant to Section 7(a) following
such adjustments.
(b) The Company shall (i) use its best efforts to cause, from and
after such time as the Rights become exercisable, the Rights and all shares of
Preferred Stock (and following the occurrence of a Triggering Event, Common
Stock or other securities) issued or reserved for issuance upon exercise thereof
to be listed by the New York Stock Exchange (the "NYSE") or any other national
securities exchange upon notice of issuance upon such exercise and (ii) if then
necessary to permit the offer and issuance of such shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock or other
securities), register and qualify such shares of Preferred
-18-
Stock (and, following the occurrence of a Triggering Event, Common Stock or
other securities) under the Securities Act and any applicable state securities
or "blue sky" laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as
practicable after such filing and keep such registration and qualifications
effective until the earlier of the Expiration Date or the Final Expiration Date
of the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety days, the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained and until
a registration statement under the Securities Act (if required) shall have been
declared effective.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares in accordance with applicable law.
(d) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any shares of Preferred Stock (or shares of
-19-
Common Stock or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or the issuance or delivery of certificates
for Preferred Stock (or shares of Common Stock or other securities, as the case
may be) upon exercise of Rights in a name other than that of, the registered
holder of the Right Certificate, and the Company shall not be required to issue
or deliver a Right Certificate or certificate for Preferred Stock (or shares of
Common Stock or other securities, as the case may be) to a person other than
such registered holder until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
---------------------------
certificate for shares of Preferred Stock (or shares of Common Stock or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Stock (or Common Stock or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Stock (or Common Stock
or other securities) transfer books of the Company are open.
-20-
Section 11. Adjustments to Number and Kind of Shares; Number of Rights or
-------------------------------------------------------------
Purchase Price. The number and kind of shares subject to purchase upon the
--------------
exercise of each Right, the number of Rights outstanding and the Purchase Price
are subject to adjustment from time to time as provided in this Section 11.
(a) (i) If the Company shall at any time after the Record Date
(A) declare or pay any dividend on Preferred Stock payable in shares of
Preferred Stock, (B) subdivide or split the outstanding shares of Preferred
Stock into a greater number of shares, (C) combine or consolidate the
outstanding shares of Preferred Stock into a smaller number of shares or effect
a reverse split of the outstanding shares of Preferred Stock or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in Section 7(e) or this Section 11(a), the Purchase Price
in effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of Preferred Stock or capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, the holder thereof would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided, however, that
in no event shall the consideration to be paid upon the exercise of one such
Right be less than the per share par value of the shares of capital stock of the
-21-
Company issuable upon exercise of the Right. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii),
the adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii).
(ii) If any Person shall become an Acquiring Person (a
"Section 11(a)(ii) Event"), then subject to Section 23(a), and except as
otherwise provided in this Section 11, each holder of a Right (except as
provided below and in Section 7(e)) shall thereafter have a right to receive for
each Right, upon exercise thereof in accordance with the terms of this Agreement
and payment of a price equal to the then current Purchase Price multiplied by
the number of one one-thousandths of a share of Preferred Stock for which a
Right was theretofore exercisable, in lieu of the number of one one-thousandths
of a share of Preferred Stock for which a Right was theretofore exercisable,
such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number
of one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (such product, following such first
occurrence, shall be referred to as the "Purchase Price" with respect to each
Right for all purposes of this Agreement) by 50% of the Current Market Price per
share of Common Stock on the date of such first occurrence (such number of
shares is herein called the "Adjustment Shares"); provided that the Purchase
Price and the number of Adjustment Shares shall be further adjusted as provided
in this Agreement to reflect any events occurring after the date of such first
occurrence; and provided, further, that if the transaction that would otherwise
give rise to the foregoing adjustment is also subject to the provisions of
Section 13, then only the provisions of Section 13 hereof shall
-22-
apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
Notwithstanding the foregoing, upon the occurrence of a Section 11(a)(ii) Event,
any Rights that are or were at any time, on or after the earlier of the Stock
Acquisition Date or the Distribution Date, Beneficially Owned by the Acquiring
Person or any Associate or Affiliate of the Acquiring Person shall become null
and void and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement.
(iii) If the number of shares of Common Stock which are
authorized by the Company's articles of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii) and the Rights shall become so exercisable, to the extent
permitted by applicable law and any agreements in effect on the date hereof to
which the Company is a party, the Company shall: (A) determine the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value")
and (B) with respect to each Right (subject to Section 7(e)), upon the exercise
of such Right and payment of the applicable Purchase Price, make adequate
provision to substitute for the Adjustment Shares (1) cash, (2) a reduction in
the Purchase Price, (3) equity securities of the Company (including, without
limitation, shares, or units of shares, of special or preferred stock of the
Company which, by virtue of having dividend, voting and liquidation rights
substantially comparable to those of the Common Stock, are deemed in good faith
by the Board of Directors of the Company to have substantially the same value as
shares of Common Stock (such shares or units of shares of preferred stock are
herein called "Common Stock Equivalents")), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the foregoing, having an aggregate
value which, when added to the value of the shares of Common Stock actually
issued upon
-23-
exercise of such Right, shall have an aggregate value equal to the Current Value
(less the amount of any reduction in the Purchase Price), where such aggregate
value has been determined in good faith by the Board of Directors of the Company
based upon the advice of a nationally recognized independent investment banking
firm selected in good faith by the Board of Directors of the Company; provided,
however, that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within 30 days following the first occurrence
of a Section 11(a)(ii) Event (the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the excess of the Current Value
over the Purchase Price. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the
Rights, the 30 day period set forth above may be extended to the extent
necessary, but not more than 120 days after the Section 11(a)(ii) Trigger Date,
in order that the Company may seek shareholder approval for the authorization of
such additional shares (such 30 day period, as it may be extended, is herein
called the "Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to the first and/or second sentence of
this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
and the last sentence of Section 11(a)(ii), that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company
-24-
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Common Stock shall be the Current Market Price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit
value of any "Common Stock Equivalent" shall be deemed to equal the Current
Market Price per share of the Common Stock on such date. The Board of Directors
may, but shall not be required to, establish procedures to allocate the right to
receive Common Stock upon the exercise of the Rights among holders of Rights
pursuant to this Section 11(a)(iii).
