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EXHIBIT 4.4
FIRST MCMINNVILLE CORPORATION
SHAREHOLDERS RIGHTS AGREEMENT
DATED JUNE 10, 1997
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SHAREHOLDER RIGHTS AGREEMENT
FIRST MCMINNVILLE CORPORATION
THE FIRST NATIONAL BANK OF MCMINNVILLE, RIGHTS AGENT
JUNE 10, 1997
June 10, 1997
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TABLE OF CONTENTS
SECTION 1 - CERTAIN DEFINITIONS....................................................1
SECTION 2 - APPOINTMENT OF RIGHTS AGENT............................................6
SECTION 3 - ISSUE OF RIGHTS CERTIFICATES...........................................6
SECTION 4 - FORM OF RIGHTS CERTIFICATES............................................8
SECTION 5 - COUNTERSIGNATURE AND REGISTRATION......................................8
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...................11
SECTION 9 - AVAILABILITY OF COMMON SHARES.........................................11
SECTION 10 - RECORD HOLDERS OF COMMON SHARES ISSUED
UPON EXERCISE OF RIGHTS.............................................12
SECTION 11 - ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND
OF COMMON SHARES OR NUMBER OF RIGHTS................................12
SECTION 12 - CERTIFICATE OF ADJUSTMENT...........................................18
SECTION 13 - CONSOLIDATION, SHARE EXCHANGE, MERGER OR SALE
OR TRANSFER OF ASSETS OR EARNING POWER..............................18
SECTION 14 - FRACTIONAL RIGHTS AND FRACTIONAL SHARES..............................21
SECTION 15 - RIGHTS OF ACTION.....................................................22
SECTION 16 - AGREEMENT OF RIGHT HOLDERS...........................................22
SECTION 17 - RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER...................23
SECTION 18 - CONCERNING THE RIGHTS AGENT..........................................24
SECTION 19 - MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT............24
June 10, 1997
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SECTION 20 - DUTIES OF RIGHTS AGENT...............................................25
SECTION 21 - CHANGE OF RIGHTS AGENT...............................................27
SECTION 22 - ISSUANCE OF NEW RIGHTS CERTIFICATES..................................28
SECTION 23 - REDEMPTION...........................................................28
SECTION 24 - EXCHANGE.............................................................29
SECTION 25 - NOTICE OF CERTAIN EVENTS.............................................30
SECTION 26 - NOTICES..............................................................31
SECTION 27 - SUPPLEMENTS AND AMENDMENTS...........................................31
SECTION 28 - SUCCESSORS...........................................................32
SECTION 29 - DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.................32
SECTION 30 - BENEFITS OF THIS RIGHTS AGREEMENT....................................33
SECTION 31 - SEVERABILITY.........................................................33
SECTION 32 - GOVERNING LAW........................................................33
SECTION 33 - COUNTERPARTS.........................................................34
SECTION 34 - DESCRIPTIVE HEADINGS.................................................34
SIGNATURES........................................................................34
EXHIBIT A - FORM OF RIGHTS CERTIFICATE............................................37
EXHIBIT B- FORM FOR EXERCISE OF RIGHTS CERTIFICATE................................40
EXHIBIT C - SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES...........................42
June 10, 1997
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SHAREHOLDER RIGHTS AGREEMENT
This Shareholder Rights Agreement (the "Rights Agreement"), effective as of
June 10, 1997, between First McMinnville Corporation, a Tennessee corporation
(the "Company"), and The First National Bank of McMinnville, a national banking
association (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on June 10, 1997, the Board of Directors of the Company authorized
and declared a dividend of one common share purchase right for each share of the
Company's common stock outstanding at the close of business on June 10, 1997
(the "Record Date"), each such right representing the right to purchase one
share of the Company's common stock upon the terms and subject to the conditions
therein set forth. At that time the Board further authorized and directed the
issuance of one common share purchase right with respect to each share of the
Company's common stock that became outstanding between the Record Date and the
Distribution Date (as hereinafter defined);
Accordingly, 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 Rights Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall become, at any time after
the date of this Rights Agreement (whether or not such status continues for any
period), the Beneficial Owner of Common Shares representing Ten Percent (10%) or
more of the Common Shares then outstanding, other than as a result of a
Permitted Offer. Notwithstanding the foregoing, (A) the term "Acquiring Person"
shall not include (i) the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan or pursuant
to any trust agreement as to which the Company is a signatory ("Trust
Agreement"), or (ii) any Person, who or which together with all Affiliates and
Associates of such Person becomes the Beneficial Owner of Ten Percent (10%) or
more of the then outstanding Common Shares as a result of the acquisition of
Common Shares directly from the Company (provided, however, that if, after such
acquisition, such Person, or an Affiliate or Associate of such Person, becomes
the Beneficial Owner of any additional Common Shares in an acquisition not made
directly from the Company, then such Person shall be deemed an Acquiring
Person), and (B) no Person shall be deemed to be an "Acquiring Person" either
(X) as a result of the acquisition of Common Shares by the Company which, by
reducing the number of Common Shares outstanding,
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increases the proportional number of shares beneficially owned by such Person
together with all Affiliates and Associates of such Person; except that if (i) a
Person would become an Acquiring Person (but for the operation of this subclause
(X)) as a result of the acquisition of Common Shares by the Company, and (ii)
after such share acquisition by the Company, such Person, or an Affiliate or
Associate of such Person, becomes the Beneficial Owner of any additional Common
Shares, then such Person shall be deemed an Acquiring Person, or (Y) if (i) such
Person, or an Affiliate or Associate of such Person, inadvertently becomes the
Beneficial Owner of Ten Percent (10%) or more of the outstanding Common Shares,
(ii) within five (5) calendar days thereafter such Person notifies the Board of
Directors (and the Board actually received notice within such time frame) that
such Person did so inadvertently and (iii) within two (2) Trading Days after
such notification, such Person is the Beneficial Owner of less than Ten Percent
(10%) of the outstanding Common Shares.
(b) "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.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to have acquired "beneficial ownership" of, or to "beneficially own", any
securities: (i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act as of the
date hereof; (ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange;
or (B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (2) is not also
then reportable 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 with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of "Beneficial Owner"
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to the contrary, the phrase "then outstanding", when used with reference to a
Person's beneficial ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(d) "Board" shall mean the Board of the Company.
(e) "Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which banking institutions in McMinnville, Tennessee are generally
obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 3:00 o'clock p.m.,
local time in McMinnville, Tennessee (Central Time) [herein, "Local Time"], on
such date; provided, however, that if such date is not a Business Day it shall
mean 3:00 o'clock p.m., Local Time, on the next succeeding Business Day.
