EXHIBIT 4.1
FIRST MID-ILLINOIS BANCSHARES, INC.
AND
COMPUTERSHARE TRUST COMPANY, N.A.,
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 22, 2009
TABLE OF CONTENTS
PAGE
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Section 1. CERTAIN DEFINITIONS................................. 1
Section 2. APPOINTMENT OF RIGHTS AGENT......................... 6
Section 3. ISSUANCE OF RIGHTS CERTIFICATES..................... 6
Section 4. FORM OF RIGHTS CERTIFICATES......................... 8
Section 5. COUNTERSIGNATURE AND REGISTRATION................... 9
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE
OF RIGHTS CERTIFICATES; MUTILATED, DESTROYED,
LOST OR STOLEN RIGHTS CERTIFICATES.................. 9
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS...................................... 10
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES........................................ 12
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK....... 12
Section 10. COMMON STOCK RECORD DATE............................ 14
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND
OF SHARES OR NUMBER OF RIGHTS....................... 14
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES.................................... 21
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER............................. 21
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES............. 23
Section 15. RIGHTS OF ACTION.................................... 25
Section 16. AGREEMENT OF RIGHTS HOLDERS......................... 25
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER......................................... 26
Section 18. CONCERNING THE RIGHTS AGENT......................... 26
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT........................................ 26
Section 20. DUTIES OF RIGHTS AGENT.............................. 27
Section 21. CHANGE OF RIGHTS AGENT.............................. 29
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES................. 30
Section 23. REDEMPTION AND TERMINATION.......................... 30
Section 24. EXCHANGE............................................ 32
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TABLE OF CONTENTS
(continued)
PAGE
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Section 25. NOTICE OF CERTAIN EVENTS............................ 33
Section 26. NOTICES............................................. 33
Section 27. SUPPLEMENTS AND AMENDMENTS.......................... 34
Section 28. SUCCESSORS.......................................... 35
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC...................................... 35
Section 30. BENEFITS OF THIS AGREEMENT.......................... 35
Section 31. SEVERABILITY........................................ 35
Section 32. GOVERNING LAW....................................... 36
Section 33. COUNTERPARTS........................................ 36
Section 34. DESCRIPTIVE HEADINGS................................ 36
Section 35. FORCE MAJEURE....................................... 36
EXHIBITS
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Exhibit A - Form of Rights Certificates
Exhibit B - Form of Summary of Rights
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of September 22, 2009 (the "Agreement"),
between First Mid-Illinois Bancshares, Inc., a Delaware corporation
(the "Company"), and Computershare Trust Company, N.A., a national
banking association (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on September 22, 2009 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company (the "Board") authorized
and declared a dividend distribution of one Right (as hereinafter
defined) for each share of common stock, par value $4.00 per share
(the "Common Stock"), of the Company outstanding at the close of
business on October 16, 2009 (the "Record Date"), and authorized the
issuance of one Right (as such number may hereafter be adjusted
pursuant to the provisions of Section 11(i) or Section 11(p) hereof)
for each share of Common Stock issued between the Record Date (whether
originally issued or delivered from the Company's treasury) and the
Distribution Date (as hereinafter defined), each Right initially
representing the right to purchase one share of Common Stock, upon the
terms and subject to the conditions hereinafter set forth (the
"Rights").
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 following terms have the meanings indicated:
(a) "Acquiring Person" shall mean (x) 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 shares of Common
Stock then outstanding, but shall not include (i) the Company; (ii)
any Subsidiary of the Company; (iii) any employee benefit plan of the
Company, or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to
the terms of any such plan; (iv) any Person who becomes the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding
(or, in the case of a Person described in subclauses (A) through (H)
of the following clause (vi), 40.1% or more of the shares of Common
Stock then outstanding) as a result of a reduction in the number of
shares of Common Stock outstanding due to the repurchase of shares of
Common Stock by the Company other than during the Special Period (as
defined in Section 23(c) hereof) or at a time when the rights are not
redeemable, unless and until such Person, after becoming aware that
such Person has become the Beneficial Owner of 15% or more of the then
outstanding shares of Common Stock (or, in the case of a Person
described in subclauses (A) through (H) of the following clause (vi),
40.1% or more of the then outstanding shares of Common Stock),
acquires beneficial ownership of additional shares of Common Stock
constituting one percent (1%) or more of the shares of Common Stock
then outstanding; (v) any such Person who has reported or is required
to report such ownership (but less than 20%) on Schedule 13G under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
in effect on the date of this Agreement (or any comparable or
successor report) or on Schedule 13D under the Exchange Act (or any
comparable or successor report) which Schedule 13D does not state any
intention to or reserve the right to control or influence the
management or policies of the Company or engage in
any of the actions specified in Item 4 of such schedule (other than
the disposition of the Common Stock) and, within ten Business Days of
being requested by the Company to advise it regarding the same,
certifies to the Company that such Person acquired shares of Common
Stock in excess of 14.9% inadvertently or without knowledge of the
terms of the Rights and who or which, together with all Affiliates and
Associates, thereafter does not acquire additional shares of Common
Stock while the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding; provided, however, that if the Person
requested to so certify fails to do so within ten Business Days, then
such Person shall become an Acquiring Person immediately after such
ten-Business-Day period; or (vi) any of the Persons described in the
following subclauses (A) through (H) (or any group comprised solely of
such Persons) who or which would be an Acquiring Person but for this
proviso if but only if all securities of the Company beneficially
owned by all such Persons in the aggregate shall constitute less than
40.1% of the then outstanding shares of Common Stock: (A) Xxxxxxxx
Xxxxxxx Xxxx, any descendant of Xxxxxxxx Xxxxxxx Keon (including
descendants by adoption and their descendants), or any spouse, former
spouse or surviving spouse of Xxxxxxxx Xxxxxxx Xxxx or any such
descendants; (B) Xxxx Xxxxxxx Sparks, any descendant of Xxxx Xxxxxxx
Xxxxxx (including descendants by adoption and their descendants), or
any spouse, former spouse or surviving spouse of Xxxx Xxxxxxx Sparks
or any such descendants; (C) Xxxxxxx Xxxxxxx Xxxxxxx, any descendant
of Xxxxxxx Xxxxxxx Xxxxxxx (including descendants by adoption and
their descendants), or any spouse, former spouse or surviving spouse
of Xxxxxxx Xxxxxxx Xxxxxxx or any such descendants (such Persons
together with the Persons described in clauses (A) and (B) being
collectively referred to as the "Family Members"); (D) any trust which
is in existence on the date of this Agreement and which has been
established by one or more Family Members, or one or more of their
respective ancestors, and any estate of a Family Member who died on or
before the date of this Agreement (collectively defined as the "Family
Entities"); (E) any estate of a Family Member who dies after the date
hereof, or any trust established after the date hereof by one or more
Family Members or Family Entities, provided that one or more Family
Members, Family Entities or charitable organizations which qualify as
exempt organizations under Section 501(c) of the Internal Revenue Code
of 1986, as amended ("Charitable Organizations"), collectively, are
the beneficiaries of at least 50% of the actuarially-determined
beneficial interests in such estate or trust; (F) any Charitable
Organization which is established by one or more Family Members, or
one or more of any of their respective ancestors, or Family Entities
(a "Family Charitable Organization"); (G) any corporation or limited
liability company of which a majority of the voting power is held,
directly or indirectly, by or for the benefit of one or more Family
Members, Family Entities, estates or trusts described in clause (E)
above, or Family Charitable Organizations; and (H) any partnership or
other entity or arrangement of which a majority of the voting interest
is held, directly or indirectly, by or for the benefit of one or more
Family Members, Family Entities, estates or trusts described in clause
(D) or (E) above or Family Charitable Organizations; or (y) any Person
who or which has entered into any agreement or arrangement with the
Company or any Subsidiary of the Company providing for an Acquisition
Transaction (as defined in Section 1(b) hereof).
