Layne Christensen Company and National City Bank, as Rights Agent Amended and Restated Rights Agreement Dated as of October 14, 2008
Exhibit 4.1
Xxxxx Xxxxxxxxxxx Company
and
National City Bank,
as Rights Agent
Amended and Restated
Rights Agreement
Rights Agreement
Dated as of October 14, 2008
AMENDED AND RESTATED
RIGHTS AGREEMENT
RIGHTS AGREEMENT
Amended and Restated Rights Agreement, dated as of October 14, 2008 (the “Agreement”), between
Xxxxx Xxxxxxxxxxx Company, a Delaware corporation (the “Company”), and National City Bank, as
Rights Agent (the “Rights Agent”).
RECITALS
WHEREAS, on October 12, 1998, the Board of Directors of the Company adopted this Agreement,
and authorized and declared a dividend of one preferred share purchase right (a “Right”) for each
Common Share (as defined in Section 1.6) of the Company outstanding at the close of business on
November 9, 1998 (the “Record Date”), each Right initially representing the right to purchase one
one-hundredth (subject to adjustment) of a share of Series A Junior Participating Preferred Stock
(the “Preferred Shares”) of the Company having the rights, powers and preferences set forth in the
form of Certificate of Designation attached hereto as Exhibit A, upon the terms and subject to the
conditions set forth in the Rights Agreement, dated as of October 12, 1998 (the “Original Rights
Agreement”), between the Company and the Rights Agent;
WHEREAS, the Board of Directors of the Company has authorized and directed the issuance of one
Right (subject to adjustment as provided herein) with respect to each Common Share that shall
become outstanding between the Record Date and the earliest of the Distribution Date and the
Expiration Date (as such terms are defined in Sections 3.1 and 7.1); provided, however, that Rights
may be issued with respect to Common Shares that shall become outstanding after the Distribution
Date and prior to the Expiration Date in accordance with Section 22;
WHEREAS, as of the date hereof, the Rights are redeemable under the Original Rights Agreement,
and the Company and the Rights Agent desire to amend and restate the terms of the Original Rights
Agreement as set forth herein;
WHEREAS, this Agreement supersedes in its entirety the Original Rights Agreement, effective as
of 4:00 p.m. New York time, on October 14, 2008.
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth,
the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the
meanings indicated:
1.1 “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or
which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 20% or more of the
Common Shares of the Company then outstanding but shall not include (i) an Exempt Person (as such
term is hereinafter defined) or (ii) if, as of the date hereof, any Person is the Beneficial Owner
of 20% or more of the Common Shares outstanding (an “Existing Holder”), such Existing Holder shall
not be or become an “Acquiring Person” unless and until
such time as such Existing Holder shall become the Beneficial Owner of one or more additional
Common Shares of the Company (other than pursuant to a dividend or distribution paid or made by the
Company on the outstanding Common Shares in Common Shares or pursuant to a split or subdivision of
the outstanding Common Shares), unless, upon becoming the Beneficial Owner of such additional
Common Shares, such Existing Holder is not then the Beneficial Owner of 20% or more of the Common
Shares then outstanding. Notwithstanding the foregoing, no Person shall become an “Acquiring
Person” as the result of an acquisition of Common Shares by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares beneficially owned by
such Person to 20% or more of the Common Shares of the Company then outstanding; provided, however,
that if a Person shall become the Beneficial Owner of 20% or more of the Common Shares of the
Company then outstanding solely by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of one or more additional Common Shares
of the Company (other than pursuant to a dividend or distribution paid or made by the Company on
the outstanding Common Shares in Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), then such Person shall be deemed to be an “Acquiring Person” unless
upon becoming the Beneficial Owner of such additional Common Shares such Person does not
beneficially own 20% or more of the shares of Common Shares then outstanding. Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith that a Person who
would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this
Section 1.1, has become such inadvertently (including, without limitation, because (A) such Person
was unaware that it beneficially owned a percentage of outstanding Common Shares that would
otherwise cause such Person to be an “Acquiring Person” or (B) such Person was aware of the extent
of its Beneficial Ownership of Common Shares but had no actual knowledge of the consequences of
such Beneficial Ownership under this Agreement), and without any intention of changing or
influencing control of the Company, and such Person divests as promptly as practicable (as
determined in good faith by the Board of Directors) a sufficient number of Common Shares so that
such Person would no longer be an Acquiring Person, as defined pursuant to the foregoing provisions
of this Section 1.1, or the Board of Directors in its sole discretion approves such beneficial
ownership interest, then such Person shall not be deemed to be or have become an “Acquiring Person”
for purposes of this Agreement. For all purposes of this 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”),
as in effect on the date of this Agreement.
1.2 “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, as in effect on the date
of this Agreement.
1.3 A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially
own” any securities:
(i) which such Person or any of such Person’s Affiliates or Associates beneficially
owns, directly or indirectly (as determined pursuant to Rule 13d-3 of the
2
General Rules and Regulations under the Exchange Act as in effect on the date of this
Agreement);
(ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has (A) the right to acquire (whether such right is exercisable immediately, or
only after the passage of time, compliance with regulatory requirements, fulfillment of a
condition or otherwise) pursuant to any agreement, arrangement or understanding, whether or
not in writing, or upon the exercise of conversion rights, exchange rights, rights, warrants
or options, or otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, (x) 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, (y)
securities which such Person has a right to acquire upon the exercise of Rights at any time
prior to the time that any Person becomes an Acquiring Person, or (z) securities which such
Person or any of such Person’s Affiliates or Associates may acquire, does or do acquire or
may be deemed to acquire or may be deemed to have the right to acquire, pursuant to any
merger or other acquisition agreement between the Company and such Person (or one or more of
such Person’s Affiliates or Associates) if prior to such Person becoming an Acquiring Person
the Board of Directors of the Company has approved such agreement and determined that such
Person shall not be or be deemed to be the beneficial owner of such securities within the
meaning of this Section 1.3; or (B) the right to vote pursuant to any agreement, arrangement
or understanding (whether or not in writing); provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security under this clause (B)
if the agreement, arrangement or understanding to vote such security (1) arises solely from
a revocable proxy or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and regulations
of the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) and with respect to which such Person or any of such
Person’s Affiliates or Associates has any agreement, arrangement or understanding, whether
or not in writing, for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy or consent as described in the proviso to Section 1.3(ii)(B)) or disposing
of any securities of the Company;
provided, however, that (x) nothing in this Section 1.3 shall cause a Person engaged in business as
an underwriter of securities to be the “Beneficial Owner” of, to have “Beneficial Ownership” of or
to “beneficially own” (as defined in this Section 1.3) any securities acquired through such
person’s participation in good faith in a firm commitment underwriting under the Securities Act of
1933, as amended, until the expiration of forty days after the date of such acquisition, and (y) no
Person who is an officer, director or employee of an Exempt Person shall be deemed, solely by
reason of such Person’s status or authority as such, or solely by reason of any agreement,
arrangement or understanding, written or otherwise, entered into in opposition to any transaction
or in support of a Qualified Offer, to be the “Beneficial Owner” of, to have
3
“Beneficial Ownership” of or to “beneficially own” any securities that are “beneficially owned” (as
defined in this Section 1.3), including, without limitation, in a fiduciary capacity, by an Exempt
Person or by any other such officer, director or employee of an Exempt Person. Any Person who,
directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or
any other contract, arrangement, or device (including without limitation any derivative, swap or
similar transaction or instrument) with the purpose of effect of divesting such Person of
beneficial ownership of a security or preventing the vesting of such beneficial ownership to avoid
the status of an Acquiring Person or as part of a plan or scheme to evade the reporting
requirements of section 13(d) or (g) of the Exchange Act shall be deemed to be the “Beneficial
Owner” of such security.
1.4 “Book-Entry” shall mean an uncertificated book-entry for Common Shares.
1.5 “Business Day” shall mean any day other than a Saturday, Sunday, or a day on which banking
institutions in the State of New York or State of Kansas are authorized or obligated by law or
executive order to close.