(b) If the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period expiring within
45 calendar days after such record date) Preferred Stock, shares having the same
rights, privileges and preferences as the Preferred Stock ("Equivalent Preferred
Stock") or securities convertible into Preferred Stock or Equivalent Preferred
Stock at a price per share of Preferred Stock or Equivalent Preferred Stock (or
having a conversion price per share, if a security convertible into Preferred
Stock or Equivalent Preferred Stock) less than the Current Market Price per
share of Preferred Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Current Market
Price, and the denominator of which shall
-25-
be the number of shares of Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock and/or Equivalent Preferred
Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or all of which
may be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and if such
rights or warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(c) If the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price per share of Preferred
Stock on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the
-26-
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to a
share of Preferred Stock and the denominator of which shall be such Current
Market Price per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and if such distribution is
not so made, the Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Market Price" per
share of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of the Common Stock for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date, and for
purpose of computations made pursuant to Section 11(a)(iii), the "Current Market
Price" per share of the Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of the Common Stock for the ten
consecutive Trading Days immediately following such date; provided, however,
that if the Current Market Price per share of the Common Stock is determined
during a period following the announcement by the issuer of such Common Stock of
(i) any dividend or distribution on the Common Stock (other than a regular
quarterly cash dividend and other than the Rights), or (ii) any subdivision,
combination or reclassification of the Common Stock, and prior to the expiration
of the requisite 30 Trading Day or ten Trading Day period, as set forth above,
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification occurs, then, and in each such
case, the Current Market Price shall be properly adjusted to take into account
ex-dividend trading.
-27-
The closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE or, if the shares of Common Stock are not listed
or admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, the last quoted sale price or,
if not so quoted, the average of the high bid and low asked prices in the over-
the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System or such other system then in use, or,
if on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board of Directors of the Company. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal national
securities exchange or national market system on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange or national market system, a Business Day. If the
Common Stock is not publicly held or not so listed or traded, "Current Market
Price" per share shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company
-28-
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per share of Preferred Stock shall be determined in the
same manner as set forth for the Common Stock in Section 11(d)(i) hereof (other
than the last sentence thereof). If the Current Market Price per share of one
one-thousandth of a share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in Section 11(d)(i) hereof, the "Current Market
Price" per share of Preferred Stock shall be conclusively deemed to be an amount
equal to 100 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by the Current
Market Price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "Current Market Price"
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Company, acting by resolution of its Board of
Directors (which resolution shall be effective only if it is approved by a
majority of the Continuing Directors), whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "Current Market Price" of one
one-thousandth of a share of Preferred Stock shall be equal to the "Current
Market Price" of one share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent in the Purchase Price; provided,
however, that any adjustments which by reason
-29-
of this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of
a share of Common Stock or other security or one millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction which
mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Preferred Stock contained in Section
11(a), (b), (c), (e), (g), (h), (i), (j), (k) (l) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment
-30-
shall thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-thousandths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to this adjustment, by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price or any adjustment to the number of one one-thousandths of a
share of Preferred Stock for which a Right may be exercised, to adjust the
number of Rights, in lieu of any adjustment in the number of one one-thousandths
of a share of Preferred Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one-thousandths of a share of Preferred Stock
for which such Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
ten days later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly
-31-
as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandths of a
share of Preferred Stock and the number of one thousandths of a share which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the number of one one-
thousandths of a share of Preferred Stock issuable upon exercise of the Rights,
the Company shall take any corporate action, including using its reasonable best
efforts to obtain any required shareholder approvals, which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable one one-thousandths of a share of Preferred
Stock at such adjusted Purchase Price.
-32-
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the number of one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the Current Market Price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Stock Acquisition Date, (i) consolidate with any other Person (other
than a Subsidiary of the
-33-
Company in a transaction which complies with Section 11(o)), (ii) merge with or
into any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o)), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of related
transactions not in the ordinary course of the Company's business, assets, cash
flow or earning power aggregating more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)), if (x)
at the time of or immediately after such consolidation, merger or sale there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
shareholders of the Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 23 or Section 27,
take (or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
Section 12. Certification of Adjustments. Whenever an adjustment is made as
----------------------------
provided in Sections 11 and 13, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
giving rise to such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the Common Stock or Preferred Stock a copy of
-34-
such certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 26.
Notwithstanding the foregoing sentence, the failure of the Company to give such
notice shall not affect the validity of or the force or effect of or the
requirement for such adjustment. The Rights Agent shall be fully protected in
relying on any certificate prepared by the Company pursuant to Sections 11 and
13 and on any adjustment therein contained. Any adjustment to be made pursuant
to Sections 11 and 13 of this Agreement shall be effective as of the date of the
event giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
--------------------------------------------------------------
Power.