(g) "Common Shares" when used with reference to the Company shall mean
shares of the Company's common voting stock, par value $2.50 per share, and any
other class or classes or series of common stock of the Company resulting from
any subdivision, combination, recapitalization or reclassification of shares of
such common stock. "Common Shares" when used with reference to any Person other
than the Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(h) "Company" shall have the meaning set forth in the recitals to this
Rights Agreement.
(i) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, as in effect on the date of this Rights Agreement.
(k) "Exchange Ratio" shall have the meaning set forth in Section 24 hereof.
(l) "Final Expiration Date" shall have the meaning set forth in Section
7(a)hereof.
(m) "NASDAQ" shall have the meaning set forth in Section 11(d) hereof.
(n) "Permitted Offer" shall mean a tender or exchange offer which is for
all outstanding Common Shares at a price and on terms determined, prior to the
purchase of shares under such tender or exchange offer, by at least a majority
of the members of the Board of Directors who are not officers of the Company and
who are not (or would not be, if the offer were consummated) Acquiring Persons
or Affiliates, Associates, nominees or representatives of an Acquiring Person,
to be adequate and otherwise in the best interests of the Company and its
stockholders (other than the
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Person or any Affiliate or Associate thereof on whose basis the offer is being
made). In determining whether an offer is adequate or in the best interests of
the Company and its shareholders, the Board may take into account all factors
that it deems relevant including, without limitation, (1) the consideration
being offered in the proposal in relation to the Board's estimate of: (i) the
current value of the Company in a freely negotiated sale of either the Company
by merger, consolidation or otherwise, or all or substantially all of the
Company's assets, (ii) the current value of the Company if orderly liquidated,
and (iii) the future value of the Company over a period of years as an
independent entity discounted to current value; (2) then existing political,
economic and other factors bearing on security prices generally or the current
market value of the Company's securities in particular; (3) whether the proposal
might violate federal, state or local laws; (4) social, legal and economic
effects on employees, suppliers, customers and others having similar
relationships with the Company, and the communities in which the Company
conducts its businesses; (5) the financial condition and earnings prospects of
the person making the proposal including the person's ability to service its
debt and other existing or likely financial obligations; and (6) the competence,
experience and integrity of the person making the acquisition proposal, and all
other facts and factors permitted by law including, without limitation, T.C.A.
xx.xx. 00-000-000, et seq., ss.ss.00-000-000, et seq., and ss.ss.00-000-000, et
seq.
(o) "Person" shall mean any individual, firm, partnership, limited
liability partnership, limited partnership, limited liability company,
corporation, trust, association, joint venture or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(p) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(q) "Purchase Price" shall have the meaning set forth in Section 7(a)
hereof.
(r) "Record Date" shall have the meaning set forth in the recitals to this
Rights Agreement.
(s) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(t) "Redemption Price" shall have the meaning set forth in Section 23
hereof.
(u) "Rights" shall mean the rights to purchase Common Shares authorized by
the Board of Directors of the Company after the Record Date.
(v) "Rights Agent" shall have the meaning set forth in the recitals to this
Rights Agreement.
(w) "Rights Agreement" shall have the meaning set forth in the recitals to
this Rights Agreement.
(x) "Rights Committee" shall have the meaning set forth in Section 11(a)
hereof.
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(y) "Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.
(z) "Securities Act" shall mean the Securities Act of 1933, as amended, as
in effect from time to time during the term of this Rights Agreement.
(aa) "Shares Acquisition Date" shall mean the first date of a public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such;
provided, that, if such Person is determined not to have become an Acquiring
Person pursuant to Section 1(a) hereof, then no Shares Acquisition Date shall be
deemed to have occurred.
(bb) "Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person.
(cc) "Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
(dd) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
(ee) "Trust Agreement" shall have the meaning set forth in Section 1(a)
hereof.
(ff) "Voting Securities" shall have the meaning set forth in Section 13(a)
hereof.
SECTION 2
APPOINTMENT OF RIGHTS AGENT
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Common Shares)
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 and/or successor Rights Agents as it may deem necessary,
prudent and/or desirable.
SECTION 3
ISSUE OF RIGHTS CERTIFICATES
(a) Until the earlier of (i) the close of business on the tenth day after
the Shares Acquisition Date or (ii) the close of business on the tenth Business
Day (or such later date as may be determined by action of the Board of Directors
of the Company prior to such time as any Person
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becomes an Acquiring Person) 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 entity
holding Common Shares for or pursuant to the terms of any such plan or, pursuant
to the Trust Agreement) is first published or sent or given within the meaning
of Rule 14d-2 of the General Rules and Regulations under the Exchange Act, if
upon consummation thereof, such Person would be the Beneficial Owner of Ten
Percent (10%) or more of the shares of Common Stock then outstanding; the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for the Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be certificates for Rights)
and not by separate certificates, and (y) the Rights (and the right to receive
separate certificates ("Rights Certificates")) will be transferable only in
connection with the transfer of the underlying Common Shares (including a
transfer to the Company) as more fully set out below. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid mail, to
each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Rights Certificate, which shall be in substantially the form of
Exhibit A hereto (the "Rights Certificate"), evidencing one Right for each
Common Share so held. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, or on request,
the Company will send a copy of a Summary of Rights to Purchase Common Shares,
in substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the Record Date, at the address of such holder shown on
the records of the Company. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding, with or without a copy of the Summary
of Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired shares which are subsequently disposed of by the
Company) after the Record Date but prior to the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following legend:
"This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement, as it may from time to time be
supplemented or amended, between First McMinnville Corporation and The
First National Bank of McMinnville (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of First McMinnville Corporation.
Under certain circumstances, as set forth in the Rights Agreement, such
rights may be redeemed or exchanged, may expire, or may be evidenced by
separate certificates and no longer be
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evidenced by this certificate. First McMinnville Corporation will mail to
the holder of this certificate a copy of the Rights Agreement without
charge within five days after receipt of a written request therefor. Under
certain circumstances, rights issued to or held by Acquiring Persons or
their Affiliates or Associates (as defined in the Rights Agreement) and any
subsequent holder of such rights may become null and void."
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated therewith. In the event that the Company
purchases or acquires any Common Shares prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
unless and until such Common Shares are subsequently issued by the Company so
that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.