(b) "Acquisition Transaction" shall mean (x) a merger,
consolidation or similar transaction involving the Company or any of
its Subsidiaries as a result of which stockholders of the Company will
own less than 60% of the outstanding shares of Common Stock of the
Company or a publicly traded entity which controls the Company or, if
appropriate, the entity into which the Company may be merged,
consolidated or otherwise combined (based
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solely on the shares of Common Stock received or retained by such
stockholders, in their capacity as stockholders of the Company,
pursuant to such transaction), (y) a purchase or other acquisition of
all or a substantial portion of the assets of the Company and its
Subsidiaries, or (z) a purchase or other acquisition of securities
representing 15% or more of the shares of Common Stock then
outstanding.
(c) "Act" shall mean the Securities Act of 1933, as
amended.
(d) "Affected Transaction" shall have the meaning set forth
in Section 23(c)(i)(B)(x) hereof.
(e) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(f) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities: (i) which
such Person or any of such Person's Affiliates or Associates, directly
or indirectly, owns or has 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, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) 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 until such tendered securities are
accepted for purchase or exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a Triggering
Event (as hereinafter defined), or (C) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering Event
which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date (as
hereinafter defined) or pursuant to Section 3(a) or Section 22 hereof
(the "Original Rights") or pursuant to Section 11(i) or Section 11(p)
hereof in connection with an adjustment made with respect to any
Original Rights; (ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), including 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 security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding (whether or not
in writing) to vote such security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy or consent
given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is not
also then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or (iii) which are
beneficially owned, directly or indirectly, by any other Person (or
any Affiliate or Associate thereof) 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, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph (f))
or disposing of any voting securities of the Company; provided,
however, that nothing in this paragraph (f) shall cause a Person
engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to
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"beneficially own," any securities acquired or which such Person has
the right to acquire 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.
(g) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
Commonwealth of Massachusetts are authorized or obligated by law or
executive order to close.
(h) "Close of business" on any given date shall mean 5:00
P.M., Eastern time, on such date; provided, however, that if such date
is not a Business Day, it shall mean 5:00 P.M., Eastern time, on the
next succeeding Business Day.
(i) "Common Stock" shall mean the common stock, par value
$4.00 per share, of the Company, except that "Common Stock" when used
with reference to any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control or
direct the management, of such Person.
(j) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a) (iii) hereof.
(k) "Current Market Price" shall have the meaning set forth
in Section 11(d) hereof.
(l) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(m) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(n) "Equivalent Common Stock" shall have the meaning set
forth in Section 11(b) hereof.
(o) "Exchange Act" shall have the meaning set forth in
Section 1(a) hereof.
(p) "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof.
(q) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(r) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(s) "Interest" shall have the meaning set forth in Section
23(c)(i)(B)(x) hereof.
(t) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, limited liability partnership,
trust, syndicate or other entity and includes,
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without limitation, an unincorporated group of persons who, by formal
or informal agreement or arrangement (whether or not in writing), have
embarked on a common purpose or act.
(u) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(v) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(w) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(x) "Rights" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(y) "Rights Agent" shall have the meaning set forth in the
parties clause at the beginning of this Agreement.
(z) "Rights Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(aa) "Rights Dividend Declaration Date" shall have the
meaning set forth in the WHEREAS clause at the beginning of this
Agreement.
(bb) "Section 11 (a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(cc) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(dd) "Special Period" shall have the meaning set forth in
Section 23(c) hereof.
(ee) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ff) "Stock Acquisition Date" shall mean the earlier of (i)
the first date of public announcement by the Company that an Acquiring
Person has become such pursuant to clause (x) of the definition of
Acquiring Person, and (ii) the date that an Acquiring Person has
become such pursuant to clause (y) of the definition of Acquiring
Person.
(gg) "Subsidiary" shall mean, with reference to any Person,
any corporation or other entity of which an amount of voting
securities (or other ownership interests having ordinary voting power)
sufficient to elect at least a majority of the directors (or other
persons performing similar functions) of such corporation or other
entity is directly or indirectly beneficially owned or otherwise
controlled by such Person.
(hh) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ii) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
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(jj) "Transaction" shall have the meaning set forth in
Section 23(c)(i)(B)(x) hereof.
(kk) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
(ll) "Value Enhancement Procedures" shall mean (i) the
selection by the Board of an independent financial advisor (the
"Independent Advisor") from among financial advisors which have
established expertise in advising on mergers, acquisitions and related
matters and have no Interest relating to an Affected Transaction, and
have not during the preceding year provided services to, been engaged
by or been a financing source for any other party to an Affected
Transaction or any Affiliate of any such party or of any director
(other than the Company and its Subsidiaries); (ii) whether or not
there is a then-pending Affected Transaction, the receipt by the Board
from its Independent Advisor of (A) such advisor's view (expressed in
such form and subject to such qualifications and limitations as the
Independent Advisor deems appropriate) regarding whether redemption of
the Rights will serve the best interests of the Company and its
stockholders or (B) such advisor's statement that it is unable to
express such a view, setting forth the reasons therefor; and (iii) if
there is a then-pending Affected Transaction, (A) the establishment
and implementation by the Board, with the advice of its Independent
Advisor, of a process and procedures which the Board and such advisor
conclude would be most likely to result in the best value reasonably
available to stockholders (regardless of whether such Affected
Transaction involves a "sale of control" or "break-up" of the Company
for Delaware law purposes), (B) the Board (x) receiving the opinion of
its Independent Advisor, in customary form and content for
transactions of the type involved, that the Affected Transaction is
fair to the Company's stockholders from a financial point of view and
determining, and the Independent Advisor confirming, that it has no
reason to believe that a superior transaction is reasonably available
for the benefit of the Company's stockholders, and (C) the execution
of a definitive transaction agreement and other definitive
documentation necessary to effect the Affected Transaction.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, 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,
upon ten (10) days prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and shall in no event be
liable for, the acts or omissions of any such co-Rights Agent.
Section 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on the
twentieth day after the Stock Acquisition Date (or, if the twentieth
day after the Stock Acquisition Date occurs before the Record Date,
the close of business on the Record Date), or (ii) the close of
business on the twentieth day (or such specified or unspecified later
date as the Board shall determine, provided, however, that no deferral
of a Distribution Date by the Board pursuant to this clause (ii) may
be made at any time during the Special Period) after the date that a
tender or exchange offer by any Person (other than 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
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or established by the Company for or pursuant to the terms of any such
plan) is first published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the Exchange Act,
if upon consummation thereof, such Person would be the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding
(the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraphs (b) and (c) of this Section 3) by the
certificates for the Common Stock registered in the names of the
holders thereof (which certificates for Common Stock shall be deemed
also to be certificates for Rights) and not by separate certificates,
and (y) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a
transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send at the expense of the
Company and by first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records
of the Company, one or more right certificates, substantially in the
form of EXHIBIT A hereto (the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held, subject to adjustment as
provided herein. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section
11(i) or Section 11(p) hereof, at the time of distribution of the
Rights Certificates, the Company shall not be required to issue Rights
Certificates evidencing fractional rights, but may, in lieu thereof,
make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu
of any fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
(b) As soon as practicable after the Record Date, the
Company will send a copy of a Summary of Rights, substantially in the
form attached as EXHIBIT B (the "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
then shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date,
as set forth in paragraph (a) above, until the earlier of the
Distribution Date or the Expiration Date, the Rights will be evidenced
by such certificates for the Common Stock with or without a copy of
the Summary of Rights attached, and the registered holders of the
Common Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration
Date, the transfer of any certificates representing shares of Common
Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares of
Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date, and to the extent
provided in Section 22 hereof, in respect of shares of Common Stock
issued after the Distribution Date and prior to the Expiration Date.