1.6 “Close of business” on any given date shall mean 5:00 p.m., New York time, on such date;
provided, however, that if such date is not a Business Day it shall mean 5:00 p.m., New York time,
on the next succeeding Business Day.
1.7 “Common Shares” when used with reference to the Company shall mean the shares of common
stock, par value $.01 per share, of the Company. “Common Shares” when used with reference to any
Person other than the Company shall mean the capital stock with the greatest voting power, or the
equity securities or other equity interest having power to control or direct the management, of
such other Person or, if such Person is a Subsidiary (as such term is hereinafter defined) of
another Person, the Person or Persons which ultimately control such first-mentioned Person, and
which has issued and outstanding such capital stock, equity securities or equity interest.
1.8 “Definitive Acquisition Agreement” shall mean any agreement entered into by the Company
that is conditioned on the approval by the holders of not less than a majority of the outstanding
shares of voting stock of the Company at a meeting of stockholders with respect to (i) a merger,
consolidation, recapitalization, reorganization, share exchange, business combination or similar
transaction involving the Company or (ii) the acquisition in any manner, directly or indirectly, of
more than 50% of the consolidated total assets (including, without limitation, equity securities of
its subsidiaries) of the Company.
1.9 “Exempt Person” shall mean the Company, any Subsidiary of the Company, in each case
including, without limitation, its fiduciary capacity, or any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity or trustee holding shares of capital stock of the
Company for or pursuant to the terms of any such plan, or for the purpose of funding other employee
benefits for employees of the Company or any Subsidiary of the Company.
4
1.10 “Independent Directors” shall mean members of the Board of Directors of the Company who
are not officers, employees or Affiliates (or designees of Affiliates) of the Company.
1.11 “Person” shall mean any individual, partnership, joint venture, limited liability
company, firm, corporation, unincorporated association, trust or other entity, and shall include
any successor (by merger or otherwise) of such entity.
1.12 “Qualified Offer” shall mean an offer determined by a majority of the Independent
Directors to have each of the following characteristics:
(i) a fully-financed, all-cash tender offer, or an exchange offer offering shares of
common stock of the offeror, or a combination thereof, in each such case for all of the
outstanding Common Shares at the same per-share consideration;
(ii) an offer that has commenced within the meaning of Rule 14d-2(a) under the Exchange
Act;
(iii) an offer that, within twenty Business Days after the commencement date of the
offer (or within ten Business Days after any increase in the offer consideration), does not
result in a nationally recognized investment banking firm retained by the Board of Directors
of the Company rendering an opinion to the Board of Directors of the Company that the
consideration being offered to the stockholders of the Company is either unfair or
inadequate;
(iv) if the offer includes shares of common stock of the offeror, an offer pursuant to
which (A) the offeror shall permit representatives of the Company (including a
nationally-recognized investment banking firm retained by the Board of Directors of the
Company and legal counsel and an accounting firm designated by the Company) to have access
to such offeror’s books, records, management, accountants and other appropriate outside
advisors for the purposes of permitting such representatives to conduct a due diligence
review of the offeror in order to permit the Board of Directors of the Company to evaluate
the offer and make an informed decision and, if requested by the Board of Directors of the
Company, to permit such investment banking firm (relying as appropriate on the advice of
such legal counsel) to be able to render an opinion to the Board of Directors of the Company
with respect to whether the consideration being offered to the stockholders of the Company
is adequate and fair from a financial point of view and (B) within ten Business Days after
such representatives of the Company (including a nationally-recognized investment banking
firm retained by the Board of Directors of the Company and legal counsel and an accounting
firm designated by the Company) shall have notified the Company and the offeror that it had
completed such due diligence review to its satisfaction (or, following completion of such
due diligence review, within ten Business Days after any increase in the consideration being
offered), such investment banking firm does not render an opinion to the Board of Directors
of the Company that the consideration being offered to the stockholders of the Company is
either unfair or inadequate and such investment banking firm does not, after the expiration
of such ten Business Day period, render an opinion to the Board of Directors
5
of the Company that the consideration being offered to the stockholders of the Company
has become either unfair or inadequate based on a subsequent disclosure or discovery of a
development or developments that have had or are reasonably likely to have a material
adverse effect on the value of the common stock of the offeror;
(v) an offer that is subject to only the minimum tender condition described below in
Section 1.12(viii) and other customary terms and conditions, which conditions shall
not include any financing, funding or similar conditions or any requirements with respect to
the offeror or its agents being permitted any due diligence with respect to the books,
records, management, accountants or other outside advisors of the Company;
(vi) an offer pursuant to which the Company has received an irrevocable written
commitment of the offeror that the offer will remain open for at least 120 Business Days
and, if a Special Meeting is duly requested in accordance with Section 23.2, for at
least ten Business Days after the date of the Special Meeting or, if no Special Meeting is
held within ninety Business Days following receipt of the Special Meeting Notice in
accordance with Section 23.2, for at least ten Business Days following such ninety
Business Day period;
(vii) an offer pursuant to which the Company has received an irrevocable written
commitment of the offeror that, in addition to the minimum time periods specified above in
Section 1.12(vi), the offer, if it is otherwise to expire prior thereto, will be
extended for at least twenty Business Days after any increase in the consideration being
offered or after any bona fide alternative offer is commenced within the meaning of
Rule 14d-2(a) under the Exchange Act; provided, however, that such offer
need not remain open, as a result of Section 1.12(vi) and this
Section 1.12(vii), beyond (A) the time that any other offer satisfying the criteria
for a Qualified Offer is then required to be kept open under such Section 1.12(vi)
and this Section 1.12(vii) or (B) the expiration date, as such date may be extended
by public announcement (with prompt written notice to the Rights Agent) in compliance with
Rule 14e-1 under the Exchange Act, of any other tender offer for the Common Shares with
respect to which the Board of Directors of the Company has agreed to redeem the Rights
immediately prior to acceptance for payment of Common Shares thereunder (unless such other
offer is terminated prior to its expiration without any Common Shares having been purchased
thereunder) or (C) one Business Day after the stockholder vote with respect to approval of
any Definitive Acquisition Agreement has been officially determined and certified by the
inspectors of elections;
(viii) an offer that is conditioned on a minimum of at least two-thirds of the
outstanding Common Shares not held by the Person making such offer (and such Person’s
Affiliates and Associates) being tendered and not withdrawn as of the offer’s expiration
date, which condition shall not be waivable;
(ix) an offer pursuant to which the Company has received an irrevocable written
commitment of the offeror to consummate, as promptly as practicable upon successful
completion of the offer, a second step transaction whereby all Common Shares
6
not tendered into the offer will be acquired at the same consideration per share
actually paid pursuant to the offer, subject to stockholders’ statutory appraisal rights, if
any;
(x) an offer pursuant to which the Company and its stockholders have received an
irrevocable written commitment of the offeror that no amendments will be made to the offer
to reduce the consideration being offered or to otherwise change the terms of the offer in a
way that is adverse to a tendering stockholder;
(xi) an offer (other than an offer consisting solely of cash consideration) pursuant to
which the Company has received the written representation and certification of the offeror
and, in their individual capacities, the written representations and certifications of the
offeror’s Chief Executive Officer and Chief Financial Officer, that (A) all facts about the
offeror that would be material to making an investor’s decision to accept the offer have
been fully and accurately disclosed as of the date of the commencement of the offer within
the meaning of Rule 14d-2(a) under the Exchange Act, (B) all such new facts will be fully
and accurately disclosed on a prompt basis during the entire period during which the offer
remains open, and (C) all required Exchange Act reports will be filed by the offeror in a
timely manner during such period; and
(xii) if the offer includes non-cash consideration, (A) the non-cash portion of the
consideration offered must consist solely of common stock of a Person that is a
publicly-owned United States corporation, (B) such common stock must be freely tradable and
listed or admitted to trading on either the New York Stock Exchange or the National
Association of Securities Dealers, Inc. Automated Quotation System (“Nasdaq”), (C) no
stockholder approval of the issuer of such common stock is required to issue such common
stock, or, if such approval required, such approval has already been obtained, (D) no Person
(including such Person’s Affiliates and Associates) beneficially owns more than 15% of the
voting stock of the issuer of such common stock at the time of commencement of the offer or
at any time during the term of the offer, (E) no other class of voting stock of the issuer
of such common stock is outstanding and (F) the issuer of such common stock meets the
registrant eligibility requirements for use of Form S-3 for registering securities under the
Securities Act, including the filing of all required Exchange Act reports in a timely manner
during the twelve calendar months prior to the date of commencement of such offer.