-----
(a) If at any time on or after the Stock Acquisition Date, directly
or indirectly, (x) the Company shall consolidate with, or merge with and into,
any other Person or Persons (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)), and the Company shall not be the
surviving or continuing corporation of such consolidation or merger, (y) any
Person or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)), shall consolidate with, or merge with and into,
the Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be converted
into or exchanged for stock or other securities of any other Person or of the
Company or cash or any other property, or (z) the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any other Person or any
Affiliate or Associate of such Person (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies with Section
11(o)), in one transaction or a series of related transactions not in the
ordinary course
-35-
of the Company's business, assets, cash flow, or earning power aggregating more
than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole), then, on the first occurrence of any such
event, proper provision shall be made so that (i) each holder of record of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof and payment of the Purchase Price in
accordance with the terms of this Agreement, such number of shares of validly
issued, fully paid and nonassessable and freely tradeable Common Stock of the
Principal Party (as defined herein), free and clear of any and all liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event hereof has occurred prior to the first
occurrence of a Section 13 Event, multiplying the Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii) Event by the
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such first occurrence of a Section
11(a)(ii) Event) and (2) dividing that product (such product, following the
first occurrence of a Section 13 Event, shall be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50% of the
Current Market Price (determined as provided in Section 11(d) with respect to
the Common Stock) per share of the common stock of such Principal Party on the
date of consummation of such Section 13 Event (or the fair market value on such
date of other securities or property of the Principal Party, as provided for
herein); provided that the Purchase Price and the number of shares of common
stock of such Principal Party issuable upon exercise of each Right shall be
further adjusted as provided in this Agreement to reflect any events occurring
after
-36-
the date of the first occurrence of a Section 13 Event; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" for all purposes of this Agreement shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 shall only apply to such Principal
Party following the first occurrence of a Section 13 Event; and (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock in accordance
with Section 9) in connection with the consummation of any such transaction as
may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights; provided, however,
that, upon the subsequent occurrence of any merger, consolidation, sale of all
or substantially all assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect of such Principal
Party, each holder of a Right shall thereupon be entitled to receive, upon
exercise of a Right and payment of the Purchase Price, such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had he, at the time of such transaction, owned the shares of Common
Stock of the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a): (A) the Person that is the issuer of
any securities into which shares of
-37-
Common Stock of the Company are converted in such merger or consolidation, or,
if there is more than one such issuer, the issuer the Common Stock of which has
the greatest market value or (B) if no securities are so issued, (x) the Person
that is the other party to the merger or consolidation and that survives said
merger or consolidation, or, if there is more than one such Person, the Person
the Common Stock of which has the greatest market value or (y) if the Person
that is the other party to the merger or consolidation does not survive the
merger or consolidation, the Person that does survive the merger or
consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in clause (z) of the
first sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons as is
the issuer of Common Stock having the greatest market value of shares
outstanding;
provided, however, that in any such case described in the foregoing (b)(i)
or (b)(ii), if the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stock of
which are and have been so registered, the term "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
market value of shares outstanding.
-38-
(c) The Company shall not consummate any consolidation, merger, sale
or transfer referred to in Section 13(a) unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and the
Principal Party involved therein shall have executed and delivered to the Rights
Agent an agreement confirming that the requirements of Sections 13(a) and (b)
shall promptly be performed in accordance with their terms and that such
consolidation, merger, sale or transfer shall not result in a default by the
Principal Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and further providing
that, as soon as practicable after executing such agreement pursuant to this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the date of expiration of
the Rights, and similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the Principal
Party shall become listed on a national securities exchange, to list (or
continue the listing of) the Rights and the securities purchasable upon exercise
of the Rights on such securities exchange and, if the Common Stock of the
Principal Party shall not be listed on a national securities exchange, to cause
the Rights
-39-
and the securities purchasable upon exercise of the Rights to be listed by a
national securities exchange or admitted for trading on the NYSE;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 (or any successor
form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the shares of Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
If any of the transactions described in Section 13(a) shall occur at any time
after the occurrence of a transaction described in Section 11(a)(ii), the Rights
which have not theretofore been exercised shall thereafter be exercisable in the
manner described in Section 13(a). The provisions of this Section 13 shall
similarly apply to all successive mergers, consolidations, sales, transfers or
other Section 13 Events.
(d) Furthermore, if the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, articles of
incorporation, bylaws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of Common Stock of such Principal Party
at less than the then Current Market Price per share (determined pursuant to
Section 11(d)(i)) or securities exercisable for, or convertible into, Common
Stock of such Principal Party at less than such then Current Market Price (other
than to holders of Rights pursuant to this Section 13) or (ii) providing for any
special payment, tax or similar
-40-
provisions in connection with the issuance of the Common Stock of such Principal
Party pursuant to the provisions of this Section 13; then, in such event, the
Company hereby agrees with each holder of Rights that it shall not consummate
any such transaction unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement
providing that the provision in question of such Principal Party shall have been
canceled, waived or amended, or that the authorized securities shall be
redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the holders of record of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the then current
market value of a whole Right. For the purposes of this Section 14(a), the then
current market value of a whole Right shall be determined in the same manner as
the Current Market Price of a share of Common Stock shall be determined pursuant
to Section 11(d)(i).
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
one-thousandths of a share of Preferred Stock) upon exercise of the Rights, or
to exchange the Rights pursuant to Section 24 of this Agreement for fractions of
Common Stock. Fractions of shares of Preferred Stock in integral multiples of
one one-thousandth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company
-41-
and a depositary selected by it, provided that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of the shares of
Preferred Stock. With respect to fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, if
the Company does not issue fractional shares or depositary receipts in lieu
thereof, the Company shall pay to the registered holders of Right Certificates
at the time such Right Certificates are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one one-
thousandth of a share of Preferred Stock. For purposes of this Section 14(b),
the current market value of one one-thousandth of a share of Preferred Stock
shall be the Current Market Price of one one-thousandth of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii)).
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one share of Common Stock. For the purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the Current Market Price of a share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof).
(d) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares (other
than fractions which are integral multiples of one one-thousandths of a share of
Preferred Stock) upon exercise of a Right.