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 be substantially the same
as provided for in Section 3(a) hereof 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 Rights 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 22 hereof,
the Rights Certificates shall entitle the holders thereof to purchase such
number and kind of Common Shares as shall be set forth therein at the price per
share set forth therein, but the number and kind of such Common Shares and the
price per share shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights which are null and void pursuant to Section
11(a)(ii) of this Rights Agreement and any Rights Certificate issued pursuant to
Section 6, Section 11 or Section 22 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 are null
and void. "Notwithstanding the above provision, failure to place such legend on
any Rights Certificate(s) representing Rights which are otherwise null and void
pursuant to the terms of this Rights Agreement, shall not affect or reverse the
null and void status of such Rights.
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SECTION 5
COUNTERSIGNATURE AND REGISTRATION
The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President, any of its
Vice Presidents, or its Treasurer, either manually or by facsimile signature,
shall have affixed thereto the Company's seal or a facsimile thereof, and shall
be attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
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 the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by 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 Certificate 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 Rights Agreement any
such person was not such an officer. 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 such Rights Certificate 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
Subject to the provisions of Section 14 hereof, at any time after the Close
of Business on the Distribution Date, and at or prior to the Close of Business
on the earlier of the Redemption Date or the Final Expiration Date, any Rights
Certificate or Rights Certificates (other than Rights Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Rights Certificate or Rights Certificates,
respectively, entitling the registered holder to purchase a like number and kind
of Common Shares as the Rights Certificate or Rights Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office or offices
of
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the Rights Agent designated for such purpose. Thereupon, the Rights Agent shall
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 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. 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,
at the Company's request, 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
make and deliver a new Rights Certificate of like tenor to the Rights Agent for
delivery to the registered holder 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 11(a)(ii) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) 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 on the reverse side thereof 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 price per share (rounded upward to the
nearest cent in the event of a fractional price) provided for in paragraph (b)
below (the "Purchase Price") for each Common Share as to which the Rights are
exercised, at or prior to the earliest of (i) the close of business on Monday,
June 4, 2007 (the "Final Expiration Date"), (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof (the "Redemption Date"), or (iii)
the time at which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each Common Share pursuant to the exercise of a
Right shall initially be One Hundred and Twenty ($120.00), subject to adjustment
from time to time as provided in Sections 11 and 13 hereof, and shall be payable
in lawful money of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the Common Shares to be purchased and an amount equal to
any applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Common Shares
certificates for the number and kind of Common Shares to be purchased (or
depository receipts when appropriate) and
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the Company hereby irrevocably authorizes its transfer agents to comply with all
such requests, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates, 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) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Rights Certificate.
(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 to the registered holder of such Rights Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 of this Agreement.
(e) So long as the Common Shares issuable upon the exercise of Rights may
be listed on any national securities exchange (including the NASDAQ), the
Company shall use its best efforts to cause all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(f) A form for exercise of a Rights Certificate is included as Exhibit B.
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 to 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 Rights 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, or shall,
at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9
AVAILABILITY OF COMMON SHARES
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Common Shares or any Common
Shares held in its
June 10, 1997
15
treasury, the number and kind of Common Shares that will be sufficient to permit
the exercise in full of all outstanding Rights in accordance with this Rights
Agreement.
(b) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Common Shares 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 Common Shares.
(c) The Company 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 or of any Common
Shares 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 certificates or depository receipts for the Common Shares in a name
other than that of, the registered holder of the Rights Certificate evidencing
Rights surrendered for exercise or to issue or to deliver any certificates for
Common Shares upon the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
SECTION 10
RECORD HOLDERS OF COMMON SHARES
ISSUED UPON EXERCISE OF RIGHTS
Each person in whose name any certificate for Common Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares 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 any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Company's transfer
books for the Common Shares are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which such transfer books are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a holder of Common Shares for which the
Rights evidenced thereby 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.
June 10, 1997
16
SECTION 11
ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND
OF COMMON SHARES OR NUMBER OF RIGHTS
(a)(i) The Purchase Price, the number of Common Shares or other securities
covered by 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 Record Date (A) declare a dividend on
the Common Shares payable in Common Shares, (B) subdivide or otherwise convert
the outstanding Common Shares into a greater number of such shares, (C) combine
or otherwise convert the outstanding Common Shares into a smaller number of such
shares, or (D) issue any shares of its capital stock in a reclassification of
Common Shares (including any such reclassification in connection with a share
exchange, consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect for Rights at the time of the record date for such
dividend or of the effective date of such subdivision, conversion, combination
or reclassification, and the number and kind of shares of capital stock issuable
on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall, upon payment of the Purchase Price then in
effect, be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Common Shares transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, conversion, combination or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one such Right be less than the per share par value
of the Common Shares unless (x) permitted by law and (y) authorized by the Board
of Directors or its committee designated to administer this Rights Plan (the
"Rights Committee"). If an event occurs which would require an adjustment under
both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Rights Agreement, in the event any
Person becomes an Acquiring Person, then the Purchase Price for each Common
Share issuable upon exercise of Rights shall be reduced to an amount equal to
Fifteen Percent (15%) of the current market price per share of such Common Share
(determined pursuant to Section 11(d)) on the Shares Acquisition Date or such
greater price (not to exceed one-third (33 1/3%) of the said current price) as
the Rights Committee shall determine. Notwithstanding the above, if the
transaction that would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii).
From and after the occurrence of the event described above, any Rights that
are or were acquired or beneficially owned by any Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be void and any holder of
such Rights shall thereafter have no right to
June 10, 1997
17
exercise such Rights under any provision of this Rights Agreement. No Rights
Certificate shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void pursuant to
the preceding sentence or any Associate or Affiliate thereof; no Rights
Certificate shall be issued at any time upon the transfer of any Rights to or
from an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof or to or from any nominee of such
Acquiring Person, Associate or Affiliate; and any Rights Certificate delivered
to the Rights Agent for transfer to or from an Acquiring Person (or any
Associate, Affiliate or nominee of such Acquiring Person) whose Rights would be
void pursuant to the preceding sentence shall be canceled.
(iii) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the Company
shall, to the extent permitted by applicable law, take all such action as may be
necessary to authorize additional Common Shares for issuance upon exercise of
the Rights, including the calling of a meeting of shareholders; provided,
however, if the Company is unable to cause the authorization of additional
Common Shares then the Company, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect on the date hereof to
which it is a party, shall, at its option (A) pay cash equal to twice the
applicable Purchase Price (as adjusted pursuant to this Section 11) in lieu of
issuing any such Common Shares and requiring payment therefor, or (B) issue
equity securities having a value equal to the market price of Common Shares
which otherwise would have been issuable pursuant to the foregoing subparagraph
(ii), which value shall be determined by the Rights Committee or by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent, or (C) distribute a combination of Common Shares,
cash and/or other equity securities having a value equal to the market price of
the shares of the Common Shares which otherwise would have been issuable
pursuant to the foregoing subparagraph (ii), determined in accordance with the
preceding clause (B), upon exercise of the related Rights.