For the purposes of this definition of “Qualified Offer,” “fully financed” shall mean that the
offeror has sufficient funds for the offer and related expenses which shall be evidenced by
(1) firm, unqualified, written commitments from responsible financial institutions having the
necessary financial capacity, accepted by the offeror, to provide funds for such offer subject only
to customary terms and conditions, (2) cash or cash equivalents then available to the offeror, set
apart and maintained solely for the purpose of funding the offer with an irrevocable written
commitment being provided by the offeror to the Board of Directors of the Company to maintain such
availability until the offer is consummated or withdrawn or (3) a combination of the foregoing;
which evidence has been provided to the Company prior to, or upon, commencement of the offer. If an
offer becomes a Qualified Offer in accordance with this definition, but subsequently ceases to be a
Qualified Offer as a result of the failure at a later date to continue to
7
satisfy any of the requirements of this definition, such offer shall cease to be a Qualified Offer
and the provisions of Section 23.2 shall no longer be applicable to such offer, provided
that the actual redemption of the Rights pursuant to Section 23.2 shall not have already
occurred.
1.13 “Shares Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, the filing of a report pursuant to
Section 13(d) of the Exchange Act or pursuant to a comparable successor statute) by the Company or
an Acquiring Person that an Acquiring Person has become such or that discloses information which
reveals the existence of an Acquiring Person or such earlier date as a majority of the Board of
Directors shall become aware of the existence of an Acquiring Person.
1.14 “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 interests is owned, of record or
beneficially, directly or indirectly, by such Person.
1.15 “Trigger Event” shall be deemed to have occurred upon any Person becoming an Acquiring
Person.
1.16 The following terms shall have the meanings defined for such terms in the Sections set
forth below:
Term | Section | |
Adjustment Shares |
11.1.2 | |
common stock equivalent |
11.1.3 | |
Committee |
31 | |
Company |
Recitals | |
current per share market price |
11.4 | |
Current Value |
11.1.3 | |
Distribution Date |
3.1 | |
equivalent preferred stock |
11.2 | |
Exchange Act |
1.1 | |
Exchange Consideration |
27 | |
Existing Holder |
1.1 | |
Expiration Date |
7.1 | |
Final Expiration Date |
7.1 | |
Nasdaq |
1.12 | |
Original Rights Agreement |
Recitals | |
Outside Meeting Date |
23.2 | |
Preferred Shares |
Recitals | |
Principal Party |
13.2 | |
Purchase Price |
4 | |
Record Date |
Recitals | |
Redemption Date |
7.1 | |
Redemption Price |
23.1 | |
Redemption Resolution |
23.2 | |
Right |
Recitals | |
Right Certificate |
3.1 |
8
Term | Section | |
Rights Agent |
Recitals | |
Security |
11.4 | |
Special Meeting |
23.2 | |
Special Meeting Notice |
23.2 | |
Special Meeting Period |
23.2 | |
Spread |
11.1.3 | |
Substitution Period |
11.1.3 | |
Summary of Rights |
3.2 | |
Trading Day |
11.4 |
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, 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 as it may deem necessary or desirable. In the event
the Company appoints one or more co-Rights Agents, the respective duties of the Rights Agent and
any co-Rights Agent shall be as the Company shall determine, provided, that the Rights
Agent will have no duty to supervise, and in no event shall be liable for, the acts or omissions of
any co-Rights Agent. Contemporaneously with the appointment of any co-Rights Agent the Company
shall notify the Rights Agent thereof.
Section 3. Issuance of Right Certificates.
3.1 Rights Evidenced by Share Certificates and Book-Entries. Until the earlier of (i) the
close of business on the tenth Business Day after the Shares Acquisition Date or (ii) the close of
business on the tenth Business Day after the date of the commencement of, or first public
announcement of the intent of any Person (other than an Exempt Person) to commence, a tender or
exchange offer the consummation of which would result in any Person becoming an Acquiring Person
(the earlier of (i) and (ii) being herein referred to as the “Distribution Date”), (x) the Rights
(unless earlier expired, redeemed or terminated) will be evidenced (subject to the provisions of
Section 3.2) by the certificates or Book-Entries for Common Shares registered in the names of the
holders thereof (which certificates or Book-Entries for Common Shares shall also be deemed to be
Right Certificates) and not by separate certificates, and (y) the Rights (and the right to receive
certificates therefor) will be transferable only in connection with the transfer of the underlying
Common Shares. The preceding sentence notwithstanding, prior to the occurrence of a Distribution
Date specified as a result of an event described in clause (ii) (or such later Distribution Date as
the Board of Directors of the Company may select pursuant to this sentence), the Board of Directors
may postpone, one or more times, the Distribution Date which would occur as a result of an event
described in clause (ii) beyond the date set forth in such clause (ii). Nothing herein shall permit
such a postponement of a Distribution Date after a Person becomes an Acquiring Person, except as a
result of the operation of the third sentence of Section 1.1. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will countersign and the
Company (or, if requested, the Rights Agent) will send, by first-class, postage-prepaid mail, to
each record holder of Common Shares as of the close of business on the Distribution Date (other
than any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the address of
such holder shown on the records of the Company, one or more certificates for Rights, in
substantially the form of Exhibit B hereto (a
9
“Right Certificate”), evidencing one Right (subject to adjustment as provided herein) for
each Common Share so held. In the event that an adjustment in the number of Rights per Common Share
has been made pursuant to Section 11.15 hereof, at the time of distribution of the Right
Certificates, the Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14.1 hereof) so that Right Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
3.2 Summary of Rights. On the Record Date or as soon as practicable thereafter, the Company
sent a copy of a Summary of Rights to Purchase Preferred Shares, in substantially the form attached
hereto as Exhibit C (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. With respect to certificates for Common Shares
outstanding as of the close of business on the Record Date, until the Distribution Date (or the
earlier Expiration Date), the Rights will be evidenced by such certificates for Common Shares
registered in the names of the holders thereof together with a copy of the Summary of Rights and
the registered holders of the Common Shares shall also be registered holders of the associated
Rights. Until the Distribution Date (or the earlier Expiration Date), the transfer on the Company’s
direct registration system of any Common Shares represented by Book-Entries or the surrender for
transfer of any certificate for Common Shares outstanding at the close of business on the Record
Date, with or without a copy of the Summary of Rights, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby.
3.3 New Certificates and Book-Entries After Record Date. Subject to Section 11.1.2, Rights
shall be issued in respect of all Common Shares which are issued (whether originally issued or
transferred from the Company’s treasury to any other Person) after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date or, in certain circumstances provided in
Section 22 hereof, after the Distribution Date. Certificates for Common Shares and confirmations
evidencing Book-Entries which become outstanding (whether upon issuance out of authorized but
unissued Common Shares, disposition out of treasury or transfer or exchange of outstanding Common
Shares) after the Record Date but prior to the earliest of the Distribution Date or the Expiration
Date, shall have impressed, printed, stamped, written or otherwise affixed onto them a legend in
substantially the following form (with appropriate modifications in the case of confirmations):
This certificate also evidences and entitles the holder hereof to certain rights as
set forth in an Agreement between Xxxxx Xxxxxxxxxxx Company (the “Company”) and
National City Bank, as Rights Agent, dated as of October 12, 1998, as the same may
be amended from time to time (the “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 the Company. Under certain circumstances, as set forth in the
Agreement, such Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. The Company will mail to the holder of this
certificate a copy of the Agreement without charge after receipt of a written
request therefor. AS DESCRIBED IN THE AGREEMENT, RIGHTS WHICH ARE OWNED BY,
TRANSFERRED TO OR HAVE BEEN OWNED
10
BY ACQUIRING PERSONS OR ASSOCIATES OR AFFILIATES THEREOF (AS DEFINED IN THE
AGREEMENT) SHALL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Until the Distribution Date (or the earlier Expiration Date), the Rights associated with the Common
Shares represented by certificates and Book-Entries shall be evidenced by such certificates and
Book-Entries alone, and the transfer on the Company’s direct registration system of any Common
Shares represented by any such Book-Entries or the surrender for transfer of any such certificates,
except as otherwise provided herein, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby. In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no longer outstanding.