Certificates representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall, as promptly as
practicable following the Record Date, bear the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN FIRST
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MID-ILLINOIS BANCSHARES, INC. (THE "COMPANY") AND THE RIGHTS AGENT
THEREUNDER, DATED AS OF SEPTEMBER 22, 2009, AS THE SAME MAY BE
AMENDED, RESTATED, RENEWED OR EXTENDED FROM TIME TO TIME (THE "RIGHTS
AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY
REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF
THE COMPANY. 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. THE COMPANY WILL
MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT,
AS IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE, PROMPTLY AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES
SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR BENEFICIALLY
OWNED BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH
PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID. With
respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date,
the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and
registered holders of Common Stock shall also be the registered
holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall
each be substantially in the form attached hereto as EXHIBIT A 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 applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of Common
Stock as shall be set forth therein at the price set forth therein
(such exercise price per share, as adjusted from time to time
hereunder, 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
herein.
(b) Any Rights Certificate issued pursuant to Section 3(a),
Section 11(i) or Section 22 hereof that represents Rights beneficially
owned by: (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming
such and receives such
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Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or
understanding (whether or not in writing) regarding the transferred
Rights or (B) a transfer which the Board, in its sole discretion, has
determined is part of a plan, arrangement or understanding which has
as a primary purpose or effect avoidance of the provisions of Section
7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(E) OF THE RIGHTS
AGREEMENT.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and attested by
the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
countersigned by an authorized signatory of the Rights Agent, either
manually or by facsimile signature, and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company
who shall have signed any of the Rights Certificates shall cease to be
such officer of the Company before countersignature by an authorized
signatory of the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned
by an authorized signatory of the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights 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 or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the
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close of business on the Expiration Date, any Rights Certificate or
Certificates (other than Rights Certificates representing Rights that
may have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to
purchase a like number of shares of Common Stock (or, following the
occurrence of a Triggering Event, other securities, cash or other
assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of
a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates
shall make such request in writing delivered to the Rights Agent, and
shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged, with the forms of
assignment and certificate contained therein duly executed, at the
principal office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall
have 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. Thereupon
the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
14 hereof and Section 24 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment from
the holder of a Rights Certificate 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 Rights 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 Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and 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 Rights
Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder
of any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without limitation,
the restrictions on exercisability set forth in Section 9 (c), Section
11(a)(iii) and Section 23(a) hereof) in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate,
with the form of election to purchase and the certificate contained
therein duly executed, to the Rights Agent at the principal office or
offices of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total
number of shares of Common Stock (or, following the occurrence of a
Triggering Event, other securities, cash or other assets, as the case
may be) as to which such surrendered Rights are then exercisable, at
or prior to the earliest of (i) 5:00 P.M., Mattoon, Illinois time, on
September 22, 2019 (such date, the "Final Expiration Date"), or (ii)
the time at
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which all of the Rights are redeemed or exchanged as provided in
Section 23 or Section 24 hereof, respectively (the earliest of (i) and
(ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $75.00, and
shall be subject to adjustment from time to time as provided in
Section 11 and Section 13(a) hereof and shall be payable in accordance
with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price (as such amount may be
reduced pursuant to Section 11(a)(iii) hereof) per share of Common
Stock (or other securities, cash or other assets, as the case may be)
to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) (A) requisition from any transfer
agent of the shares of Common Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for the
total number of shares of Common Stock to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Common 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 Common Stock as are to be purchased (in which case
certificates for the shares of Common 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) requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in accordance
with Section 14 hereof, (iii) 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 Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv)
after receipt thereof, deliver such cash, if any, to or upon the order
of the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. In the event that the
Company is obligated to issue other securities of the Company, pay
cash and/or distribute other property pursuant to Section 11(a)
hereof, 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 Common Stock would be
issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, (ii) a transferee of an
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Acquiring Person (or of any such Affiliate or Associate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Affiliate or
Associate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in
writing) regarding the transferred Rights or (B) a transfer which the
Board has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section
7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or any other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(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 of a
Rights Certificate upon the occurrence of any purported assignment or
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 assignment or election to purchase set forth on the reverse
side of the Rights Certificate surrendered for such assignment or
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 RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split-up, combination or exchange shall, if surrendered to
the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be canceled by it, and no Rights 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 other Rights Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
shares of Common Stock (or, following the occurrence of a Triggering
Event, out of its authorized and issued shares held in its treasury),
the number of shares of Common Stock that, as provided in this
Agreement including Section 11(a)(iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock (or, following
the occurrence of a Triggering Event, other securities, as the case
may be) issuable and deliverable upon the exercise of the Rights may
be listed on any national securities exchange, the Company shall use
all reasonable efforts to cause, from and after such time as the
Rights become exercisable, all shares
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reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its reasonable best efforts to
(i) file, as soon as practicable following the earliest date after the
first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11 (a)(iii)
hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement on an appropriate
form under the Act, with respect to the Common Stock or other
securities purchasable upon exercise of the Rights, (ii) cause such
registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which
the Rights are no longer exercisable for such securities, and (B) the
date of the expiration of the Rights. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the
date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file
such registration statement 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. In addition, if the Company shall
determine that a registration statement is required in other
circumstances following the Distribution Date, the Company similarly
may temporarily suspend the exercisability of the Rights until such
time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, or
the exercise thereof shall not be permitted under applicable law, or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Common
Stock (or, following the occurrence of a Triggering Event, other
securities, as the case may be) delivered upon exercise of Rights
shall at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) 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 Rights Certificates and of any certificates for a
number of shares of 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 Rights Certificates to a Person other
than, or the issuance or delivery of a number of shares of Common
Stock (or other securities, as the case may be) in a name other than
that of the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise or to issue or deliver any
certificates for a number of shares of Common Stock (or other
securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall
have been paid (any such tax being payable
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by the holder of such Rights 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. COMMON STOCK RECORD DATE. Each person in whose name
any certificate for a number of 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 such shares of Common Stock (or other securities, as the case may
be) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the 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 (fractional or otherwise) on, and such certificate
shall be dated, the next succeeding Business Day on which the Common
Stock (or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate, as such, shall not be
entitled to any rights of a stockholder of the Company with respect to
shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind
of shares, or fractions thereof, purchasable upon exercise of each
Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on
the Common Stock payable in shares of Common Stock, (B)
subdivide or split the outstanding Common Stock, (C) combine
or consolidate the outstanding Common Stock into a smaller
number of shares, or (D) issue any shares of its capital
stock in a reclassification of the Common 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 this
Section 11(a) and Section 7(e) hereof, the Purchase Price in
effect at the time of the record date for such dividend or
of the effective date of such subdivision, split,
combination, consolidation or reclassification, and the
number and kind of shares of Common Stock (or other 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 Common Stock or capital stock,
as the case may be, which, if such Right had been exercised
immediately prior to such date (whether or not such Right
was then exercisable) and at a time when the transfer books
for the Common Stock (or other capital stock, as the case
may be) of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, split, combination,
consolidation or reclassification. If an event occurs which
would require an adjustment under both this Section
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11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event any Person shall, at any time
after the Rights Dividend Declaration Date, become an
Acquiring Person, unless the event causing such Person to
become an Acquiring Person is a transaction set forth in
Section 13(a) hereof, then, promptly following the
occurrence of such event, proper provision shall be made so
that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, 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 shares of
Common Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event
(whether or not such Right was then issued or exercisable),
and (y) dividing that product (which, following such first
occurrence, shall thereafter 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
pursuant to Section 11(d) hereof) per share of Common Stock
on the date of such first occurrence (such number of shares,
the "Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's Restated
Certificate of Incorporation, as amended (the "Restated
Certificated of Incorporation"), but which are 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 the
foregoing subparagraph (ii) of this Section 11(a), the
Company, acting by resolution of the Board, 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) hereof), make
adequate provision to substitute for the Adjustment Shares,
upon the exercise of such Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares or