(b) In case the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Common Shares
entitling them (for a period expiring within Forty Five (45) calendar days after
such record date) to subscribe for or purchase Common Shares, or securities
convertible into Common Shares at a price per share (or having a conversion
price per share, if a security convertible into Common Shares) less than the
then current per share market price (as defined in Section 11(d)) of the Common
Shares 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 Common Shares outstanding on such record date plus the number of
Common Shares which the aggregate offering price of the total number of shares
so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of Common Shares
outstanding on such record date plus the number of additional Common Shares to
be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that
in no event shall the consideration to be paid upon the exercise
June 10, 1997
18
of one Right be less than the per share par value of the shares of capital stock
of the Company issuable upon exercise of one Right (except as provided in
Section 11(a)(i) hereof). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company or by the Rights Committee, whose determination shall
be described in a statement filed with the Rights Agent. Common Shares 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, options
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 the making of a
distribution to all holders of Common Shares (including any such distribution
made in connection with a consolidation, share exchange or merger in which the
Company is the continuing or surviving corporation), of evidences of
indebtedness or assets (other than a regular periodic cash dividend, a dividend
payable in Common Shares or other distribution referred to in Section 11(a)
hereof) 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
then current per share market price of the Common Shares on such record date,
less the fair market value (as determined in good faith by the Rights Committee
or by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent) of the portion of such assets or evidences of indebtedness so to
be distributed or of such subscription rights or warrants applicable to one
Common Share and the denominator of which shall be such current per share market
price of the Common Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the per
share par value of the shares of capital stock of the Company to be issued upon
exercise of one Right (except as provided in Section 11(a)(i) hereof). 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
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per share
market price" of a Common Share on any date shall be deemed to be the average of
the daily closing prices per share of a Common Share for the thirty (30)
consecutive Trading Days immediately prior to such date; provided, however, that
in the event that the current per share market price of a Common Share is
determined during a period following the announcement by the Company of (A) a
dividend or distribution on the Common Shares, payable in Common Shares or
securities convertible into Common Shares, or (B) any subdivision, conversion,
combination or reclassification of the Common Shares, and prior to the
expiration of thirty (30) Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share of a Common Share. The closing price for each day shall
June 10, 1997
19
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 Common Shares are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Common Shares are listed or admitted
to trading or, if Common Shares are not listed or admitted to trading on any
national securities exchange, 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 National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in use, or, if on any
such date Common Shares 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 Common Shares, selected by the Rights Committee or the Board
of Directors of the Company. If on any such date no market-maker is making a
market in Common Shares, the fair value of Common Shares on such date as
determined in good faith by Rights Committee or the Board of Directors of the
Company shall be used, whose determination shall be described in a statement
filed with the Rights Agent. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which Common Shares are listed or
admitted to trading is open for the transaction of business or, if Common Shares
are not listed or admitted to trading on any national securities exchange, a
Business Day. If Common Shares are not publicly held or so listed or traded,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Rights Committee or by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least One Percent (1%) in the Purchase Price;
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 one ten-thousandth of a share as the case
may be.
(f) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Common Shares, thereafter
the number of such other shares so receivable upon exercise of any Right 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 Shares
contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Common Shares shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder to the Purchase Price applicable thereto shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
Common Shares or other capital stock purchasable from time to time hereunder
upon exercise of such Rights, all subject to further adjustment as provided
herein.
June 10, 1997
20
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each related Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, the number of Common Shares
(calculated to the nearest one ten-thousandth of a share) obtained by (i)
multiplying (x) the number of shares covered by such Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately prior to such
Purchase Price adjustment and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such Purchase Price adjustment.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights in substitution for any adjustment
in the number of Common Shares purchasable upon the exercise of a Right. Each of
such Rights outstanding after such adjustment of the number of such Rights shall
be exercisable for the number of Common Shares for which such Right was
exercisable immediately prior to such adjustment. Each such Right held of record
prior to such adjustment of the number of Rights shall become that number of
such Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of such Purchase
Price by the Purchase Price in effect immediately after such adjustment. 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 such Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of such Rights Certificates on such record date 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 such Right 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 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 Common Shares issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of Common Shares which were expressed in such
Rights Certificates theretofore issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Common Shares issuable
upon exercise of the Rights, the Company shall 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 Common Shares at such
adjusted Purchase Price. In this regard, the Company relies expressly on T.C.A.
ss. 48-16-
June 10, 1997
21
101(c)(5) providing that the mere recitation of par value does not
create a requirement of a minimum consideration for the issuance of shares.
(l) In this regard, the Company relies expressly on T.C.A. ss.00-00-000 (c)
(5) providing that the mere recitation of par value does not create a
requirement of a minimum consideration for the issuance of shares. 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 issuing to the holder of
any related Right exercised after such record date of the Common Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Common Shares 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 upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that (i) any consolidation or subdivision of the Common Shares, (ii)
issuance wholly for cash of any Common Shares at less than the current market
price, (iii) issuance wholly for cash of Common Shares or securities which by
their terms are convertible into or exchangeable for Common Shares, (iv)
dividends on Common Shares payable in Common Shares or (v) issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of Common Shares, shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Sections 23 or 27 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to, or if at the time
such action is taken it is reasonably foreseeable that the effect of such action
is to, materially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
SECTION 12
CERTIFICATE OF ADJUSTMENT
Whenever an adjustment is made as provided in Sections 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares a copy of
such certificate, and (c) include a brief summary thereof in the next quarterly
or current report filed pursuant to the Exchange Act by the Company, and,
following the Distribution Date, mail such summary to each holder of a Rights
Certificate in accordance with Section 25 hereof.