Notwithstanding this Section 3.3, the omission of a legend shall not affect the enforceability
of any part of this Agreement or the rights of any holder of the Rights.
Section 4. Form of Right Certificates. The Right Certificates (and the forms of election to
purchase shares, certification and assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this Agreement, or as may be required to comply with
any applicable law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or trading system on which the Rights may from time to time be
listed or quoted, or to conform to usage. Subject to the terms and conditions hereof, the Right
Certificates, whenever issued, on their face shall entitle the holders thereof to purchase such
number of one one-hundredths of a Preferred Share as shall be set forth therein at the price per
one one-hundredth of a Preferred Share set forth therein (the “Purchase Price”), but the number and
type of securities and the Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board of Directors, the Chief Executive Officer,
President or any Vice President, either manually or by facsimile signature, and shall have affixed
thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary or any
Assistant Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned, either manually or by facsimile signature, by an authorized
signatory of the Rights Agent, but it shall not be necessary for the same signatory to countersign
all of the Right Certificates hereunder. No Right Certificate shall be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased to be such officer of
the Company; and any Right Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such
11
Right Certificate, shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this 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 an office designated as the appropriate place for surrender of Right
Certificates upon exercise, exchange or transfer, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right
Certificates, the certificate number of each of the Right Certificates and the date of each of the
Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 7.5, Section
11.1.2 and Section 14, at any time after the close of business on the Distribution Date, and at or
prior to the close of business on the Expiration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have become void pursuant to Section 11.1.2
or that have been exchanged pursuant to Section 27) may be transferred, split up or combined or
exchanged for another Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred Share (or, following a Trigger Event,
Common Shares, other securities, cash or other assets) as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to
transfer, split up or combine or exchange any Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender, together with any required form of assignment
and certificate duly completed, the Right Certificate or Right Certificates to be transferred,
split up or combined or exchanged at the office of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate or Right Certificates until the
registered holder shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate or Right Certificates and shall have
provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the
Rights Agent shall countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require payment from the
holders of Right Certificates of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up or combination or exchange of such Right
Certificates.
Subject to the provisions of Section 11.1.2 , at any time after the Distribution Date and
prior to the Expiration Date, upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, 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 Right Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
7.1 Exercise of Rights. Subject to Section 11.1.2 and except as otherwise provided herein,
the registered holder of any Right Certificate may exercise the Rights evidenced thereby in whole
or in part at any time after the Distribution Date upon surrender of the Right Certificate, with
the form of election to purchase and certification on the reverse side thereof duly executed, to
the Rights Agent at the office of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price for the total number of one one-hundredths of a Preferred
Share (or other securities, cash or other assets) as to which the Rights are exercised, at or prior
to the time (the “Expiration Date”) that is the earliest of (i) the close of business on October
14, 2011 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided
in Section 23 (the “Redemption Date”), (iii) the closing of any merger or other acquisition
transaction involving the Company pursuant to an agreement of the type described in Section 13.3 at
which time the Rights are deemed terminated, or (iv) the time at which the Rights are exchanged as
provided in Section 27.
7.2 Purchase. The Purchase Price for each one one-hundredth of a Preferred Share pursuant to
the exercise of a Right shall be initially $75.00, shall be subject to adjustment from time to time
as provided in Sections 11, 13 and 26 and shall be payable in lawful money of the United States of
America in accordance with Section 7.3.
7.3 Payment Procedures. Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase and certification duly executed, accompanied by payment of
the aggregate Purchase Price for the total number of one one-hundredths of a Preferred Share to be
purchased and an amount equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9, in cash or by certified or cashier’s check or
money order payable to the order of the Company, the Rights Agent shall thereupon promptly
(i)(A) requisition from any transfer agent of the Preferred Shares (or make available, if the
Rights Agent is the transfer agent) certificates for the number of Preferred Shares to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests,
or (B) if the Company shall have elected to deposit the total number of Preferred Shares issuable
upon exercise of the Rights hereunder with a depository agent, requisition from the depositary
agent depositary receipts representing interests in such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the depositary agent)
and the Company hereby directs the depositary agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu of the issuance of
fractional shares in accordance with Section 14 or otherwise in accordance with Section 11.1.3,
(iii) promptly after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (iv) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered holder of such Right Certificate.
In the event that the Company is obligated to issue other securities of the Company, pay cash
and/or distribute other property pursuant to Section 11.1.3, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate.
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7.4 Partial Exercise. In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14.
7.5 Full Information Concerning Ownership. Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported exercise as set forth
in this Section 7 unless the certificate contained in the form of election to purchase set forth on
the reverse side of the Right Certificate surrendered for such exercise shall have been duly
completed and signed by the registered holder thereof and the Company shall have been provided with
such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent
shall deliver all canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. The Company covenants and agrees
that from and after the Distribution Date it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares (and, following the occurrence of a Trigger Event, out
of its authorized and unissued Common Shares or other securities or out of its shares held in its
treasury) the number of Preferred Shares (and, following the occurrence of a Trigger Event, Common
Shares and/or other securities) that will be sufficient to permit the exercise in full of all
outstanding Rights.
So long as the Preferred Shares (and, following the occurrence of a Trigger Event, Common
Shares and/or other securities) issuable upon the exercise of Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance to be listed or admitted to
trading on such exchange upon official notice of issuance upon such exercise.
The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all Preferred Shares (and, following the occurrence of a Trigger Event, Common Shares
and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
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From and after such time as the Rights become exercisable, the Company shall use its best
efforts, if then necessary to permit the issuance of Preferred Shares upon the exercise of Rights,
to register and qualify such Preferred Shares under the Securities Act and any applicable state
securities or “Blue Sky” laws (to the extent exemptions therefrom are not available), cause such
registration statement and qualifications to become effective as soon as possible after such filing
and keep such registration and qualifications effective until the earlier of the date as of which
the Rights are no longer exercisable for such securities and the Expiration Date. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the exercisability of the Rights
in order to prepare and file a registration statement under the Securities Act and permit it to
become effective. Upon any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction unless
the requisite qualification in such jurisdiction shall have been obtained and until a registration
statement under the Securities Act (if required) shall have been declared effective.
The Company further covenants and agrees that it will pay when due and payable any and all
Federal and state transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer or delivery of
Right Certificates to a person other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Shares (or Common Shares and/or other securities, as the case
may be) in a name other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates or depositary receipts for
Preferred Shares (or Common Shares and/or other securities, as the case may be) in a name other
than that of the registered holder upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company’s satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose name any certificate for
Preferred Shares (or fractions thereof or Common Shares and/or other securities, as the case may
be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Shares (or fractions thereof or Common Shares and/or other
securities, as the case may be) represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Shares (or Common Shares
and/or other securities, as the case may be) transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding Business Day on which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not
be entitled to any rights of a holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote or to receive
15
dividends or other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The Purchase
Price, the number of Preferred Shares or other securities or property purchasable upon exercise of
each Right and the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
11.1 Post-Execution Events.
11.1.1 Corporate Dividends, Reclassifications, Etc. In the event the Company shall at any
time after the date of this Agreement (A) declare and pay a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of
its capital stock in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this Section 11.1, the
Purchase Price in effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall 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 Preferred 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,
combination or reclassification; provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. If an event occurs which would require an
adjustment under both Section 11.1.1 and Section 11.1.2, the adjustment provided for in this
Section 11.1.1 shall be in addition to, and shall be made prior to, the adjustment required
pursuant to, Section 11.1.2.