units of shares of preferred stock or other securities which
the Board has deemed to have essentially the same value or
economic rights as shares of Common Stock (such shares being
referred to as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has
been determined by the Board based upon the advice of a
nationally recognized investment banking firm selected by
the Board; provided, however, that if the Company shall not
have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later
of (x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company's right of redemption
pursuant to Section 23(a) hereof expires (the later of (x)
and (y) being referred to herein as 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
- 15 -
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 Spread. For purposes of the
preceding sentence, the term "Spread" shall mean the excess
of (i) the Current Value over (ii) the Purchase Price. If
the Board determines 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 thirty (30) day period set forth above may be extended
to the extent necessary, but not more than ninety (90) days
after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization
of such additional shares (such thirty (30) day period, as
it may be extended, is herein called the "Substitution
Period"). To the extent that action is to be taken pursuant
to the first and/or third sentences of this Section
11(a)(iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek such stockholder
approval for such 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
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 each Adjustment Share shall
be the Current Market Price (as defined in Section 11(d)
hereof) 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. Notwithstanding the foregoing provisions of this
subparagraph (iii), in the event that, pursuant to this
subparagraph (iii), upon the exercise of the Rights the
Company shall be required to deliver value in any form other
than shares of Common Stock, such value shall be delivered
only to the extent and at the time that, if required, the
approval by appropriate financial regulatory authorities
with supervisory jurisdiction over the Company or its
financial institution Subsidiaries of such delivery of such
value shall have been obtained.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock
entitling them to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record date) Common
Stock (or shares having the same rights, privileges and preferences as
the shares of Common Stock ("Equivalent Common Stock")) or securities
convertible into Common Stock or Equivalent Common Stock at a price
per share of Common Stock or per share of Equivalent Common Stock (or
having a conversion price per share, if a security convertible into
Common Stock or Equivalent Common Stock) less than the Current Market
Price (as determined pursuant to Section 11(d) hereof) per share of
Common 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 Common Stock
outstanding on such record date, plus the number of shares of Common
Stock which the aggregate subscription or offering price of the total
number of shares of Common Stock and/or Equivalent Common Stock so to
be offered (and/or the aggregate
- 16 -
initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the
denominator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of additional shares
of Common Stock and/or Equivalent Common 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, 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 Common 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 in the event that 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) In case the Company shall fix a record date for a
distribution to all holders of Common 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 periodic cash dividend out of
the earnings or retained earnings of the Company), assets (other than
a dividend payable in Common Stock, but including any dividend payable
in stock other than Common Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), 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 (as determined pursuant to Section 11(d) hereof) per
share of Common Stock on such record date, less the fair market value
(as determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes) 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 Common Stock, and the
denominator of which shall be such Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Common Stock. Such
adjustments shall be made successively whenever such a record date is
fixed, and in the event that 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) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, 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 such
Common Stock for those days during the thirty (30) consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such
date on which a trade occurred, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, 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 such Common Stock for those days
during the ten (10) consecutive Trading Days immediately following
such date on which a trade occurred; provided, however, that in the
event that 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 (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible
into shares of such Common Stock (other than the Rights), or (B) any
subdivision,
- 17 -
combination, consolidation, reverse stock split or reclassification of
such Common Stock, and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination,
consolidation, reverse stock split or reclassification shall not have
occurred prior to the commencement of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, as set forth above, then,
and in each such case, the Current Market Price shall be properly
adjusted to take into account ex-dividend trading. 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 New York Stock Exchange or, if
the shares of Common Stock are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system or as quoted by the Nasdaq National
Market with respect to securities listed or admitted to trading on
another national securities exchange or quoted by the Nasdaq National
Market, respectively, or if the shares of Common Stock are not listed
or admitted to trading on any national securities exchange or quoted
by the Nasdaq National Market, the last quoted 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 Nasdaq Stock Market or such
other quotation 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. If on any such date the Common Stock is not publicly held and
is not so listed, admitted to trading or quoted, and no market maker
is making a market in the Common Stock, Current Market Price shall
mean the fair value of such shares on such date as determined in good
faith by the Board, which determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes. The term "Trading Day" shall mean a day on which the
principal national securities exchange 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, a Business Day.
(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 in the Purchase Price
of at least one percent (1%); provided, however, that any adjustments
which by reason 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 share, 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 (3)
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) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock other than Common Stock, thereafter the number of such
other shares so receivable upon exercise of any Right and the Purchase
Price thereof (or the number of Rights) 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 Common Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k)
and (m) hereof, and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Common Stock shall apply on like terms to
any such other shares.
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(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
shares of Common 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) hereof, upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c)
hereof, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of shares of Common Stock
(calculated to the nearest ten-thousandth) 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 to adjust the number of Rights, in
lieu of any adjustment in the number of shares of Common 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 shares of Common Stock for which a 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 one-ten-
thousandth of a Right) 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 Rights Certificates
have been issued, shall be at least ten (10) days later than the date
of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record
date Rights Certificates evidencing, subject to Section 14 hereof, 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 Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Rights
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 Rights
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 shares of Common Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredths of a
share which were expressed in the initial Rights Certificates issued
hereunder.
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(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of
the number of shares of Common Stock issuable upon exercise of the
Rights, the Company shall use all reasonable efforts to take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue,
fully paid and nonassessable, such number of shares of Common Stock at
such adjusted Purchase Price.
(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 shares of Common
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of shares of
Common 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
adjustments 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 shall determine to be advisable in
order that any (i) consolidation or subdivision of the Common Stock,
(ii) issuance wholly for cash of any shares of Common Stock at less
than the Current Market Price, (iii) issuance wholly for cash of
shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common 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 Common Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one transaction, or a
series of related transactions, assets or earning power aggregating
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 (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger, sale
or transfer 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, sale or transfer, the
stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates.
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(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 27 hereof, 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.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution
Date (i) declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine or consolidate the
outstanding shares of Common Stock into a smaller number of shares,
the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the
Distribution Date (or issued or delivered on or after the Distribution
Date pursuant to Section 22), shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of
Common Stock following any such event shall equal the result obtained
by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of such event.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 and
Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment, (b) promptly file with the
Rights Agent, and with each transfer agent for the Common Stock, a
copy of such certificate, and (c) if a Distribution Date has occurred,
mail or cause the Rights Agent to mail a brief summary thereof to each
holder of a Rights Certificate in accordance with Section 26 hereof.
Failure to promptly prepare or file such certificate, or to mail a
brief summary thereof, shall not affect the legality or validity of
any adjustment made pursuant to Section 11 or Section 13 hereof. The
Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be
obligated or responsible for calculating any adjustments nor shall it
be deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER.
(a) In the event that, 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) hereof), and the Company shall not be the continuing or
surviving 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) hereof) shall consolidate with, or
merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger,
or (z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction
or a series of related transactions,
- 21 -
assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole
and calculated on the basis of the Company's most recent regularly
prepared financial statements) to any Person or Persons (other than
the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof), then,
and in each such case, proper provision shall be made so that: (i)
each holder of a Right, except as provided in Section 7(e) hereof,
shall, from and after the later of (A) the date of the first
occurrence of any such Section 13 Event or (B) the date of the
expiration of the period within which the Rights may be redeemed
pursuant to Section 23 hereof (as the same may be amended), have the
right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, nonassessable and
freely tradeable shares of Common Stock of the Principal Party (as
such term is hereinafter defined), not subject to any 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 shares of Common Stock for
which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the
number of such shares for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first occurrence),
and (2) dividing that product (which, 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 pursuant to Section 11(d) hereof) per
share of the Common Stock of such Principal Party on the date of
consummation of such 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" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal
Party following the first occurrence of a Section 13 Event; (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 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; and (v) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the first occurrence of any Section 13 Event.