June 10, 1997
22
SECTION 13
CONSOLIDATION, SHARE EXCHANGE, MERGER OR SALE OR TRANSFER
OF ASSETS OR EARNING POWER
(a) In the event that, on or following the Distribution Date, directly or
indirectly, (x) the Company shall consolidate with, engage in a share exchange
with, or merge with and into any other Person, (y) the Company shall consolidate
with, engage in a share exchange with, or merge with, any other Person, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger (other than, in a case of any transaction described in (x) or (y), a
merger, share exchange, or consolidation which would result in all of the
securities generally entitled to vote in the election of directors ("voting
securities") of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into securities
of the surviving entity) all of the voting securities of the Company or such
surviving entity outstanding immediately after such merger, share exchange, or
consolidation and the holders of such securities not having changed as a result
of such merger, share exchange, or consolidation), or (z) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or a series of related transactions, assets or
earning power aggregating more than Fifty Percent (50%) of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other Person
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which does not violate Section 11(n)hereof), then, and in
each such case (except as provided in Section 13(d) hereof), proper provision
shall be made so that (i) each holder of a Right, except as provided in Section
11(a) hereof, shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price (without giving
effect to any adjustment to such Purchase Price pursuant to Section 11(a)(ii))
multiplied by the number of Common Shares for which such Right is then
exercisable, in accordance with the terms of this Rights Agreement, such number
of freely tradable Common Shares of the Principal Party, not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall
equal the result obtained by (A) multiplying the then current Purchase Price
(without giving effect to any adjustment to such Purchase Price pursuant to
Section 11(a)(ii)) by the number of Common Shares for which such Right is then
exercisable and dividing that product by (B) Twenty-Five Percent (25%) of the
then current per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Rights 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 an event described in this Section 13; and
(iv) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter
June 10, 1997
23
be applicable, as nearly as reasonably may be, in relation to the Common Shares
thereafter deliverable upon the exercise of the Rights.
(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 Common Shares of the
Company are converted in such merger, share exchange, or consolidation, and if
no securities are so issued, the Person that is the other party to such merger
or consolidation (including, if applicable, the Company if it is the surviving
corporation); 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 portion of the assets or earnings power transferred pursuant to such
transaction or transactions; provided, however, that in any of the foregoing
cases, (1) if the Common Shares of such Person are not at such time and have 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 Shares of which are and have been so
registered, "Principal Party" shall refer to such other Person; (2) in case such
Person is a Subsidiary, directly or indirectly, of more than one Person, the
Common Shares 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 Shares having the greatest aggregate market value; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint ventures as if such party were a
"Subsidiary" of both or all of such joint ventures and the Principal Parties in
each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such consolidation, merger, share
exchange, sale or transfer unless the Principal Party shall have a sufficient
number of its authorized Common Shares 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
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger, share exchange, sale or transfer mentioned in paragraph
(a) of this Section 13, the Principal Party at its own expense shall: (i)
prepare and file a registration statement under the Securities 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
such Act) until the Final Expiration Date; (ii) use its best efforts to qualify
or register the Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as may be necessary or
appropriate; and (iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act. The provisions
of this Section 13 shall similarly apply to successive mergers, share exchanges,
consolidations, sales or other transfers. In the event that the events
June 10, 1997
24
described in this Section 13 shall occur at any time after the occurrence of the
events described in Section 11(a)(ii), the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is consummated with a Person or Persons
who acquired Common Shares pursuant to a Permitted Offer (or a wholly owned
subsidiary of any such Person or Persons), (ii) the price per share of the
Common Shares offered in such transaction is not less than the price per share
of Common Shares whose shares were purchased pursuant to such tender offer or
exchange offer and (iii) the form of consideration being offered to the
remaining holders of shares of Common Shares pursuant to such transaction is the
same as the form of consideration paid pursuant to such tender offer or exchange
offer. Upon consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
SECTION 14
FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Company shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. In lieu of 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 the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of such Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any 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
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if such Rights are not
listed or admitted to trading on any national securities exchange, 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 NASDAQ or such other
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 such Rights selected by the Board
of Directors of the Company. If on any such date no such market maker is making
a market in the Rights, the fair value of such Rights on such date as determined
in good faith by the Rights Committee or by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent, shall be used.
June 10, 1997
25
(b) The Company shall not be required to issue fractions of Common Shares
upon (i) exercise of the Rights or exchange of the Rights for Common Shares
pursuant to Section 24 of this Rights Agreement, or to distribute certificates
which evidence fractional shares of such securities. Fractions of Common Shares
may, at the election of the Company, be evidenced by depository receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided that such agreement shall provide that the holders of
such depositary receipts shall have the rights, privileges and preferences to
which they are entitled as beneficial owners of the Common Shares represented by
such depositary receipts. In lieu of fractional Common Shares or depositary
receipts, 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 Common Share. For the
purposes of this Section 14(b), the current market value of a Common Share shall
be the closing price of a Common Share (as determined pursuant to the second
sentence of Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of such Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
SECTION 15
RIGHTS OF ACTION
All rights of action in respect of this Rights Agreement, excepting the
rights of action given to the Rights Agent under 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 Shares); and any
registered holder of any Rights Certificate (or, prior to the Distribution Date,
of the Common Shares), 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 Shares), 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, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Rights 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 Rights Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this Rights
Agreement.
June 10, 1997
26
SECTION 16
AGREEMENT OF RIGHT HOLDERS
Every holder of a Right, by accepting the same, consents and agrees with
the Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares;
(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 of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in whose
name the Rights Certificate (or, prior to the Distribution Date, the associated
certificates for Common Shares ) 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 certificates for Common
Shares made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) the Company shall not be required to register the Rights under the
Securities Act or any other applicable law, rule, or regulation until a
Distribution Date shall have occurred and shall not have been timely rescinded
and, accordingly, the Rights Agent may require any purported transfer to be
prohibited or restricted unless and until there is a registration and/or until
the Rights holder provides to the Rights Agent a legal opinion, satisfactory in
form and substance, and signed by counsel, acceptable to the Rights Agent; and
(e) notwithstanding anything in this Rights Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or a beneficial interest in a Right or other Person as a result of
its inability to perform any of its obligations under this Rights 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, the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
June 10, 1997
27
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 Common Shares
or any other securities of the Company which may at any time be issuable on 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
The Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Rights 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 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 Rights
Agreement, including the costs and expenses of defending against any claim of
liability in the premises. The indemnity provided for herein shall survive the
expiration of the Rights and the termination of this Rights Agreement. The
Rights Agent shall be protected and shall incur no liability for, or in respect
of any action taken, suffered or omitted by it in connection with, its
administration of this Rights Agreement in reliance upon any Rights Certificate
or certificate for the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
June 10, 1997
28
SECTION 19
MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT
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 stock
transfer or all or substantially all of the corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Rights Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Rights Agreement any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such 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 Rights Agent 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 Rights Agreement. In case 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 Rights Agreement.