11.1.2 Acquiring Person Events; Triggering Events. Subject to Sections 23.1 and 27, in the
event that a Trigger Event occurs, then, from and after the first occurrence of such event, each
holder of a Right, except as provided below, shall thereafter have a right to receive, upon
exercise thereof at a price per Right equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a Right is then exercisable (without
giving effect to this Section 11.1.2), in accordance with the terms of this Agreement and in lieu
of Preferred Shares, such number of Common Shares as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one one-hundredths of a Preferred
Share for which a Right was exercisable (or, if the Distribution Date shall not have occurred prior
to the date of such Trigger Event, the number of one one-hundredths of a Preferred Share for which
a Right would have been exercisable if the Distribution Date had occurred on the Business Day
immediately preceding the date of such Trigger Event) immediately prior to the first occurrence of
a Trigger Event and (y) dividing that product (which, following such first occurrence, shall
thereafter be referred to as the “Purchase Price” for each Right and for all purposes of this
Agreement except to the extent set forth in Section 13) by 50% of the current per share market
price of the Common Shares (determined pursuant to Section
16
11.4) on the date of the first occurrence of a Trigger Event (the “Adjustment Shares”);
provided that the Purchase Price and the number of Adjustment Shares shall thereafter be subject to
further adjustment as appropriate in accordance with Section 11.6. Notwithstanding the foregoing,
upon the occurrence of a Trigger Event, any Rights that are or were acquired or beneficially owned
by (1) any Acquiring Person or any Associate or Affiliate thereof, (2) a transferee of any
Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (3) a transferee of any Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement or understanding which has as a primary
purpose or effect avoidance of this Section 11.1.2, and subsequent transferees, shall become void
without any further action, and any holder (whether or not such holder is an Acquiring Person or an
Associate or Affiliate of an Acquiring Person) of such Rights shall thereafter have no rights with
respect to such Rights under any provision of this Agreement or otherwise. The Company shall not
enter into any transaction of the type described in this Section 11.1.2 if at the time of such
transaction there are any rights, warrants, instruments or securities outstanding or any
arrangements which, as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights. From and after the
Trigger Event, no Right Certificate shall be issued pursuant to Section 3 or Section 6 that
represents Rights that are or have become void pursuant to the provisions of this paragraph, and
any Right Certificate delivered to the Rights Agent that represents Rights that are or have become
void pursuant to the provisions of this paragraph shall be canceled. The Company may require (or
cause the Rights Agent or any transfer agent of the Company to require) any Person who submits a
Right Certificate (or evidence of ownership of Common Shares that evidences, or but for the
provisions of this Section 11.1.2 would evidence, Rights) for transfer on the registry books or to
exercise the Rights represented thereby to establish to the satisfaction of the Company in its sole
discretion that such Rights have not become null and void pursuant to the provisions of this
Section 11.1.2.
The Company shall use all reasonable efforts to ensure that the provisions of this Section
11.1.2 are complied with, but shall have no liability to any holder of Right Certificates or other
Person as a result of its failure to make any determinations with respect to any Acquiring Person
or its Affiliates, Associates or transferees hereunder.
From and after the occurrence of an event specified in Section 13.1, any Rights that
theretofore have not been exercised pursuant to this Section 11.1.2 shall thereafter be exercisable
only in accordance with Section 13 and not pursuant to this Section 11.1.2.
11.1.3 Insufficient Shares. The Company may at its option substitute for a Common Share
issuable upon the exercise of Rights in accordance with the foregoing Section 11.1.2 a number of
Preferred Shares or fraction thereof such that the current per share market price of one Preferred
Share multiplied by such number or fraction is equal to the current per share market price of one
Common Share. In the event that upon the occurrence of one or more of the events listed in Section
11.1.2 above there shall not be sufficient Common Shares
17
authorized but unissued, or held by the Company as treasury shares, to permit the exercise in
full of the Rights in accordance with the foregoing Section 11.1.2, the Company shall take all such
action as may be necessary to authorize additional Common Shares for issuance upon exercise of the
Rights, provided, however, that if the Company determines that it is unable to cause the
authorization of a sufficient number of additional Common Shares, then, in the event the Rights
become exercisable, the Company, with respect to each Right and 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: (A) determine the excess of (1) the value of the Adjustment Shares issuable
upon the exercise of a Right (the “Current Value”), over (2) the Purchase Price (such excess, the
“Spread”) and (B) with respect to each Right (other than Rights which have become void pursuant to
Section 11.1.2), make adequate provision to substitute for the Adjustment Shares, upon payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Preferred
Shares or other equity securities of the Company (including, without limitation, shares, or
fractions of shares, of preferred stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the Common Shares, the Board of Directors of the
Company has deemed in good faith to have substantially the same value as Common Shares) (each such
share of preferred stock or fractions of shares of preferred stock constituting a “common stock
equivalent”)), (4) debt securities of the Company, (5) other assets or (6) any combination of the
foregoing having an aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected in good faith by the Board of Directors of the Company;
provided, however, that if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the first occurrence of one of the
events listed in Section 11.1.2 above, then the Company shall be obligated to deliver upon the
surrender for exercise of a Right and without requiring payment of the Purchase Price (other than
an amount equal to the par value of the shares to be issued to the extent required by applicable
law), Common Shares (to the extent available) and then, if necessary, such number or fractions of
Preferred Shares (to the extent available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth
above may be extended and re-extended to the extent necessary, but not more than ninety (90) days
following the first occurrence of one of the events listed in Section 11.1.2 above, in order that
the Company may seek stockholder approval for the authorization of such additional shares (such
period as may be extended, the “Substitution Period”). To the extent that the Company determines
that some action need be taken pursuant to the second and/or third sentences of this Section
11.1.3, the Company (x) shall provide that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such second sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended as well as a public
announcement at such time as the suspension is no longer in effect. For purposes of this Section
11.1.3, the value of a Common Share shall be the current per share market price (as determined
pursuant to Section 11.4) on the
18
date of the occurrence of a Trigger Event and the value of any “common stock equivalent” shall
be deemed to have the same value as the Common Shares on such date.
11.2 Dilutive Rights Offering. In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred
Shares (or securities having the same rights, privileges and preferences as the Preferred Shares
(“equivalent preferred stock”)) or securities convertible into Preferred Shares or equivalent
preferred stock at a price per Preferred Share or per share of equivalent preferred stock (or
having a conversion or exercise price per share, if a security convertible into or exercisable for
Preferred Shares or equivalent preferred stock) less than the current per share market price of the
Preferred Shares (as determined pursuant to Section 11.4) 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 Preferred Shares and shares of equivalent preferred stock outstanding on such record date
plus the number of Preferred Shares and shares of equivalent preferred stock which the aggregate
offering price of the total number of Preferred Shares and/or shares of equivalent preferred stock
to be offered (and/or the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current per share market price and the denominator of which shall
be the number of Preferred Shares and shares of equivalent preferred stock outstanding on such
record date plus the number of additional Preferred Shares and/or shares of equivalent preferred
stock 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 of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. 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, whose determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Preferred Shares and shares of
equivalent preferred stock owned by or held for the account of the Company or any Subsidiary of the
Company shall not be deemed outstanding for the purpose of any such computation. Such adjustments
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.
11.3 Distributions. In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness, cash, securities or assets (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the last regular periodic
cash dividend theretofore paid or, in case regular periodic cash dividends have not theretofore
been paid, at a rate not in excess of 50% of the average net income per share of the Company for
the four quarters ended immediately prior to the payment of such dividend, or a dividend payable in
Preferred Shares (which dividend, for purposes of this Agreement, shall be subject to the
provisions of Section 11.1.1(A))) or convertible securities, or subscription rights or warrants
(excluding those referred to in Section 11.2), the Purchase Price to be in effect after such record
19
date shall be determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current per share market price of
the Preferred Shares (as determined pursuant to Section 11.4) on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of the portion of the
cash, assets, securities or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares (as determined pursuant to Section 11.4);
provided, however, that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the Company to be
issued upon exercise of one Right. 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.