(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), the
Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted, changed
or exchanged in such merger or consolidation, or if no
securities are so issued, the Person that is the other party
to such merger or consolidation, or if the other party to
the merger does not survive the merger, the Person that does
survive the merger (including the Company, if it survives);
and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13 (a), the Person that
is the party receiving the greatest
- 22 -
portion of the assets or earning power transferred pursuant
to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of
such Person is not at such time and has not been continuously over the
preceding twelve (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, "Principal Party" shall refer to such other Person; and
(2) if the Common Stock of such Person is not and has not been so
registered and such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of which are
and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value.
(c) The Company shall not consummate any such Section 13
Event 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 such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement confirming that the requirements
of Section 13(a) and Section 13(b) hereof shall promptly be performed
in accordance with their terms and further providing that, as soon as
practicable after the date of any such Section 13 Event, the Principal
Party will
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Act) until the Expiration Date; and
(ii) take all such other action as may be necessary to
enable the Principal Party to issue the securities
purchasable upon exercise of the Rights, including but not
limited to the registration or qualification of such
securities under all requisite securities laws of
jurisdictions of the various states and the listing of such
securities on such exchanges and trading markets as may be
necessary or appropriate; and
(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.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
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(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section
11(i) and Section 11(p) hereof, or to distribute Rights Certificates
which evidence fractional Rights. In lieu of any such fractional
Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For purposes of this
Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to
the date on which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any Trading 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 New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system
or the Nasdaq National Market with respect to securities listed on
another national securities exchange or quoted by the Nasdaq National
Market, respectively, or if the Rights are not listed or admitted to
trading on any national securities exchange or quoted by the Nasdaq
National Market, the last quoted 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 Nasdaq Stock Market or such other quotation
system then in use or, if on any such date the Rights 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 Rights, selected by the Board. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights
on such date as determined in good faith by the Board shall be used.
(b) 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 Rights 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 whole share of Common
Stock. For purposes of this Section 14(b), the current market value of
one share of Common Stock shall be the closing price of the Common
Stock on the most recent Trading Day during which a trade occurred
prior to the date of the exercise or, if unavailable, the appropriate
alternative price ( in each case, as determined pursuant to Section
11(d) hereof) for the Trading Day immediately prior to the date of
such exercise.
(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 Rights 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 (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock
shall be the closing price of one share of Common Stock, or if
unavailable, the appropriate alternative price (in each case, as
determined pursuant to Section 11(d) hereof) for the Trading Day
immediately prior to the date of such exercise. The holder of a Right
by the acceptance of that Right expressly waives such holder's right
to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
- 24 -
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, other than rights of action vested in the Rights
Agent pursuant to Section 18 hereof, are vested in the respective
registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and
any registered holder of any Rights 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 Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), may, in such
holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, such holder's
right to exercise the Rights evidenced by such Rights Certificate in
the manner provided in such Rights 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 shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person
subject to this Agreement.
Section 16. AGREEMENT OF RIGHTS 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 be
transferable only in connection with the transfer of shares of Common
Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
contained therein duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose
name a Rights 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 Rights Certificates or the
associated Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to 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 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 reasonable best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as
possible.
- 25 -
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the
number of shares of Common Stock or any other securities of the
Company which may at any time be issuable upon the exercise of the
Rights represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the
provisions hereof.
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, reimbursement for
its reasonable expenses and counsel fees and disbursements 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 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. The costs and expenses of enforcing this
right of indemnification shall also be paid by the Company. The
indemnification provided for hereunder shall survive the expiration of
the Rights and termination of this Agreement. The Rights Agent may
conclusively rely upon and shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted
by it in good faith in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate for
Common Stock or for other securities of the Company, or any instrument
of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other
paper or document reasonably believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
(b) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
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, stock transfer or other shareholder
- 26 -
services 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, but only if such corporation would
be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. If at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of
the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have the full
force provided in the Rights 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 Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates
so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights 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, and no implied duties or obligations
shall be read into this Agreement against the Rights Agent, by all of
which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting,
the Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), 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 (including, without limitation, the identity of any
Acquiring Person and the determination of Current Market Price) 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 the
Chairman of the Board, the Vice Chairman, the President, any Vice
President, the Treasurer and Assistant Treasurer, 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.
- 27 -
(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 Rights Certificates, nor shall it be required to
verify the same (except as to its countersignature on such Rights
Certificates), 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 hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Rights 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 Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of
Section 11, Section 13 or Section 24 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights
Certificates after receipt of a certificate describing any such
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 to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Common Stock
will, when so 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 the Chairman of the Board, the Vice Chairman, the
President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer or any Assistant Treasurer 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. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Agreement and the date on or after which such
action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which
date shall not be less than ten Business Days after the date any
officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the
case of an omission), the Rights Agent shall have received written
instructions in response to such application subject to the proposed
action or omission and/or specifying the action to be taken or
omitted.
(h) The Rights Agent and any stockholder, 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
- 28 -
were not 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 legal entity. 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, however,
reasonable care was exercised in the selection and continued
employment thereof.
(i) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (other
than internal costs incurred by the Rights Agent in providing services
to the Company in the ordinary course of its business as Rights Agent)
or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(j) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, 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 further action with respect to such requested exercise or transfer
without first consulting with the Company.
(k) The Rights Agent shall not be required to take notice
or be deemed to have any notice of any fact, event or determination
(including, without limitation, any dates or events defined in this
Agreement or the designation of any Person as an Acquiring Person,
Affiliate or Associate) under this Agreement unless and until the
Rights Agent shall be specifically notified in writing by the Company
of such fact, event or determination.
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 thirty (30) days' notice in writing mailed
to the Company, and, in the event that the Rights Agent or any of its
affiliates is not the transfer agent of the Common Stock, to each
transfer agent of the Common Stock, by registered or certified mail,
and, if such resignation occurs after the Distribution Date, to the
registered holders of the Rights Certificates by first-class mail at
the expense of the Company. In the event the transfer agency
relationship in effect between the Company and the Rights Agent
terminates, the Rights Agent will be deemed to have resigned, and will
be discharged from its duties under this Agreement, thirty (30) days
following such termination, and the Company shall be responsible for
sending any required notice. The Company may remove the Rights Agent
or any successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock, by
registered or certified mail, and, if such removal occurs after the
Distribution Date, to the holders of the Rights 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. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of
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 Rights Certificate (who shall, with such
notice, submit his Rights Certificate for
- 29 -
inspection by the Company), then any registered holder of any Rights
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) a legal
business entity organized and doing business under the laws of the
United States or of any state of the United States, in good standing,
which is authorized under such laws to exercise corporate trust powers
and is subject to supervision or examination by a federal or state
authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000 or (b) an
Affiliate of a legal business entity described in clause (a) of this
sentence. 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 shall execute and deliver any further assurance,
conveyance, act or deed necessary for that 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, if such appointment occurs after the
Distribution Date, mail a notice thereof in writing to the registered
holders of the Rights 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 RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be approved
by the Board to reflect any adjustment or change in the Purchase Price
and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance
with the provisions of this Agreement. In addition, in connection with
the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock
so issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board, issue Rights
Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued,
and (ii) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board may, at its option, at any time prior to the
earlier of (i) the close of business on the twentieth day following
the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the close of business on the
twentieth day following the Record Date), or (ii) the Final Expiration
Date, direct the Company to, and if directed, the Company shall,
redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, as such amount may be
appropriately adjusted to
- 30 -
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"). 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) hereof, of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by
the Board.