SECTION 20
DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by this
Rights Agreement upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company or its own in-house counsel), and the opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
June 10, 1997
29
(b) Whenever in the performance of its duties under this Rights Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chairman of the Rights Committee, the Chief Executive Officer, the President,
any Vice President, the Treasurer or the 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 Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own negligence, bad faith or willful misconduct. (d) The
Rights Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Rights Agreement or in the Rights
Certificates (except its countersignature on such Rights Certificates) or be
required to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(d) The Rights Agent shall not be under any responsibility in respect of
the validity of this Rights 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 Rights Agreement or in any Rights
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights(including the Rights becoming void pursuant to Section 11(a)(ii)
hereof) or any adjustment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Common Shares to be
issued pursuant to this Rights Agreement or any Rights Certificate or as to
whether any Common Shares will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(e) 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 Rights Agreement.
(f) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from anyone
of the Chairman of the Board, the Chairman of the Rights Committee, the Chief
Executive Officer, the President, any Vice President, the Secretary or the
Treasurer of the Company, and to apply to such officers for advice or
instructions
June 10, 1997
30
in connection with its duties, and it shall not be liable for any action taken
or suffered by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.
(g) 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 were not Rights Agent under this
Rights Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity except in
direct conflict with the Purposes of this Rights Agreement (e.g., representing
an Acquiring Person in connection with the Company or the Common Stock).
(h) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
SECTION 21
CHANGE OF RIGHTS AGENT
The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Rights Agreement upon sixty (60) days' notice in
writing mailed to the Company and to each transfer agent of the Common Shares by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon ten (10) 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 Shares by registered or certified mail, and 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 sixty (60) 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 inspection by the Company), then the 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 corporation 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 or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at
June 10, 1997
31
the time of its appointment as Rights Agent a combined capital and surplus of at
least Twenty Million Dollars ($20,000,000.00), or (b) an affiliate of a
corporation 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, and account to the Company for, any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
and 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 any successor
Rights Agent, as the case may be.
SECTION 22
ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Rights Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Rights
Certificates (or labels for existing Rights Certificates) evidencing Rights in
such form as may be approved by its Rights Committee or Board of Directors 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 Rights Agreement. In
addition, in connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the earlier of the Redemption Date and the Final
Expiration Date, the Company (a) shall with respect to Common Shares so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities, notes
or debentures issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) the Company shall not be
obligated to issue any such Rights Certificates 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 Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
June 10, 1997
32
SECTION 23
REDEMPTION
(a) The Board of Directors of the Company may, at its option, at any time
prior to such time as any Person becomes an Acquiring Person, redeem all but not
less than all of the then outstanding Rights at a redemption price to be set by
the Rights Committee or by the Board of Directors ("Redemption Price"). The
Redemption Price shall be not more than $.01 per Right and not less than .001
per Right. The initial Redemption Price subject to change without notice, is set
at $.001 per Right. The Redemption Price shall be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof. The redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. The Rights Committee or the
Board of Directors may, without notice to any Rights holders, at any time adjust
the Redemption Price (up or down) within the foregoing parameters by written
statement filed with the Rights Agreement. No compensation shall ever be due to
a Rights holder in respect of any one or more adjustments.
(b) The Rights Committee or the Board of Directors may, without notice, to
any Rights holders, at any time adjust the Redemption Price within the foregoing
parameters by written statement filed with the Rights Agent. No compensation
shall ever be due to a Rights holder in respect of any one or more adjustments
(up or down). Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (b) of this
Section 23 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. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within thirty (30) days after such action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear 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 Shares. 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. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
June 10, 1997
33
SECTION 24
EXCHANGE
(a) The Board of Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common
Shares at an exchange ratio of one Common Share 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"). Notwithstanding the foregoing, the Board of
Directors 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
Shares for or pursuant to the terms of any such plan or any trust agreement
entered into by the Company to secure benefits payable under any employee
benefit plan of the Company or any Subsidiary of the Company), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of Common
Shares representing Fifty Percent (50%) or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company shall promptly mail a notice of any such exchange
to all of the holders of such Rights at 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 Shares for Rights will be effected and, in the event of any
partial exchange, the number and kind of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights being
exchanged (other than Rights which have become void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of such Rights.
(c) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights.
June 10, 1997
34
SECTION 25
NOTICE OF CERTAIN EVENTS
(a) In case the Company, following the Distribution Date, shall propose (i)
to pay any dividend payable in stock of any class or series to holders of Common
Shares or to make any other distribution to holders of Common Shares (other than
a regular quarterly cash dividend), (ii) to offer to holders of Common Shares
rights or warrants to subscribe for or to purchase any additional Common Shares
or any other securities, rights or options, (iii) to effect any reclassification
of Common Shares (other than a reclassification involving only the subdivision
of outstanding Common Shares), (iv) to effect any consolidation, share exchange,
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any such reorganization or sale or
other transfer), in one or more transactions, of Fifty Percent (50%) or more of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which does not violate Section
11(n) 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, in accordance with Section 26 hereof, a notice of such
proposed action to the extent feasible, which shall specify the record date for
the purposes of such stock dividend, or 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 holders of Common Shares 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 ten (10) days prior to the record date for
determining holders of Common Shares for purposes of such action, and in the
case of any such other action, at least ten (10) days prior to the date of the
taking of such proposed action or the date of participation therein by holders
of Common Shares, whichever shall be the earlier. The failure to give notice
required by this Section 25 or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote upon any such action.
(b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, in accordance with Section 26 hereof, a notice
of the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
SECTION 26
NOTICES
Notices or demands authorized by this Rights 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 first-class mail, postage
prepaid, addressed (until another address is filed in writing
June 10, 1997
35
with the Rights Agent) as follows: First McMinnville Corporation, 000 Xxxx Xxxx
Xxxxxx, XxXxxxxxxxx, Xxxxxxxxx 00000, Attention: Secretary. Subject to the
provisions of Section 21 hereof, any notice or demand authorized by this Rights
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 first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows: The First National Bank of
McMinnville, 000 Xxxx Xxxx Xxxxxx, XxXxxxxxxxx, Xxxxxxxxx 00000, Attention:
Trust Department. Notices or demands authorized by this Rights Agreement to be
given or made by the Company or the Rights Agent to the holder of any Rights
Certificate 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, or by other commonly recognized means,
such as by overnight courier.
SECTION 27
SUPPLEMENTS AND AMENDMENTS
Prior to the Distribution Date, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this Rights
Agreement without the approval of any holders of certificates representing
Common Shares. From and after the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this Rights
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); provided, however, that this Rights
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights.
Without limiting the foregoing, the Company may at any time prior to such time
as any Person becomes an Acquiring Person amend this Rights Agreement to lower
the thresholds set forth in Sections 1(a) and 3(a) hereof from Ten Percent (10%)
to not less than the greater of (i) any percentage greater than the largest
percentage of the then outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of any
such plan or the Trust Agreement) together with all Affiliates or Associates of
such Person, or (ii) Five Percent (5%). 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 or obligations of the Rights
Agent
June 10, 1997
36
under Section 18 or Section 20 of this Rights Agreement. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares.