-42-
Section 15. Rights of Action. All rights of action in respect of this
----------------
Agreement, except the rights of action given to the Rights Agent under Section
18, are vested in the respective holders of record of the Right Certificates
(and, prior to the Distribution Date, the holders of record of the Common
Stock); and any holder of record of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the Rights Agent
or of the holder of any other Right Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company or any other Person to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and, accordingly, that they will be entitled to
specific performance of the obligations under, and injunctive relief against
actual or threatened violations of the obligations of any Person subject to,
this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
--------------------------
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
-43-
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificate or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent or the transfer agent
of the Common Stock) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or a beneficial interest in a Right or other Person as a result of
its inability to perform any of its obligations under this Agreement by reason
of any preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, that the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder
-------------------------------------------------
of a Right or a Right Certificate, as such, shall be entitled to vote, receive
dividends in respect of or be deemed for any purpose to be the holder of
Preferred Stock or any other securities of the Company which may at any time be
issuable upon the exercise of the Rights, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or
-44-
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as set forth in Section 25), or to
receive dividends or subscription rights in respect of any such stock or
securities, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions of this
Agreement.
Section 18. Concerning the Rights Agent.
---------------------------
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent for anything done or omitted
to be done by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate, certificate for Common Stock or other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, guaranteed, verified or acknowledged, by the proper Person or
Persons.
-45-
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. If at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
(b) If at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver such Right Certificates so countersigned; and if at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all
-46-
such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company or its own in-house counsel), and the opinion of
such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman, Vice Chairman,
Chief Executive Officer, President, any Vice President, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature
-47-
thereof) or be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery of this
Agreement (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
or any adjustment required under the provisions hereof or responsible for the
manner, method or amount of any such change or adjustment or the ascertaining of
the existence of facts that would require any such change in the exercisability
of the Rights or any change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice of any such change
or adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock or other securities to be issued pursuant to this Agreement or
any Right Certificate or as to whether any shares of Common Stock or other
securities will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) 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 and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman, Vice Chairman,
-48-
the Chief Executive Officer, the President, any Vice President, the Secretary or
any Assistant Secretary of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall 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 resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
-49-
further action with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock and the Preferred Stock by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or without cause)
upon 30 days' notice in writing, mailed to the Rights Agent or any successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and the Preferred Stock by registered or certified mail, and to the holders of
the Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal of a
Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall fail to make
such appointment within a period of 30 days after such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the incumbent Rights Agent or the holder of record of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States or any State thereof, in good standing, which is authorized
under such laws to exercise corporate trust or stock transfer
-50-
powers and is subject to supervision or examination by federal or state
authority and which has, or together with its parent entity has, at the time of
its appointment as Rights Agent a combined capital and surplus of at least $100
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and the Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
----------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Expiration Date, the Purchase Price per share and the number or kind of
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption and Termination.
--------------------------
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (i) the Close of Business on the tenth day
following the Stock Acquisition Date (or,
-51-
if the Stock Acquisition Date shall have occurred prior to the Record Date, the
Close of Business on the tenth day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights at
a redemption price of $.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however, that if the Board of
Directors of the Company authorizes redemption of the Rights in either of the
circumstances set forth in clauses (i) and (ii) below, then there must be
Continuing Directors then in office and such authorization shall require the
concurrence of a majority of such Continuing Directors: (i) such authorization
occurs on or after the time a Person becomes an Acquiring Person, or (ii) such
authorization occurs on or within one year after the date of a change (resulting
from a proxy or consent solicitation) in a majority of the directors in office
at the commencement of such solicitation if any Person who is a participant in
such solicitation has stated (or, if upon the commencement of such solicitation,
a majority of the Board of Directors of the Company has determined in good
faith) that such Person (or any of its Affiliates or Associates) intends to
take, or may consider taking, any action which would result in such person
becoming an Acquiring Person or which would cause the occurrence of a Triggering
Event. Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption hereunder
has expired. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Market Price, as defined in Section
11(d)(i), of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors of the Company.
-52-
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. Within ten days
after such action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent and
the holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent of the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. The failure to give notice
required by this Section 23 or any defect therein shall not affect the legality
or validity of any redemption hereunder. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section 23
or in Section 24, and other than in connection with the purchase of Common Stock
prior to the Distribution Date.
Section 24. Exchange.
--------
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the
-53-
provisions of Section 7(e)) for Common Stock or Common Stock Equivalents at an
exchange ratio of one share of Common Stock or Common Stock Equivalent per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of shares of Common Stock representing 50% or more of the shares of the Common
Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock or Common Stock
Equivalents equal to the number of such Rights held by such holder multiplied by
the 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 shall
promptly mail a notice of any such exchange to all of the holders of such Rights
at the last addresses of the holders as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the shares of Common
Stock or Common Stock Equivalents for Rights will be effected and, in the event
of any partial exchange, the number and kind of Rights which will be exchanged.
The failure to give notice required by this Section 24 or any defect therein
shall not
-54-
affect the legality or validity of any exchange hereunder. Any partial exchange
shall be effected pro rata based on the number of Rights being exchanged (other
than Rights which have become void pursuant to the provisions of Section 7(e))
held by each holder of such Rights.
(c) If there shall not be sufficient shares of Common Stock issued
but not outstanding or authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company may, at its
option, take all such action as may be necessary to authorize additional shares
of Common Stock for issuance upon exchange of the Rights.
Section 25. Notice of Proposed Actions.