11.4 Current Per Share Market Value.
11.4.1 General. For the purpose of any computation hereunder, the “current per share market
price” of any security other than Preferred Shares (a “Security” for the purpose of this Section
11.4.1) on any date shall be deemed to be the average of the daily closing prices per share of such
Security for the ten (10) consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event that the current per share
market price of the Security is determined during any period following the announcement by the
issuer of such Security of (i) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of ten (10) 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 equivalent of such
Security. The closing price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the Security is 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 Security is listed or admitted to trading or, if the
Security is 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 Security is not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Security selected by the
Board of Directors of the Company. If on any such date no such market maker is making a market in
the Security, the fair value of the Security on such date as determined in good faith by the Board
of Directors of the Company shall be used. The term “Trading Day” shall mean a day on which the
principal national securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or admitted to trading on
any national securities exchange, a Business Day. If the Security is not publicly held
20
or not so listed or traded, or if on any such date the Security is not so quoted and no such
market maker is making a market in the Security, “current per share market price” shall mean the
fair value per share as determined in good faith by the Board of Directors of the Company.
11.4.2 Preferred Shares. Notwithstanding Section 11.4.1, for the purpose of any computation
hereunder, the “current per share market price” of the Preferred Shares shall be determined in the
same manner as set forth above in Section 11.4.1 (other than the last sentence thereof). If the
current per share market price of the Preferred Shares cannot be determined in the manner described
in Section 11.4.1, the “current per share market price” of the Preferred Shares shall be
conclusively deemed to be an amount equal to 100 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and recapitalizations with respect to the Common
Shares occurring after the date of this Agreement) multiplied by the current per share market price
of the Common Shares (as determined pursuant to Section 11.4.1). If neither the Common Shares nor
the Preferred Shares are publicly held or so listed or traded, or if on any such date neither the
Common Shares nor the Preferred Shares are so quoted and no such market maker is making a market in
either the Common Shares or the Preferred Shares, “current per share market price” of the Preferred
Shares shall mean the fair value per share as determined in good faith by the Board of Directors of
the Company. For purposes of this Agreement, the “current per share market price” of one
one-hundredth of a Preferred Share shall be equal to the “current per share market price” of one
Preferred Share divided by 100.
11.5 Insignificant Changes. Anything to the contrary herein notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Purchase Price. Any adjustments which by reason of this Section 11.5 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-hundred thousandth of a Preferred Share or the nearest one-hundredth of a Common Share or other
share or security, as the case may be.
11.6 Shares Other Than Preferred Shares. If as a result of an adjustment made pursuant to
Section 11.1, the holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Preferred Shares, thereafter the number of such
other shares so receivable upon exercise of any Right and the Purchase Price 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 Preferred Shares contained in Sections 11.1, 11.2, 11.3, 11.5, 11.8,
11.9 and 11.13, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Shares shall apply on like terms to any such other shares.
11.7 Rights Issued Prior to Adjustment. All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
11.8 Effect of Adjustments. Unless the Company shall have exercised its election as provided
in Section 11.9, upon each adjustment of the Purchase Price as a result of the calculations made in
Sections 11.2 and 11.3, each Right outstanding immediately prior to the
21
making of such adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a Preferred Share (calculated to the nearest
one-hundred thousandth of a Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a Preferred Share covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
11.9 Adjustment in Number of Rights. 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 one one-hundredths of a Preferred Share issuable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest one-hundredth)
obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least ten (10) days later
than the date of the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11.9, the Company may, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the Right Certificates
held by such holders prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
11.10 Right Certificates Unchanged. Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a Preferred Share issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of one one-hundredths of a Preferred Share which were
expressed in the initial Right Certificates issued hereunder.
11.11 Par Value Limitations. Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the Preferred Shares
or other shares of capital stock 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 Preferred Shares or other such shares at
such adjusted Purchase Price.
22
11.12 Deferred Issuance. In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to the holder of any
Right exercised after such record date of that number of one one-hundredths of a Preferred Share
and shares of other capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of one one-hundredths of a Preferred Share and shares of other capital
stock or other securities, assets or cash of the Company, if any, issuable upon such exercise on
the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due xxxx or other appropriate instrument evidencing such
holder’s right to receive such additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
11.13 Reduction in Purchase Price. 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 any consolidation or
subdivision of the Preferred Shares, issuance wholly for cash of any of the Preferred Shares at
less than the current market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to holders of its Preferred Shares
shall not be taxable to such stockholders.
11.14 Company Not to Diminish Benefits of Rights. The Company covenants and agrees that after
the earlier of the Shares Acquisition Date or Distribution Date it will not, except as permitted by
Section 23, Section 26 or Section 27, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights.
11.15 Adjustment of Rights Associated with Common Shares. Notwithstanding anything contained
in this Agreement to the contrary, in the event that the Company shall at any time after the date
hereof and prior to the Distribution Date (i) declare or pay any dividend on the outstanding Common
Shares payable in Common Shares, (ii) effect a subdivision or consolidation of the outstanding
Common Shares (by reclassification or otherwise than by the payment of dividends payable in Common
Shares), or (iii) combine the outstanding Common Shares into a greater or lesser number of Common
Shares, then in any such case, the number of Rights associated with each Common Share then
outstanding, or issued or delivered thereafter but prior to the Distribution Date or in accordance
with Section 22 shall be proportionately adjusted so that the number of Rights thereafter
associated with each Common Share following any such event shall equal the result obtained by
multiplying the number of Rights associated with each Common Share immediately prior to such event
by a fraction, the numerator of which shall be the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of which shall be the total
number of Common Shares outstanding immediately following the occurrence of such event. The
adjustments provided for in this Section 11.15 shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or consolidation is effected.