SECTION 28
SUCCESSORS
All the covenants and provisions of this Rights Agreement by or for the
benefit of the Company or the Rights Agent shall bind each of them and inure to
the benefit of the irrespective successors and assigns hereunder.
SECTION 29
DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
For all purposes of this Rights Agreement, any calculation of the number of
Common Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares 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 of Directors of the Company or its Rights Committee
shall have the exclusive power and authority to administer this Rights Agreement
and to exercise all rights and powers specifically granted to the Board or to
the Company, or as maybe necessary or advisable in the administration of this
Rights Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Rights Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Rights Agreement (including a determination to redeem or not redeem the Rights
or to amend the Rights Agreement or a determination that an adjustment to the
Redemption Price or Exchange Ratio is or is not appropriate). 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 the Rights Committee (or any member of either
thereof) to any liability to any holders of the Rights.
SECTION 30
BENEFITS OF THIS RIGHTS AGREEMENT
Nothing in this Rights Agreement shall be construed to give to any person
or corporation other than the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date, the
Common Shares) any legal or equitable right, remedy or claim
June 10, 1997
37
under this Rights Agreement; but this Rights 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, the Common
Shares).
SECTION 31
SEVERABILITY
If any term, provision, covenant or restriction of this Rights 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 Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
SECTION 32
GOVERNING LAW
This Rights Agreement and each Rights Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Tennessee and for
all purposes shall be governed by and construed in accordance with the
substantive, procedural, and other laws of such State applicable to contracts to
be made and performed entirely within such State.
SECTION 33
COUNTERPARTS
This Rights Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
SECTION 34
DESCRIPTIVE HEADINGS
Descriptive headings of the several Sections of this Rights Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
June 10, 1997
38
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed and attested, all as of the day and year first above written.
SIGNATURES
THE COMPANY:
FIRST MCMINNVILLE CORPORATION
By:
-----------------------------------
Title:
--------------------------------
ATTEST BY SECRETARY:
----------------------------------
Secretary to the Board
THE RIGHTS AGENT:
THE FIRST NATIONAL BANK OF MCMINNVILLE
By:
-----------------------------------
Title:
--------------------------------
ATTEST BY SECRETARY:
----------------------------------
Secretary to the Board
June 10, 1997
39
EXHIBITS
June 10, 1997
40
EXHIBIT A
[SPECIMEN]
RIGHTS CERTIFICATE
FIRST MCMINNVILLE CORPORATION
Certificate No. R- Number of Rights
---------- ----------
RIGHTS NOT EXERCISABLE AFTER JUNE 4, 2007 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT A REDEMPTION PRICE TO
BE SET BY THE BOARD OF DIRECTORS (OR COMMITTEE THEREOF) AT A PRICE UP TO $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
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 June 10, 1997 (the "First McMinnville Corporation Rights Agreement"),
between First McMinnville Corporation, a Tennessee corporation (the "Company"),
and The First National Bank of McMinnville, national banking association (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 3:00 o'clock
p.m., Local Time, on June 4, 2007, at the principal office of the Rights Agent,
or at the office of its successor as Rights Agent, one fully paid non-assessable
share of First McMinnville Corporation Common Stock, par value $2.50 per share
(the "Stock"), at a purchase price (subject to adjustment from time to time and
on one or more occasions) of One Hundred Twenty Dollars ($120.00) per share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares of Stock which
may be purchased upon exercise hereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of June 10, 1997, (the
"Record Date") based on the shares of Stock of the Company as constituted at
such date. As provided in the Rights Agreement, the Purchase Price and the
number of shares of Stock 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. 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. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned offices of the Rights
Agent. This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Rights Certificate or Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of shares of
Stock as the Rights evidenced by the Rights Certificate or 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 Certificates for the number
of whole Rights not exercised. Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Rights Certificate (i) may be redeemed
by the Company at its option at a redemption price of up to $.01 per Right or
(ii) may be exchanged in whole or in part for shares of Stock. No fractional
shares of 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. No holder of this Rights Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of the
shares of 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
June 10, 1997
41
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 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 and
its corporate seal.
Dated as June 10, 1997.
Company: Countersigned: Rights Agent:
FIRST MCMINNVILLE CORPORATION FIRST NATIONAL BANK OF MCMINNVILLE
By: By:
------------------------------- -------------------------
Title: Title:
---------------------------- ----------------------
*****
[REVERSE SIDE OF CERTIFICATE FOLLOWS]
June 10, 1997
42
FORM OF ASSIGNMENT OF RIGHTS CERTIFICATE
(To be executed by the registered holder if such holder desires to transfer
the Rights Certificate.)
FOR VALUE RECEIVED, THE UNDERSIGNED hereby sells, assigns and transfers
unto _________________________________________________________________ (Please
print name and address of transferee) this Rights Certificate, together with all
right, title and interest therein, 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 Guaranteed:
-------------------------------------
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
The undersigned hereby certifies to First McMinnville Corporation, to the
Rights Agent, and to all other Rights holders who are not Acquiring Persons,
that the Rights evidenced by this Rights Certificate are not beneficially owned
by an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
-----------------------------------------------------------
Signature
Date:
----------------------------
The Rights represented by this certificate have not been registered under the
Securities Act of 1933 (as amended) or under the securities laws of any state,
territory, or other jurisdiction and therefore such Rights may not be resold,
transferred or hypothecated without (a) the registration of such Rights under
the Securities Act of 1933 or (b) an opinion of counsel satisfactory to the
corporation to the effect that such registration is not necessary and
appropriate transfers will be noted in the Corporation's stock records. Transfer
or encumbrance of these Rights is or may be subject to certain rights of the
corporation and/or other security holders. A copy of any such agreement may be
obtained upon written request by a bona fide Shareholder or Rights holder to the
Secretary of the Corporation.