--------------------------
(a) If the Company, after the Stock Acquisition Date, shall
propose to (i) effect any of the transactions referred to in Section 11(a)(i) or
to pay any dividend to the holders of record of its Preferred Stock payable in
stock of any class or to make any other distribution to the holders of record of
its Preferred Stock (other than a quarterly cash dividend), (ii) offer to the
holders of record of its Preferred Stock options, warrants, or other rights to
subscribe for or to purchase shares of Preferred Stock (including any security
convertible into or exchangeable for Preferred Stock) or shares of stock of any
class or any other securities, options, warrants, convertible or exchangeable
securities or other rights, (iii) effect any reclassification of its Preferred
Stock or any recapitalization or reorganization of the Company, (iv) effect any
consolidation or merger with or into, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions not in the
ordinary course of the Company's business, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
-55-
holder of record of Rights, in accordance with Section 26, notice of such
proposed action, which shall specify the record date for the purposes of such
transaction referred to in Section 11(a)(i), or such dividend or distribution,
or the date on which such reclassification, recapitalization, reorganization,
consolidation, merger, sale or transfer of assets, liquidation, dissolution, or
winding up is to take place and the record date for determining participation
therein by the holders of record of Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record date for
determining holders of record of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of record of Preferred Stock, whichever shall be the earlier. The
failure to give notice required by this Section 25 or any defect therein shall
not affect the legality or validity of the action taken by the Company or the
vote upon any such action.
(b) If any of the transactions referred to in Section 11(a)(ii) or
Section 13 of this Agreement are proposed, then, in any such case, the Company
shall give to each holder of Rights, in accordance with Section 26, notice of
the proposal of such transaction at least 10 days prior to consummating such
transaction, which notice shall specify the proposed event and the consequences
of the event to holders of Rights under Section 11(a)(ii) or Section 13, as the
case may be, and, upon consummating such transaction, shall similarly give
notice thereof to each holder of Rights.
(c) If any Section 11(a)(ii) Event shall occur, then all
references in this Section 25 to Preferred Stock shall be deemed thereafter to
refer to the Common Stock or other securities for which the Rights are then
exercisable.
-56-
Section 26. Notices. Except as provided in Section 21, notices or demands
-------
authorized by this Agreement to be given or made by the Rights Agent or by the
holder of record of any Right Certificate or Right to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Weeks Corporation
0000 Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of record of any
Right Certificate or Right to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Wachovia Bank, N.A.
c/o Wachovia Shareholder Services, Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Right Certificate or
Right shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as
-57-
it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
Section 27. Supplements and Amendments. Prior to the Stock Acquisition
--------------------------
Date and except as provided in the third sentence of this Section 27, the
Company may in its sole and absolute discretion and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of the Rights or the Common Stock. From and
after the Stock Acquisition Date, the Company may and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement without the approval
of any holders of Rights in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, or (iii) change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable;
provided, that no such supplement or amendment shall adversely affect the
interests of the holders of Rights (other than any interest of an Acquiring
Person or an Affiliate or Associate of an Acquiring Person). Notwithstanding
anything contained in this Agreement to the contrary, this Agreement may be
supplemented or amended only with the approval of a majority of the then
Continuing Directors in the following circumstances described in clauses (i) and
(ii): (i) during the one-year period after any date of a change (resulting from
a proxy or consent solicitation) in a majority of the Board of Directors of the
Company in office at the commencement of such solicitation, or (ii) on or after
the time that a Person becomes an Acquiring Person. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the
-58-
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment.
Section 28. Determinations and Actions by the Board. For all purposes of
---------------------------------------
this Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) under the Exchange Act as in effect on the date
of this Agreement. The Board of Directors of the Company (with, where
specifically provided for herein, the concurrence of the Continuing Directors)
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board (with, where
specifically provided for herein, the concurrence of the Continuing Directors)
or to the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend this
Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors) in good faith
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board or
the Continuing Directors to any liability to the holders of the Rights.
-59-
Section 29. Successors. All of the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of record of the Right Certificates
(and, prior to the Distribution Date, the Common Stock).
Section 31. Governing Law. This Agreement, each Right and each Right
-------------
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Georgia and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
--------------------
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions of this
Agreement.
Section 34. Severability. If any term, provision, covenant or restriction
------------
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, illegal, void or
-60-
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
-61-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
Attest: WEEKS CORPORATION
By:/s/ Xxxxxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxxxx
________________________ ________________________
Name: Xxxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxxx
Title: Secretary Title: Senior Vice President and
Chief Financial Officer
Attest: WACHOVIA BANK, N.A.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxxx
________________________ _________________________
Name: Xxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President Title: Senior Vice President
-62-
EXHIBIT A
---------
FORM OF
ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
WEEKS CORPORATION
I.
The name of the corporation is Weeks Corporation (the "Corporation").
II.
The amendment (the "Amendment") is to add the following as a new Section
2.2.2 of the Corporation's Restated Articles of Incorporation, as amended (the
"Articles of Incorporation"), to determine the terms of a series of the
Preferred Stock. All capitalized terms used herein shall have the meanings
ascribed to them in the Articles of Incorporation.
"Section 2.2.2. Series B Junior Participating Preferred Stock.
---------------------------------------------
(i) TITLE; NUMBER. The shares of such series shall be designated as
"Series B Junior Participating Preferred Stock" (the "Series B Preferred Stock")
and the number of shares constituting the Series B Preferred Stock shall be
100,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
--------
shares of Series B Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series B
Preferred Stock.
(ii) DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series B Preferred Stock with respect to
A-1
dividends, the holders of shares of Series B Preferred Stock, in preference
to the holders of common stock, par value $.01 per share (the "Common
Stock"), of the Corporation, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in
cash on the last day of each January, April, July and October or, if not a
Business Day (as hereinafter defined), the next succeeding Business Day in
each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series B
Preferred Stock, in an amount per share (rounded to the nearest cent) equal
to the greater of (1) $1.00 or (2) subject to the provision for adjustment
hereinafter set forth, 1,000 times the aggregate per share amount of all
cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share
of Series B Preferred Stock. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount
to which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under clause (2) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event, and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
"Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in
New York City are authorized or required by law, regulation or executive
order to close.