23
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Sections 11 or 13, the Company shall (a) promptly prepare a
certificate setting forth such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail or make available a brief
summary thereof to each holder of a Right Certificate (or, if prior to the Distribution Date, to
each registered holder of Common Shares) in accordance with Section 25. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any such adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
13.1 Certain Transactions. In the event that, from and after the first occurrence of a
Trigger Event, directly or indirectly, (A) the Company shall consolidate with, or merge with and
into, any other Person and the Company shall not be the continuing or surviving corporation, (B)
any Person shall consolidate with the Company, or merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for stock or other
securities of the Company or any other Person or cash or any other property, or (C) the Company
shall sell, exchange, mortgage or otherwise transfer (or one or more of its Subsidiaries shall
sell, exchange, mortgage or otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company or one or more
wholly-owned Subsidiaries of the Company in one or more transactions each of which complies with
Section 11.14), then, and in each such case, proper provision shall be made so that (i) each holder
of a Right (other than Rights which have become void pursuant to Section 11.1.2) shall thereafter
have the right to receive, upon the exercise thereof at a price per Right equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the first occurrence of a Trigger Event (as subsequently
adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12), in accordance with the
terms of this Agreement and in lieu of Preferred Shares or Common Shares, such number of validly
authorized and issued, fully paid, non-assessable and freely tradable Common Shares of the
Principal Party (as such term is hereinafter defined) not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to the first occurrence of a Trigger
Event (as subsequently adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12) and
(y) dividing that product (which, following such first occurrence, shall thereafter be referred to
as the “Purchase Price” for each Right and for all purposes of this Agreement) by 50% of the then
current per share market price of the Common Shares of such Principal Party (determined pursuant to
Section 11.4) on the date of consummation of such consolidation, merger, sale or transfer;
provided, that the price per Right so payable and the number of Common Shares of such Principal
Party so receivable upon exercise of a Right shall thereafter be subject to further adjustment as
appropriate in accordance with Section 11.6 to reflect any events covered thereby occurring in
respect of the Common Shares of such Principal Party after the occurrence of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall
24
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 Agreement; (iii) the term
“Company” shall thereafter be deemed to refer to such Principal Party; 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) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon the exercise of the
Rights; provided that, upon the subsequent occurrence of any consolidation, merger, sale or
transfer of assets or other extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of
the Purchase Price as provided in this Section 13.1, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had such holder, at the time of such
transaction, owned the Common Shares of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13.1, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit the subsequent exercise
of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other
property. The Company shall not consummate any such consolidation, merger, sale or transfer unless
the Principal Party shall have sufficient number of authorized shares of capital stock that have
not been issued or reserved for issuance to permit the exercise in full of all outstanding Rights
under this Section 13 and unless the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that the requirements of this
Section 13.1 and Section 13.2 shall promptly be performed in accordance with their terms and that
such consolidation, merger, sale or transfer of assets shall not result in a default by the
Principal Party under this Agreement as the same shall have been assumed by the Principal Party
pursuant to this Section 13.1 and Section 13.2 and providing that, as soon as practicable after
executing such agreement pursuant to this Section 13, the Principal Party, at its own expense,
shall
(1) prepare and file a registration statement under the Securities Act, if necessary,
with respect to the Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date and similarly comply with
applicable state securities laws;
(2) use its best efforts, if the Common Shares of the Principal Party shall be
listed or admitted to trading on the New York Stock Exchange or on another national
securities exchange, to list or admit to trading (or continue the listing of) the Rights and
the securities purchasable upon exercise of the Rights on the New York Stock Exchange or
such securities exchange, or, if the Common Shares of the Principal Party shall not be
listed or admitted to trading on the New York Stock Exchange or a national securities
exchange, to cause the Rights and the securities receivable upon exercise of the Rights to
be authorized for quotation on Nasdaq or on such other system then in use;
25
(3) 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 (or any
successor form) under the Exchange Act; and
(4) obtain waivers of any rights of first refusal or preemptive rights in respect of
the Common Shares of the Principal Party subject to purchase upon exercise of outstanding
Rights.
In case the Principal Party has provision in any of its authorized securities or in its
certificate of incorporation or by-laws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party to issue (other than to holders
of Rights pursuant to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, Common Shares or common stock
equivalents of such Principal Party at less than the then current market price per share thereof
(determined pursuant to Section 11.4) or securities exercisable for, or convertible into, Common
Shares or common stock equivalents of such Principal Party at less than such then current market
price (other than to holders of Rights pursuant to this Section 13), or (ii) providing for any
special payment, taxes or similar provision in connection with the issuance of the Common Shares of
such Principal Party pursuant to the provision of Section 13, then, in such event, the Company
hereby agrees with each holder of Rights that it shall not consummate any such transaction unless
prior thereto the Company and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in question of such Principal Party
shall have been canceled, waived or amended, or that the authorized securities shall be redeemed,
so that the applicable provision will have no effect in connection with, or as a consequence of,
the consummation of the proposed transaction.
The Company covenants and agrees that it shall not, at any time after the Trigger Event, enter
into any transaction of the type described in clauses (A) through (C) of this Section 13.1 if (i)
at the time of or immediately after such consolidation, merger, sale, transfer or other transaction
there are any rights, warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (ii) prior to, simultaneously with or immediately after such consolidation,
merger, sale, transfer or other transaction, the stockholders of the Person who constitutes, or
would constitute, the Principal Party for purposes of Section 13.2 shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates or Associates or
(iii) the form or nature of organization of the Principal Party would preclude or limit the
exercisability of the Rights. The provisions of this Section 13 shall similarly apply to successive
transactions of the type described in clauses (A) through (C) of this Section 13.1.
13.2 Principal Party. “Principal Party” shall mean:
(i) in the case of any transaction described in (A) or (B) of the first sentence of
Section 13.1: (i) the Person that is the issuer of the securities into which the Common
Shares are converted in such merger or consolidation, or, if there is more than one such
issuer, the issuer the Common Shares of which have the greatest aggregate market value of shares outstanding, or (ii) if no securities are so issued, (x) the Person that is the other
party to the merger, if such Person survives said merger, or, if there is more than one such
26
Person, the Person the Common Shares of which have the greatest aggregate market value
of shares outstanding or (y) if the Person that is the other party to the merger does not
survive the merger, the Person that does survive the merger (including the Company if it
survives) or (z) the Person resulting from the consolidation; and (ii) in the case of any
transaction described in (C) of the first sentence in Section 13.1, the Person that is the
party receiving the greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions, or, if each Person that is a party to such transaction or
transactions receives the same portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or earning power cannot be
determined, whichever of such Persons is the issuer of Common Shares having the greatest
aggregate market value of shares outstanding; provided, however, that in any such case
described in the foregoing clause (A) or (B) of this Section 13.2, if the Common Shares of
such Person are not at such time or have not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, then (1) if such Person is a direct
or indirect Subsidiary of another Person the Common Shares of which are and have been so
registered, the term “Principal Party” shall refer to such other Person, or (2) if such
Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Shares
of all of which are and have been so registered, the term “Principal Party” shall refer to
whichever of such Persons is the issuer of Common Shares having the greatest aggregate
market value of shares outstanding, or (3) if 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 clauses (1) and (2) above shall apply to each of
the owners having an interest in the venture as if the Person owned by the joint venture was
a Subsidiary of both or all of such joint venturers, and the Principal Party in each such
case shall bear the obligations set forth in this Section 13 in the same ratio as its
interest in such Person bears to the total of such interests.
13.3 Approved Acquisitions. Notwithstanding anything contained herein to the contrary, upon
the consummation of any merger or other acquisition transaction of the type described in clause
(A), (B) or (C) of Section 13.1 involving the Company pursuant to a merger or other acquisition
agreement between the Company and any Person (or one or more of such Person’s Affiliates or
Associates) which agreement has been approved by the Board of Directors of the Company prior to any
Person becoming an Acquiring Person, this Agreement and the rights of holders of Rights hereunder
shall be terminated in accordance with Section 7.1.
Section 14. Fractional Rights and Fractional Shares.
14.1 Cash in Lieu of Fractional Rights. The Company shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence fractional Rights (except prior to the
Distribution Date in accordance with Section 11.15). In lieu of such fractional Rights, there shall
be paid to the registered holders of the Right Certificates with regard to which such fractional
Rights would otherwise be issuable an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14.1, the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
27
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 the
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 the 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 current market value of the Rights on such date shall be the fair value of the
Rights as determined in good faith by the Board of Directors of the Company.
14.2 Cash in Lieu of Fractional Preferred Shares. The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise or exchange of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share). Interests in fractions of Preferred Shares in
integral multiples of one one-hundredth of a Preferred Share may, at the election of the Company,
be evidenced by depositary 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 all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In
lieu of fractional Preferred Shares that are not integral multiples of one one-hundredth of a
Preferred Share, the Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised or exchanged as herein provided an amount in cash equal to the same
fraction of the current per share market price of one Preferred Share (as determined in accordance
with Section 11.4.2) for the Trading Day immediately prior to the date of such exercise or
exchange.
14.3 Cash in Lieu of Fractional Common Shares. The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which evidence fractional Common Shares
upon the exercise or exchange of Rights. In lieu of such fractional Common Shares, the Company
shall pay to the registered holders of the Right Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share (as determined in accordance with Section 11.4.1) for
the Trading Day immediately prior to the date of such exercise or exchange.