(b) Immediately upon the action of the Board directing the
Company to make 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. Promptly
after the action of the Board directing the Company to make 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 each such holder at such 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 for 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.
(c) Notwithstanding the provisions of Section 23(a) hereof,
if there is an election of directors (whether at one or more
stockholder meetings and/or pursuant to written stockholder consent)
resulting in a majority of the Board being comprised of persons who
were not nominated by the Board in office immediately prior to such
election, and if prior to such election there was a public
announcement by a third party of an intent or proposal to engage
(without the current and continuing concurrence of the Board) in a
transaction involving an acquisition of or business combination with
the Company or otherwise to become an Acquiring Person and such
announcement or proposal had not been withdrawn or effectively
abandoned, then following the effectiveness of such election for a
period of 180 days (the "Special Period") the Rights, if otherwise
then redeemable absent the provisions of this paragraph (c), shall be
redeemable upon either of the following conditions being satisfied,
but not otherwise: (i) by a vote of a majority of the directors then
in office, provided that (A) before such vote, the Board shall have
implemented the Value Enhancement Procedures and (B) promptly after
such vote, the Company publicly announces such vote and (w) the manner
in which the Value Enhancement Procedures were implemented, (x) any
material financial, business, personal or other benefit or
relationship (an "Interest") which each director and each Affiliate of
such director (identifying each director and Affiliate separately in
relation to each such Interest) has in connection with any suggested,
proposed or pending transaction with or involving the Company (a
"Transaction"), or with any other party or Affiliate of any other
party to a Transaction, where such Transaction would or might, or is
intended to, be permitted or facilitated by redemption of the Rights
(an "Affected Transaction"), other than treatment as a stockholder on
a pro rata basis with other stockholders or pursuant to compensation
arrangements as a director or employee of the Company or a Subsidiary
which have been previously disclosed by the Company, (y) the
individual vote of each director on the motion to redeem the Rights,
and (z) the statement of any director who voted for or against the
motion to redeem the Rights and desires to have a statement
- 31 -
included in such announcement; or (ii) if clause (i) is not
applicable, by vote of a majority of the directors then in office,
provided that (A) if there is a challenge to the directors' action
approving redemption and/or any related Affected Transaction as a
breach of the fiduciary duty of care or loyalty, the directors, solely
for the purposes of determining the effectiveness of such redemption
pursuant to this clause (ii), are able to establish the entire
fairness of such redemption and, if applicable, such related Affected
Transaction, and (B) the Company shall have publicly announced the
vote of the Board approving such redemption and, if applicable, such
related Affected Transaction, which announcement shall set forth the
information prescribed by clauses (i)(B)(x), (y) and (z) above.
(d) 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 and other than in connection with the purchase or
repurchase by any of them of Common Stock prior to the Distribution
Date.
Section 24. EXCHANGE.
(a) The Board may, at its option, at any time after the
first occurrence of a Section 11(a)(ii) Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section
7(e) hereof) for Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"); provided, however, that no such exchange of the
Rights may be authorized by the Board during the Special Period or at
any time when the Rights are not redeemable. Notwithstanding the
foregoing, the Board shall not be empowered to effect such exchange at
any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Stock for or pursuant to the
terms of any such plan), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24
and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of shares of
Common Stock 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 promptly shall mail a notice of
any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner 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
Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of
Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
- 32 -
(c) In the event that the number of shares of Common Stock
which are authorized by the Company's Restated Certificate of
Incorporation but which are not outstanding or reserved for issuance
for purposes other then upon exercise of the Rights is not sufficient
to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Board shall 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 CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Common Stock or to make any other distribution
to the holders of Common Stock (other than a regular periodic cash
dividend out of earnings or retained earnings of the Company), or (ii)
to offer to the holders of Common Stock rights or warrants to
subscribe for or to purchase any additional shares of Common Stock or
shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Common Stock
(other than a reclassification involving only the subdivision or split
of outstanding shares of Common Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), 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, of 50% or more
of the assets or earning power of the Company and/or 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) hereof), or (v) to effect
the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by
the holders of the shares of Common 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 twenty (20) days prior to
the record date for determining holders of the shares of Common Stock
for purposes of such action, and in the case of any such other action,
at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of
the shares of Common Stock whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then,
in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Common
Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of
any Rights Certificate to or on the Company shall be sufficiently
given or made if sent by overnight delivery service or first-class
mail, postage
- 33 -
prepaid, addressed (until another address is filed in writing with the
Rights Agent by the Company) as follows:
First Mid-Illinois Bancshares, Inc.
0000 Xxxxxxxxxx Xxxxxx
X.X. Xxx 000 Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
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 any Rights Certificate to or on the Rights Agent shall
be sufficiently given or made if sent by overnight delivery service or
registered or certified mail and shall be deemed given upon receipt,
addressed (until another address is filed in writing by the Rights
Agent with the Company) as follows:
Computershare Trust Company, N.A.
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Client Services
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder of
any certificate representing shares of Common Stock) 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
shown on the registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS.
(a) Prior to the Distribution Date, and subject to the
provisions of Section 27(b) hereof, the Company and the Rights Agent
shall, if the Company so directs and at the expense of the Company,
supplement or amend any provision of this Agreement (including,
without limitation, any extension of the period in which the Rights
may be redeemed, any increase in the Purchase Price and any extension
of the Final Expiration Date) without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date, and subject to the provisions of Section 27(b)
hereof, the Company and the Rights Agent shall, if the Company so
directs and at the expense of the Company, supplement or amend this
Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with
any other provisions herein, (iii) to shorten or lengthen any time
period hereunder, or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Upon the delivery of
a certificate from an appropriate officer of the Company which states
that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such
supplement or amendment, provided that such supplement or amendment
does not adversely affect the rights, duties or obligations of the
Rights Agent under this Agreement. Prior to the Distribution Date,
the
- 34 -
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
(b) Notwithstanding anything herein to the contrary, no
supplement or amendment shall be made to this Agreement (i) during the
Special Period or at a time when the Rights are not redeemable, except
as contemplated by clause (i) or (ii) of Section 27(a) hereof or (ii)
that changes the rights and duties of the Rights Agent under this
Agreement without the execution of such supplement or amendment by the
Rights Agent.
Section 28. SUCCESSORS. All 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 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. 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) of the General Rules and Regulations under the
Exchange Act. The Board shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers
specifically granted to the Board 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 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 any of the directors on the
Board to any liability to the holders of the Rights.
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 Rights
Certificates (and, prior to the Distribution Date, registered holders
of 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 registered
holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. 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, void or 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; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section
23 hereof shall be reinstated and shall not
- 35 -
expire until the close of business on the fifteenth day following the
date of such determination by the Board. Without limiting the
foregoing, if any provision of this Agreement requiring that a
determination be made by, or with the concurrence of, less than the
entire Board is held by any court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such determination
shall then be made by the Board in accordance with applicable law and
the Company's Restated Certificate of Incorporation and By-laws.
Section 32. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes
shall be governed by and construed in accordance with the laws of such
State applicable to contracts made and to be performed entirely within
such State.
Section 33. 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. A signature to
this Agreement transmitted electronically shall have the same
authority, effect, and enforceability as an original signature.
Section 34. 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 hereof.
Section 35. FORCE MAJEURE. Notwithstanding anything to the
contrary contained herein, the Rights Agent shall not be liable for
any delays or failures in performance resulting from acts beyond its
reasonable control including, without limitation, acts of God,
terrorist acts, shortage of supply, breakdowns or malfunctions,
interruptions or malfunction of computer facilities, or loss of data
due to power failures or mechanical difficulties with information
storage or retrieval systems, labor difficulties, war, or civil
unrest.