(B) The Corporation shall declare a dividend or distribution on the
Series B Preferred Stock as provided in subparagraph (A) of this paragraph
(ii) immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$1.00 per share on the Series B Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first
A-2
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series B
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series B Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series B
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
(iii) VOTING RIGHTS. The holders of shares of Series B Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Preferred Stock shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event, and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other amendment to
the Articles of Incorporation creating a series of Preferred Stock or any
similar stock, or by law, the holders of shares of Series B Preferred Stock
and the holders of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class
on all matters submitted to a vote of shareholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series B Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
A-3
(iv) CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred Stock as provided in paragraph (ii) are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(1) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or the
distribution of assets upon liquidation, dissolution or winding up) to
the Series B Preferred Stock;
(2) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on parity (either as to dividends or
the distribution of assets upon liquidation, dissolution or winding
up) with the Series B Preferred Stock, except dividends paid ratably
on the Series B Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(3) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or the
distribution of assets upon liquidation, dissolution or winding up) to
the Series B Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or the distribution of assets upon
liquidation, dissolution or winding up) to the Series B Preferred
Stock; or
(4) redeem or purchase or otherwise acquire for consideration
any shares of Series B Preferred Stock, or any shares of stock ranking
on a parity with the Series B Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under
subparagraph (A) of this paragraph (iv), purchase or otherwise acquire such
shares at such time and in such manner.
(v) REACQUIRED SHARES. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become
A-4
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and restrictions on
issuance set forth herein, in the Articles of Incorporation, or in any other
amendment to Articles of Incorporation creating a series of Preferred Stock or
any similar stock or as otherwise required by law.
(vi) LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (A)
to the holders of shares of stock ranking junior (either as to dividends or the
distribution of assets upon liquidation, dissolution or winding up) to the
Series B Preferred Stock unless, prior thereto, the holders of shares of Series
B Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (B) to the holders of shares of stock ranking on a parity
(either as to dividends or the distribution of assets upon liquidation,
dissolution or winding up) with the Series B Preferred Stock, except
distributions made ratably on the Series B Preferred Stock and all such parity
stock in proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution or winding up. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event under the proviso in clause (A) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event, and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(vii) CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or converted into other stock or
securities, cash or any other property, then in any such case each share of
Series B Preferred Stock shall at the same time be similarly exchanged or
converted into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash or any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is exchanged or converted. In
the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or conversion of shares of Series B Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock
A-5
outstanding immediately after such event, and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(viii) NO REDEMPTION. The shares of Series B Preferred Stock shall not be
redeemable.
(ix) RANK. The Series B Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Corporation's Preferred Stock.
(x) AMENDMENT. The Articles of Incorporation shall not be amended in
any manner which would materially alter or change the powers, preferences or
special rights of the Series B Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series B Preferred Stock, voting together as a single
class."
III.
This Amendment was adopted by the Board of Directors on May 20, 1998.
IV.
This Amendment was duly adopted by the Board of Directors without shareholder
approval, as such approval was not required.
A-6
IN WITNESS WHEREOF, Weeks Corporation has caused these Articles of Amendment
to be executed and sealed by its duly authorized officers this _____ day of
June, 1998.
___________________________________
A.R. Weeks, Jr.
Chairman and Chief Executive Officer
Attest:
______________________________
Xxxxxxxxx X. Xxxxxx
Vice President and Secretary
A-7
EXHIBIT B
---------
[Form of Right Certificate]
Certificate No. R-__ _______ Rights
NOT EXERCISABLE AFTER JUNE 30, 2008 OR UNDER CERTAIN
CIRCUMSTANCES EARLIER. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. IF THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR
AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR A TRANSFEREE
OF THE RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY WILL BECOME NULL
AND VOID.
Right Certificate
WEEKS CORPORATION
This certifies that _________________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of May 20, 1998 (the "Rights Agreement") between Weeks
Corporation, a Georgia corporation (the "Company"), and Wachovia Bank, N.A., a
[______] corporation (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., Atlanta, Georgia time, on June 30, 2008, at
the principal office of the Rights Agent, or its successors as Rights Agent, one
one-thousandth of a fully paid and nonassessable share of Series B Junior
Participating Preferred Stock, $.01 par value per share ("Preferred Stock"), of
the Company at a purchase price of $125.00 as the same may from time to time be
adjusted in accordance with the
B-1
Rights Agreement ("Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of shares
of Preferred Stock which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
June 30, 1998 (the "Record Date") based on the shares of Preferred Stock of the
Company as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of shares of Preferred Stock which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events
and, upon the happening of certain events, securities other than shares of
Preferred Stock, or other property, may be acquired upon exercise of the Rights
evidenced by this Right Certificate, as provided by the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of record of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company
and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder of record to purchase a like aggregate
number of one one-thousandths of a share of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase.
B-2
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at its option at a
redemption price of $.001 per Right or (ii) may be exchanged in whole or in part
for shares of common stock, $.01 par value per share of the Company ("Common
Stock") or common stock equivalents.
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than, except as set forth above,
fractions that are integral multiples of one one-thousandth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof, cash payment will be made, as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Preferred Stock or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement) or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
B-3
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
B-4
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal, dated as of ______________ ____.
ATTEST: WEEKS CORPORATION
________________________________ By:______________________________
Secretary Name:
Title:
Countersigned:
WACHOVIA BANK, N.A.
By______________________________
Authorized signature
B-5
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfers unto _______________________________________________________________
___________________________________________________________________________
(Please print name and address of transferee)
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
_____________________ Attorney to transfer the within Right Certificate on the
books of the within-named Company, with full power of substitution.
Dated: ___________ , ____
__________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
___________________________________
B-6
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [_] are [_] are
not being sold, assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [_] did [_] did not acquire the Rights evidenced by this Right Certificate
from any Person who is or was an Acquiring Person or an Affiliate or Associate
of an Acquiring Person or any transferee of such Persons.