June 10, 1997
43
EXHIBIT B
FORM FOR EXERCISE OF RIGHTS CERTIFICATE
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: First McMinnville Corporation
The undersigned hereby irrevocably elects to exercise ____________________
whole Rights represented by the attached Rights Certificate to purchase the
shares of Common Stock issuable upon the exercise of such Rights and requests
that certificates for such shares be issued in the name of:
_______________________________________________________
NAME OF RIGHTS HOLDER
(As Set Forth On the Rights Certificate)
________________________________________________________
Current Address of Rights Holder
________________________________________________________
Social Security or other Taxpayer Identification 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:
_______________________________________________________
NAME
________________________________________________________
Current Address of Rights Holder
________________________________________________________
Social Security or other Taxpayer Identification Number:
_______________________________________________________
Signature
(Signature must correspond to name as written upon the
face of the attached Rights Certificate in every
particular without alteration or enlargement or any
change whatsoever)
Date:
-------------------------------------------------
[Continued on Reverse Side]
June 10, 1997
44
[Reverse Side of Election Form]
SIGNATURE GUARANTEE:
-----------------------------------------------------------
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights
and shares of Common Stock, that the Rights evidenced by the attached Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
_______________________________________
Signature
================================================================================
NOTICE
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the attached Rights Certificate to be an Acquiring
Person or Affiliate or Associate thereof (as defined in the Rights Agreement) or
a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
================================================================================
June 10, 1997
45
EXHIBIT C
SUMMARY OF RIGHTS TO
PURCHASE COMMON SHARES
Effective as of June 10, 1997, the Board of Directors of First McMinnville
Corporation (the "Company") adopted a Shareholders Rights Agreement (the "Rights
Agreement") and authorized and declared a dividend of one common share purchase
right (a "Right") for each outstanding share of the Company's common voting
stock, par value $2.50 per share (the "Common Shares"). The dividend is payable
on June 30, 1997, to the Shareholders of record on that date (the "Record
Date"), and with respect to Common Shares issued thereafter until the
Distribution Date (as hereinafter defined) or the expiration or earlier
redemption or exchange of the Rights. Except as set forth below, each Right
entitles the registered holder to purchase from the Company, at any time after
the Distribution Date one Common Share at a price per share of One Hundred
Twenty Dollars ($120.00), subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are as set forth in the Rights Agreement.
Initially the Rights will be attached to all certificates representing
Common Shares than outstanding, and no separate Rights Certificates will be
distributed. The Rights will separate from the Common Shares upon the earlier to
occur of (i) Ten (10) days after the public announcement of a person's or group
of affiliated or associated persons' having acquired beneficial ownership of Ten
Percent (10%) or more of the outstanding Common Shares (such person or group
being hereinafter referred to as an "Acquiring Person"); or (ii) Ten (10) days
(or such later date as the Board may determine) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group's becoming an Acquiring
Person (the earlier of such dates being called the "Distribution Date").
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with, and only with, the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date (and to each initial record holder of certain Common Shares
issued after the Distribution Date), and such separate Rights Certificates alone
will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on Monday, June 4, 2007 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
In the event that any person becomes an Acquiring Person (except pursuant
to a tender or exchange offer which is for all outstanding Common Shares at a
price and on terms which a majority of certain members of the Board of Directors
determines to be adequate and in the best interests of the Company, its
stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "Permitted Offer")), each holder of a
Right will thereafter have the right (the "Flip-In Right") to acquire a Common
Share for a purchase price equal to an amount of Fifteen Percent (15%)
(adjustable up to One-Third (33 1/3%)) of the then current market price.
Notwithstanding the foregoing, all Rights that are, or were, beneficially owned
by any Acquiring Person or any affiliate or associate thereof will be null and
void and not exercisable.
In the event that, at any time following the Distribution Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the holders of all of the outstanding Common Shares immediately prior to
June 10, 1997
46
the consummation of the transaction are not the holders of all of the surviving
corporation's voting power, or (ii) more than Fifty Percent (50%) of the
Company's assets or earning power is sold or transferred, then each holder of a
Right (except Rights which have previously been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise and
payment of the Purchase Price, common shares of the acquiring company having a
value equal to two times the Purchase Price. If a transaction would otherwise
result in a holder's having a Flip-In as well as a Flip-Over Right, then only
the Flip-Over Right will be exercisable; if a transaction results in a holder's
having a Flip-Over Right subsequent to a transaction resulting in a holder's
having a Flip-In Right, a holder will have Flip-Over Rights only to the extent
such holder's Flip-In Rights have not been exercised.
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of Common Shares,
(ii) upon the grant to holders of Common Shares of certain rights or warrants to
subscribe for or purchase Common Shares at a price, or securities convertible
into Common Shares with a conversion price, less than the then current market
price of Common Shares, or (iii) upon the distribution to holders of Common
Shares of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends payable in
Common Shares) or of subscription rights or warrants (other than those referred
to above). However, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least One Percent (1%).
No fractional Common Shares will be issued and in lieu thereof, an
adjustment in cash will be made based on the market price of Common Shares on
the last trading day prior to the date of exercise if the Common Shares are
publicly traded or, if not, then as determined by the Board of Directors or
other authorized representative of the Company.
At any time prior to the time a person becomes an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
At any time after any person becomes an Acquiring Person and prior to the
acquisition by such person or group of Common Shares representing Fifty Percent
(50%) or more of the then outstanding Common Shares, the Board of Directors of
the Company may exchange the Rights (other than Rights which have become null
and void), in whole or in part, at an exchange ratio of one Common Share per
Right (subject to adjustment).
All of the provisions of the Rights Agreement may be amended prior to the
Distribution Date by the Board of Directors of the Company for any reason it
deems appropriate. Prior to the Distribution Date, the Board is also authorized,
as it deems appropriate, to lower the thresholds for distribution and Flip-In
Rights to not less than the greater of (i) any percentage greater than the
largest percentage then held by any shareholder, or (ii) Ten Percent (10%).
After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, defect or inconsistency, to
make changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or, subject to certain
limitations, to shorten or lengthen any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders of the Company, shareholders may, depending upon the
circumstances, recognize taxable income should the Rights become exercisable or
upon the occurrence of certain events thereafter.
Unless and until registered under the Securities Act and all other
applicable laws, rules, and regulations, the Rights are non-transferable and,
accordingly, the Rights Agent may require any purported transfer or assignment
to be
June 10, 1997
47
prohibited or restricted unless and until there is a registration and/or until
the Rights holder provides to the Rights Agent a legal opinion, satisfactory in
form and substance, and signed by counsel, acceptable to the Rights Agent.
A copy of the Rights Agreement has been or will be filed, as and when
determined by the Company, with the Securities and Exchange Commission as an
Exhibit to the Company's Registration Statement on an appropriate Form under the
Securities Act of 1933, as amended. A copy of the Rights Agreement is available
to bona fide Shareholders free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference.
Questions concerning the Rights Agreement may be directed in writing to:
President, First McMinnville Corporation, 000 Xxxx Xxxx Xxxxxx, XxXxxxxxxxx,
Xxxxxxxxx 00000.
June 10, 1997