[SIGNATURE PAGE FOLLOWS.]
- 36 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested as of the day and year first above
written.
FIRST MID-ILLINOIS BANCSHARES, INC.
ATTEST
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
------------------------- --------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxx
Title: President and Chief Title: Corporate Secretary
Executive Officer
COMPUTERSHARE TRUST COMPANY, N.A., AS RIGHTS AGENT
ATTEST
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxxx
--------------------------- --------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx Xxxxxxx
Title: Manager, Contract Title: Relationship Manager
Administration
- 37 -
EXHIBIT A
[FORM OF RIGHTS CERTIFICATE]
CERTIFICATE NO. R- _________ RIGHTS NOT EXERCISABLE AFTER SEPTEMBER
22, 2019, SUBJECT TO EARLIER REDEMPTION OR EXPIRATION PURSUANT TO THE
RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF ANY SUCH
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
_______________________
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
RIGHTS CERTIFICATE FIRST MID-ILLINOIS BANCSHARES, INC.
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 September 22, 2009 (as amended, restated, renewed or extended from
time to time, the "Rights Agreement"), between First Mid-Illinois
Bancshares, Inc., a Delaware corporation (the "Company"), and
Computershare Trust Company, N.A., a national banking association (the
"Rights Agent"), to purchase from the Company at any time prior to
5:00 P.M. (Mattoon, Illinois time) on September 22, 2019 at the office
or offices of the Rights Agent, or its successors as Rights Agent,
designated for such purpose, one fully paid, non-assessable share of
common stock, par value $4.00 per share, of the Company (the "Common
Stock"), at a purchase price of $75.00 per share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate duly
completed and executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of September 22, 2009,
based on the Common Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a Triggering
Event (as such term is defined in the Rights Agreement) that a number
of Rights be exercised so that only whole shares of Common Stock will
be issued. As more fully set forth in the Rights Agreement, from and
after the first occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement) , if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement), (ii) a transferee of any
such Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of such
Acquiring Person (or of any such Affiliate or Associate) who becomes a
transferee prior to or concurrently with such Acquiring Person
becoming such, such Rights shall become null and void without any
further action, and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Common Stock or other securities which
may be purchased upon the exercise of the Rights evidenced by this
Rights Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby 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 hereunder of the Rights
Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on
file at the above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent .
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of
shares of Common Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised .
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $0.01 per Right at any time prior to
the earlier of (i) the close of business on the twentieth day
following the Stock Acquisition Date, and (ii) the Final Expiration
Date. For 180 days following a change in control of the Board of
Directors of the Company that has not been approved by the Board of
Directors, which change in control occurs after an announcement (which
has not been withdrawn or abandoned) of an unsolicited third party
acquisition or business combination proposal or of a third party's
intent or proposal otherwise to become an Acquiring Person, the new
directors are entitled to redeem the rights (assuming the rights would
have otherwise been redeemable), including to facilitate an
acquisition or business combination transaction involving the Company,
but only (1) if they have followed certain prescribed procedures or
(2) if such procedures are not followed, and if their decision
regarding redemption and any acquisition or business combination is
challenged as a breach of fiduciary duty of care or loyalty, the
directors (solely for purposes of the effectiveness of the redemption
decision) are able to establish the entire fairness of the redemption
or transaction. In addition, under certain circumstances following
the Stock Acquisition Date, the Rights may be exchanged, in whole or
in part, for shares of the Common Stock, or shares of preferred stock
of the Company having essentially the same value or economic rights as
such shares. Immediately upon the action of the Board of Directors of
the Company authorizing any such exchange, and without any further
action or any notice, the Rights (other than Rights which are not
subject to such exchange) will terminate and the Rights will only
enable holders to receive the shares issuable upon such exchange.
If the Company so determines, no fractional shares of Common
Stock will be issued upon the exercise of any Right or Rights
evidenced hereby, but in lieu thereof, a cash payment will be made, as
provided in the Rights Agreement. The Company, at its election, may
require that a number of Rights be exercised so that only whole shares
of Common Stock would be issued.
No holder of this Rights Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder
of shares of Common 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
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give consent to or withhold consent from any corporate
action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company.
Dated as of _________________________,______
FIRST MID-ILLINOIS BANCSHARES, INC.
ATTEST
By: ___________________________ By: ________________________
Name: Xxxxxxx X. Xxxxxxx Name:
Title: President and Chief Title:
Executive Officer
Countersigned:
COMPUTERSHARE TRUST COMPANY, N.A.,
as Rights Agent
By:_________________________________________
Authorized Signature
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT (To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ________________________________ hereby sells,
assigns and transfers unto
________________________________________________________________
(Please print name and address of transferee)
__________________________________________________________________
this Rights Certificate, together with all right, title and interest
herein, and does hereby irrevocably constitute and appoint
__________________________________________ Attorney, to transfer the
within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________________________, ______
____________________________________
Signature
Signature Medallion Guaranteed:
_____________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that: (1) this Rights Certificate [ ] is [ ] is 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 in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: _________________, _____
_________________________________
Signature
Signature Medallion Guaranteed:
_________________________________
NOTICE
The signature(s) to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by
the Rights Certificate.)
To FIRST MID-ILLINOIS BANCSHARES, INC.:
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the shares
of Common Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other Person which may be
issuable or such other assets which may be deliverable upon the
exercise of the Rights) and requests that certificates for any such
shares or securities be issued in the name of and delivered to:
______________________________________________________________________
(Please print name and address)
Please insert social security or other identifying number:
__________________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
______________________________________________________________________
(Please print name and address)
Please insert social security or other identifying number:
__________________________
Dated: _______________________________, ______
________________________________________
Signature
Signature Medallion Guaranteed:
________________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights 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 in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or
became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: _________________, _____
______________________________________
Signature
Signature Medallion Guaranteed:
______________________________________
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of
this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever .
EXHIBIT B
FIRST MID-ILLINOIS BANCSHARES, INC.
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On September 22, 2009, the Board of Directors (the "Board") of
First Mid-Illinois Bancshares, Inc. (the "Corporation") declared a
dividend distribution of one right (each a "Right") for each
outstanding share of the common stock, par value $4.00 per share, of
the Corporation ("Common Stock") to stockholders of record at the
close of business on October 16, 2009 (the "Record Date"). Each Right
will entitle the registered holder to purchase from the Corporation
one share of Common Stock at an exercise price of $75.00, subject to
adjustment (as adjusted from time to time, the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights
Agreement, dated as of September 22, 2009 (the "Rights Agreement"),
between the Corporation and Computershare Trust Company, N.A., a
national banking association, as Rights Agent. The Corporation
previously entered into that certain Rights Agreement, dated as of
September 21, 1999, between the Corporation and Xxxxxx Trust and
Savings Bank, an Illinois corporation, as Rights Agent, which expired
by its terms at the close of business on September 21, 2009.
Initially following the Record Date, the Rights will be attached
to all certificates representing shares of Common Stock then
outstanding, and no separate Rights Certificates (as defined in the
Rights Agreement) will be distributed.
Unless previously redeemed by the Board in accordance with the
Rights Agreement, the Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earlier of (i) 20 days
following the Stock Acquisition Date (as defined below) or (ii) 20
days (or such later date as the Board shall determine, provided that
no deferral of such date may be made by the Board at any time during
the Special Period (as defined below)) after the date a tender or
exchange offer that would result in a person or group beneficially
owning 15 % or more of the outstanding shares of Common Stock is first
published, sent or given to the Corporation's stockholders. The
"Special Period" is defined as the 180-day period following the
effectiveness of any election of directors, which election occurs
after a public announcement (and prior to the withdrawal or
abandonment of such announcement) by a third party of an intent or
proposal to engage (without the current and continuing concurrence of
the Board) in a transaction involving an acquisition of or business
combination with the Corporation or otherwise to become an Acquiring
Person (as defined below), and which election results in a majority of
the Board being comprised of persons who were not nominated by the
Board in office immediately prior to such election.