Dated: ____________, ____
__________________________________
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
B-7
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if registered holder desires to
Exercise the Right Certificate.)
To: Weeks Corporation
The undersigned hereby irrevocably elects to exercise ____________________
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock issuable upon the exercise of such Rights and requests that certificates
for such share(s) be issued in the name:
Please insert social security
or other identifying number
____________________________________________
(Please print name and address)
____________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
____________________________________________
(Please print name and address)
____________________________________________
Dated: ______________, ____
__________________________________
Signature
(Signature must conform in all respects
to name of holder as specified on
the face of this Right Certificate)
B-8
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
___________________________________
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [_] are [_] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [_] did [_] did not acquire the Rights evidenced by this Right Certificate
from any Person who is or was an Acquiring Person or an Affiliate or Associate
of an Acquiring Person or any transferee of such Persons.
Dated: ______________, _____
__________________________________
Signature
B-9
EXHIBIT C
---------
WEEKS CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On May 20, 1998, the Board of Directors of Weeks Corporation (the
"Company") adopted a Shareholder Rights Plan pursuant to a Rights Agreement (the
"Rights Agreement") and authorized and declared a dividend of one Preferred
Stock Purchase Right (a "Right") with respect to each outstanding share of
common stock, par value $.01 per share ("Common Stock"), of the Company. The
dividend is payable on June 30, 1998 to the shareholders of record on that date
(the "Record Date"), and to each holder of Common Stock issued thereafter until
the Distribution Date (as hereinafter defined) or the expiration or earlier
redemption of the Rights. Except as set forth below, each Right entitles the
registered holder thereof to purchase from the Company at any time after the
Distribution Date one one-thousandths of one share of Series B Junior
Participating Preferred Stock, par value $.01 per share ("Preferred Stock"), at
a price of $125.00 per one one-thousandths of one share, subject to adjustment
(the "Purchase Price"). The description and terms of the Rights are set forth
in the Rights Agreement.
Initially, the Rights will attach to all certificates of outstanding shares
of Common Stock, and no separate Right Certificates (as hereinafter defined)
will be distributed. The Rights will become exercisable and separate from the
shares of Common Stock upon the earlier to occur of (i) ten days after the date
(the "Stock Acquisition Date") of a public announcement that a person or group
of affiliated or associated persons has acquired beneficial ownership of 15% or
more of the outstanding Common Stock (such person or group being hereinafter
referred to as an "Acquiring Person"/2/); or (ii) ten business days (or such
later date as the Board may determine) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer, the
consummation of which would result in a person or group becoming the beneficial
owner of 15% or more of the outstanding Common Stock (the earlier of such dates
in clauses (i) and (ii) being called the "Distribution Date"). Shares of Common
Stock beneficially owned by the Company or any subsidiary of the Company will
not be considered outstanding for purposes of calculating the percentage
ownership of any person.
_____________________
/2/Each of the following persons will not be deemed to be an Acquiring
Person even if they have acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Stock: (i) the Company, any
subsidiary of the Company, or any employee benefit plan of the Company or of any
subsidiary of the Company, and (ii) any person who would otherwise become an
Acquiring Person solely by virtue of a reduction in the number of outstanding
shares of Common Stock unless and until such person shall become the beneficial
owner of any additional shares of Common Stock.
C-1
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be evidenced by the certificates for the Common
Stock, (ii) the Rights will be transferred with, and only with, the shares of
Common Stock, (iii) new Common Stock certificates issued after the Record Date
upon transfer or new issuance of shares of Common Stock will contain a notation
incorporating the Rights Agreement by reference, and (iv) the surrender for
transfer of any certificates for shares of Common Stock outstanding as of the
Record Date, even without such notation, will also constitute the transfer of
the Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (collectively, the "Right Certificates") will
be mailed to holders of record of the shares of Common Stock as of the close of
business on the Distribution Date, and such separate Right Certificates alone
will evidence the Rights. The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on June 30, 2008, unless
earlier redeemed by the Company as described below.
If any person becomes an Acquiring Person, each holder of a Right will
thereafter have the right (the "Flip-In Right") to receive, in lieu of shares of
Preferred Stock and upon payment of the Purchase Price, shares of Common Stock
(or in certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the Purchase Price of the Right.
Notwithstanding the foregoing, all Rights that are, or were, beneficially owned
by an Acquiring Person or any affiliate or associate thereof will be null and
void and not exercisable.
If, at any time on or after the Stock Acquisition Date, (i) the Company is
acquired in a merger or other business combination transaction in which the
holders of all of the outstanding shares of Common Stock immediately prior to
the consummation of the transaction are not the holders of all of the surviving
corporation's voting power, or (ii) more than 50% of the Company's assets, cash
flow or earning power is sold or transferred other than in the ordinary course
of the Company's business, then each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right (the
"Flip-Over Right") to receive, in lieu of shares of Preferred Stock and upon
exercise and payment of the Purchase Price, common shares of the acquiring
company having a value equal to two times the Purchase Price. If a transaction
would otherwise result in a holder's having a Flip-In as well as a Flip-Over
Right, then only the Flip-Over Right will be exercisable. If a transaction
results in a holder's having a Flip-Over Right subsequent to a transaction
resulting in a holder's having a Flip-In Right, a holder will have Flip-Over
Rights only to the extent such holder's Flip-In Rights have not been exercised.
The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding dividends payable in Preferred Stock) or of
C-2
subscription rights or warrants (other than those referred to above). However,
no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1%.