The "Stock Acquisition Date" is defined as the earlier of (x) the
first date of public announcement by the Corporation that any person
or group (other than certain exempt persons or groups) has acquired,
or obtained the right to acquire, beneficial ownership of 15 % or more
of the shares of Common Stock then outstanding or (y) the date that
any Person (as defined in the Rights Agreement) enters into an agreement
or arrangement with the Corporation or any of its Subsidiaries (as
defined in the Rights Agreement) providing for an Acquisition Transaction
(as defined below) (any person described in clause (x) or clause (y)
above is referred to as an "Acquiring Person"). None of Xxxxxxxx Xxxxxxx
Keon, Xxxx Xxxxxxx Xxxxxx and Xxxxxxx Xxxxxxx Xxxxxxx, or any of their
respective spouses or descendants, or certain related trusts or other
entities (or a group comprised solely of such persons) will be deemed to
be an Acquiring Person as long as all such persons beneficially own less
than 40.1% of the outstanding shares of Common Stock. An "Acquisition
Transaction" is defined as (a) a merger, consolidation or similar
transaction as a result of which stockholders of the Corporation will
own less than 60% of the outstanding shares of Common Stock or the
common stock of a publicly traded entity which controls the Corporation
or into which the Corporation has been merged or otherwise combined
(based solely on the shares of Common Stock received by such stockholders,
in their capacity as stockholders of the Corporation, pursuant to such
transactions), (b) a purchase or other acquisition of all or a
substantial portion of the assets of the Corporation and its
subsidiaries, or (c) a purchase or other acquisition of securities
representing 15% or more of the shares of Common Stock then
outstanding.
Following the Record Date and until the Distribution Date, (i)
the Rights will be evidenced by the Common Stock certificates and will
be transferred with and only with such Common Stock certificates, (ii)
new Common Stock certificates issued after the Record Date will
contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificate for Common Stock
outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate. The Rights
will not be exercisable until the Distribution Date and will expire at
the close of business on September 22, 2019, unless earlier redeemed
by the Corporation as described below. As soon as practicable after
the Distribution Date, Rights Certificates will be mailed to holders
of record of the Common Stock as of the close of business on the
Distribution Date and, thereafter, the separate Rights Certificates
alone will represent the Rights. Except as otherwise determined by
the Board, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event (a "Flip-in Event") that any person, at any time
after the date of the Rights Agreement, becomes an Acquiring Person,
each holder of a Right thereafter will have the right to receive, upon
exercise thereof, Common Stock (or, in certain circumstances, cash,
property or other securities of the Corporation) having a value equal
to two times the Purchase Price. Notwithstanding any of the foregoing,
following the occurrence of a Flip-in Event, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person, any of its associates or
affiliates, and certain of its transferees, will be null and void.
Moreover, the Rights will not be exercisable following the first
occurrence of a Flip-in Event until such time as the Rights are no
longer redeemable by the Corporation as described below.
In the event that, at any time following the Stock Acquisition
Date, (i) the Corporation is acquired in a merger or other business
combination transaction or (ii) 50% or more of the Corporation's
assets or earning power is sold or transferred (each, a "Flip-over
Event"), each holder of a Right (except Rights which previously have
been voided as described above) shall thereafter have the right to
receive, upon exercise thereof, common stock or other securities of
the acquiring company having a value equal to two times the Purchase
Price. The Purchase Price payable, and the number of shares of Common
Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time in accordance with
customary antidilution provisions. With certain exceptions, no
adjustment to the Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price. No fractional
shares will be issued. Instead, a cash payment will be made in lieu
of fractional shares based on the market price of the Common Stock on
the most recent trading day during which a trade occurred prior to the
date of exercise.
At any time after the Rights become exercisable for Common Stock,
the Board may exchange the unexercised Rights (other than Rights owned
by any Acquiring Person which have become void), in whole or in part,
at an exchange ratio of one share of Common Stock (or of a share of a
class or series of the Corporation's stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
Notwithstanding the foregoing, no such exchange of the Rights may be
authorized by the Board during the Special Period or at any time when
the Rights are not redeemable. The Board is empowered to redeem the
Rights in whole, but not in part, at a price of $0.01 per Right (the
"Redemption Price") at any time before the earlier of (i) the close of
business on the 20th day following the Stock Acquisition Date or (ii)
the final expiration date of the Rights. Immediately upon the action
of the Board ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Notwithstanding the foregoing, in the event that after a public
announcement (and prior to the withdrawal or abandonment of such
announcement) by a third party of an intent or proposal to engage
(without the current and continuing concurrence of the Board) in a
transaction involving an acquisition of or business combination with
the Corporation or otherwise to become an Acquiring Person, there is
an election of directors (whether at one or more stockholder meetings
and/or pursuant to written stockholder consents) resulting in a
majority of the Board being comprised of persons who were not
nominated by the Board in office immediately prior to such election,
then following the Special Period, the Rights, if otherwise then
redeemable, will only be redeemable by the Board either (1) if the
Board has followed certain prescribed procedures or (2) in any other
case, provided that, if in any such other case the Board's decision
regarding redemption and any acquisition or business combination is
challenged as a breach of fiduciary duty of care or loyalty, the
directors can establish the entire fairness of such decision without
the benefit of any business judgment rule or other presumption. The
procedures required under clause (1) include: (a) the retention of an
independent financial advisor, and the receipt by the Board of (i) the
views of such advisor regarding whether redemption of the Rights will
serve the best interests of the Corporation and its stockholders, or
(ii) such advisor's statement that it is unable to express such a
view, setting forth the reason therefor; and (b) with respect to any
pending acquisition or business combination proposal (i) the
implementation by the Board, with the advice of its independent
financial advisor, of a process and procedures which the Board and
such advisor conclude would be most likely to result in the best value
reasonably available to stockholders, (ii) receipt of a fairness
opinion from such advisor, and the Board determining, and such advisor
confirming, that it has no reason to believe that a superior
transaction is reasonably available, and (iii) execution of a
definitive transaction agreement.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to
the Corporation, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercisable
for Common Stock (or other consideration) or for common stock of an
acquiring company as set forth above.
The Rights Agreement may be amended by the Board without the
approval of any holders of Rights (a) prior to the Distribution Date,
in any manner and (b) after the Distribution Date, in order to (i)
cure any ambiguity, (ii) correct or supplement provisions which may be
defective or inconsistent, (iii) make changes which do not adversely
affect the interests of holders of Rights (other than those held by an
Acquiring Person or certain related persons) or (iv) shorten or
lengthen any time period under the Rights Agreement (including the
time period governing redemption), provided that no supplement or
amendment to the Rights Agreement may be made during the Special
Period or at any time when the Rights are nonredeemable other than
supplements or amendments of the type contemplated by clause (i) or
(ii) above. The Rights may have certain anti-takeover effects. The
Rights will cause substantial dilution to a person or group that
attempts to acquire the Corporation unless the acquisition is
conditioned on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business
combination properly approved by the Board.
A copy of the Rights Agreement will be filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement is available to all Rights
holders free of charge from the Corporation. This summary description
of the Rights does not purport to be complete and is qualified in its
entirety by reference to the full text of the Rights Agreement, which
is hereby incorporated by this reference.
* * * * * * * * * * * * * * *