The number of outstanding Rights and the number of one one-thousandths of a
share of Preferred Stock issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each whole share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment equal to the greater of (i) $1.00 per
share or (ii) 1,000 times the dividend declared per share of Common Stock. In
the event of liquidation, the holders of the Preferred Stock will be entitled to
a minimum preferential liquidation payment equal to the greater of (x) $1,000
per share or (y) 1,000 times the payment made per share of Common Stock. Each
whole share of Preferred Stock will have 1,000 votes, voting together with the
Common Stock. Finally, in the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged for or converted into
other stock or securities, cash and/or other property, each whole share of
Preferred Stock will be entitled to receive 1,000 times the amount received per
share of Common Stock. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-thousandths interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
At any time after a Person becomes an Acquiring Person and before the
acquisition by a Person of 50% or more of the outstanding Common Stock of the
Company, the Board of Directors may, at its option, issue Common Stock or common
stock equivalents of the Company in mandatory redemption of, or in exchange for,
all or part of the then outstanding exercisable Rights (other than Rights owned
by such Acquiring Person which would become null and void) at an exchange ratio
of one share of Common Stock, or common stock equivalents equal to one share of
Common Stock, per Right, subject to adjustment.
To the extent that, after the triggering of Flip-In Rights, insufficient
shares of Common Stock are available for the exercise in full of the Rights,
holders of Rights will receive upon exercise shares of Common Stock to the
extent available and then cash, property or other securities of the Company, in
proportions determined by the Company, so that the aggregate value received is
equal to twice the Purchase Price.
The Company is not required to issue fractional Preferred Shares (other
than fractions which are integral multiples of one one-thousandths of a
Preferred Share, which may, at the election of the Company be evidenced by
depositary receipts), and in lieu thereof, a payment in cash will be made to the
holder of such Rights equal to the same fraction of the current value of one
one-thousandths
C-3
of a share of Preferred Stock. Following the triggering of the Flip-In Rights,
the Company will not be required to issue fractional shares of Common Stock upon
exercise of the Rights and, in lieu thereof, a payment in cash will be made to
the holder of such Rights equal to the same fraction of the current market value
of a share of Common Stock.
At any time prior to the Stock Acquisition Date, the Board of Directors of
the Company may redeem all, but not less than all, of the then outstanding
Rights at a price of $.001 per Right (the "Redemption Price"); provided,
however, that if the authorization to redeem the Rights occurs within one year
after the date of a change in a majority of the Board of Directors of the
Company as a result of certain hostile proxy or consent solicitations, then the
redemption of the Rights will require the approval of a majority of the
Continuing Directors (as hereinafter defined). Additionally, approval of a
majority of the Continuing Directors is necessary for redemption of the Rights
after the Stock Acquisition Date. A "Continuing Director" is defined as any
member of the Board who was a member of the Board immediately prior to the date
of the Rights Plan, and who is not an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any member of the Board who becomes a
member of the Board subsequent to the date of the Rights Plan and who is not an
Acquiring Person, or an affiliate or associate of an Acquiring Person, if such
person is recommended, nominated or approved for election on the Board by a
majority of the Continuing Directors then on the Board.
The redemption of the Rights may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole discretion
may establish. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The issuance of the Rights is not taxable to the Company or to shareholders
under presently existing federal income tax law, and will not change the way in
which shareholders can presently trade the Company's shares of Common Stock. If
the Rights should become exercisable, shareholders, depending on then existing
circumstances, may recognize taxable income.
Prior to the Stock Acquisition Date, the Rights Agreement generally may be
amended by the Company without the consent of the holders of the Rights or the
Common Stock. On or after the Stock Acquisition Date, the Company may amend the
Rights Agreement only to (i) cure any ambiguity, (ii) correct or supplement any
provision which may be defective or inconsistent with the other provisions of
the Rights Agreement, or (iii) change or supplement the Rights Agreement in any
other manner which the Company may deem necessary or desirable, provided that no
amendment shall adversely affect the interests of the holders of Rights (other
than any interest of an Acquiring Person or an affiliate or associate of an
Acquiring Person). In addition, the Rights Plan may be amended only with the
approval of a majority of the Continuing Directors after a person has become
C-4
an Acquiring Person or within one year after the date of a change in a majority
of the Company's Board as a result of certain hostile proxy or consent
solicitations.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. Accordingly, the
existence of the Rights may deter certain acquirors from making takeover
proposals or tender offers. However, the Rights Agreement helps ensure that the
Company's shareholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The Rights should not interfere with any
merger or other business combination approved by the Board of Directors because
the Rights may be redeemed by the Company at the Redemption Price prior to the
time that a person or group has acquired beneficial ownership of 15% or more of
the outstanding Common Stock. The adoption of the Rights Agreement is not in
response to any specific takeover threat or proposal, but is a precaution taken
to protect the rights of the Company's shareholders.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form 8-A with respect to the Rights filed with the Securities and Exchange
Commission (Commission File No. 011-13254). A copy of the Rights Agreement is
available free of charge from the Company, 0000 Xxxx Xxxxx, Xxxxxxxx, Xxxxxxx
00000; Attention: Vice President -- Investor Relations. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is incorporated in this summary
description by reference.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed herein may constitute Forward-looking Statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Act of 1934, as amended, each as amended by the
Private Securities Litigation Reform Act of 1995, 15 U.S.C.A. Sections 77z-2 and
78u-5 (Supp. 1996). Those statements include statements regarding the intent,
belief or current expectations of the Company and members of its management team
as well as the assumptions on which such statements are based. Any such Forward-
looking Statements are not guarantees of future performance and the Company's
actual results could differ materially from those set forth in such Forward-
looking Statements. Factors currently known to management that could cause
actual results to differ materially from those set forth in such Forward-looking
Statements include risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission, including Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and Annual Reports on Form 10-K. The Company
undertakes no obligation to update or revise Forward-looking Statements to
reflect changed assumptions, the occurrence of unanticipated events or changes
to future operating results over time.
C-5