14.4 Waiver of Right to Receive Fractional Rights or Shares. The holder of a Right by the
acceptance of the Rights expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise or exchange of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this Agreement, except the
rights of action given to the Rights Agent hereunder, are vested in the respective registered
28
holders of the Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right 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 Right Certificate (or, prior to the Distribution Date, of the Common Shares), may, in
his own behalf and for his own benefit, enforce this Agreement, and may institute and maintain any
suit, action or proceeding against the Company to enforce this Agreement, or otherwise enforce or
act in respect of his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically acknowledged that the holders
of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be
entitled to specific performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person (including, without limitation, the
Company) subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by accepting the same
consents and agrees with the Company and the Rights Agent and with every other holder of a Right
that:
(a) prior to the Distribution Date, the Rights will be transferable only in connection
with the transfer of the Common Shares;
(b) as of and after the Distribution Date, the Right Certificates are transferable only
on the registry books of the Rights Agent if surrendered at the office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer
with all required certifications completed;
(c) the Company and the Rights Agent may deem and treat the Person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate or Book-Entry) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Right
Certificates or the associated Common Shares certificate or Book-Entry 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) notwithstanding anything in this Agreement to the contrary, neither the Company nor
the Rights Agent shall have any liability to any holder of a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use all reasonable efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as possible.
29
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right
Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the number of one one-hundredths of a Preferred Share 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 Right Certificate be construed to
confer upon the holder of any Right 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 24), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right 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 in accordance with a fee schedule
to be mutually agreed upon and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, cost or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent (which gross negligence, bad faith or
willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling
of a court of competent jurisdiction), for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement and the performance of its
duties and responsibilities and the exercise of its rights hereunder, including the costs and
expenses of defending against any claim of liability arising therefrom, directly or indirectly.
The costs and expenses of enforcing this right of indemnification will also be paid by the Company
to the extent it is finally determined that the Rights Agent is entitled to be indemnified by the
Company.
The Rights Agent may conclusively rely on, and shall be protected and shall incur no liability
for or in respect of, any action taken, suffered or omitted by it in connection with its
administration of this Agreement and the performance of its duties and responsibilities and the
exercise of its rights hereunder in reliance upon any Right Certificate or certificate for the
Preferred Shares or the Common Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction,
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 or opinion of counsel as set forth in Section 20.
Notwithstanding anything in this Agreement to the contrary, in no event will the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind whatsoever (including
but not limited to lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage and regardless of the form of action.
30
The provisions of this Section 18 shall survive the exercise, exchange, redemption or
expiration of the Rights, the termination of this Agreement and the resignation, replacement or
removal of the Rights Agent.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any Person into which
the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated,
or any Person resulting from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any Person succeeding to the corporate trust or stock transfer
business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation or limited liability company
would be eligible for appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at such time any of the
Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes to perform only the duties
and obligations expressly imposed by this Agreement (and no implied duties or obligations shall be
read into this Agreement against the Rights Agent) only upon the following terms and conditions, by
all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall
be bound:
20.1 Legal Counsel. Before the Rights Agent acts or refrains from acting, the Rights Agent
may consult with legal counsel selected by it (who may be legal counsel for the Company), and the
advice or opinion of such counsel shall be full and complete authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken or
omitted by it in good faith and in accordance with such advice or opinion.
20.2 Certificates as to Facts or Matters. Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering or omitting to take 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
31
certificate signed by any one of the Chairman of the Board of Directors, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer, the
Secretary or any Assistant Treasurer or Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action
taken, suffered or omitted in good faith by it under the provisions of this Agreement in reliance
upon such certificate.
20.3 Standard of Care. The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful
misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction).
20.4 Reliance on Agreement and Right Certificates. The Rights Agent shall not be liable for
or by reason of any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except as to its countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed to have been made by the Company only.
20.5 No Responsibility as to Certain Matters. The Rights Agent shall not have any liability
for or be under any responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature thereof); nor shall it
have any liability for or be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it have any liability for or be
responsible for any change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11.1.2) or any adjustment required under the provisions of Sections 3, 11, 13,
23 or 27 or responsible for the manner, method or amount of any such adjustment or the ascertaining
of the existence of facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual notice of any such change or
adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares or other securities to be issued
pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares or other
securities will, when so issued, be validly authorized and issued, fully paid and nonassessable.
20.6 Further Assurance by Company. The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.
20.7 Authorized Company Officers. The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties and the exercise of its rights
hereunder from any person believed in good faith by the Rights Agent to be one of the Chairman of
the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer,
any Vice President, the Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary
of the Company, and to apply to such officers for advice or instructions in
32
connection with its duties under this Agreement, and it shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for these instructions. Any application by the
Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken or omitted by the Rights Agent with respect to its
duties or obligations under this Agreement and the date on and/or after which such action shall be
taken or such omission shall be effective. The Rights Agent shall not be liable to the Company for
any action taken by, or omission of, the Rights Agent in accordance with a proposal included in any
such application on or after the date specified therein (which date shall not be less than three
business days after the date any such officer actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to taking of any such
action (or the effective date in the case of omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be taken or omitted.
20.8 Freedom to Trade in Company Securities. 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 Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other legal entity.
20.9 Reliance on Attorneys and Agents. 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,
omission, default, neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, omission, default, neglect or misconduct, absent gross
negligence, bad faith or willful misconduct in the selection and continued employment thereof
(which gross negligence, bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent jurisdiction).
20.10 Incomplete Certificate. If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the
form of election to purchase set forth on the reverse thereof, as the case may be, has not been
completed to certify the holder is not an Acquiring Person (or an Affiliate or Associate thereof),
the Rights Agent shall not take any further action with respect to such requested exercise or
transfer without first consulting with the Company.
20.11 Rights Holders List. At any time and from time to time after the Distribution Date,
upon the request of the Company, the Rights Agent shall promptly deliver to the Company a list, as
of the most recent practicable date (or as of such earlier date as may be specified by the
Company), of the holders of record of Rights.
20.12 No Financial Liability. No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder or in the exercise of its rights if there shall be
33
reasonable grounds for believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
20.13 Survival. The provisions of this Section 20 shall survive the exercise, exchange,
redemption or expiration of the Rights, the termination of this Agreement and the resignation,
replacement or removal of the Rights Agent.
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign
and be discharged from its duties under this Agreement upon thirty (30) days’ notice in writing
mailed to the Company and to each transfer agent of the Common Shares and/or Preferred Shares known
to the Rights Agent, as applicable, by registered or certified mail. Following the Distribution
Date, the Company shall promptly notify the holders of the Right Certificates by first-class mail
of any such resignation. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares and/or Preferred Shares, as
applicable, by registered or certified mail, and to the holders of the Right Certificates by
first-class mail or, if prior to the Distribution Date, through any filing made by the Company
pursuant to the Exchange Act. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the resigning, removed, or incapacitated Rights Agent shall remit to
the Company, or to any successor Rights Agent designated by the Company, all books, records, funds,
certificates or other documents or instruments of any kind then in its possession which were
acquired by such resigning, removed or incapacitated Rights Agent in connection with its services
as Rights Agent hereunder, and shall thereafter be discharged from all duties and obligations
hereunder. Following notice of such removal, resignation or incapacity, the Company shall appoint a
successor to such Rights Agent. If the Company shall fail to make such appointment within a period
of thirty (30) days after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a Person organized and doing business under
the laws of the United States or any state of the United States so long as such Person is
authorized to do business as a banking institution in the State of New York, the State of Missouri
or the State of Kansas, in good standing, having an office in the State of New York, the State of
Missouri or the State of Kansas, which is authorized under such laws to exercise stock transfer or
corporate trust powers and is subject to supervision or examination by Federal or state authority
and which has at the time of its appointment as Rights Agent a combined capital and surplus of at
least $10 million. After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Shares and/or Preferred Shares, as applicable,
and, following the Distribution Date, mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for in this Section 21,
34
however, or any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the 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, granted or awarded as of the Distribution Date, or upon exercise,
conversion or exchange of securities hereinafter 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 Right
Certificates representing the appropriate number of Rights in connection with such issuance or
sale; provided, however, that (i) no such Right Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such Right Certificate would
be issued, (ii) no such Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
23.1 Right to Redeem. The Board of Directors of the Company may, at its option, at any time
prior to the close of business on the tenth Business Day following the Shares Acquisition Date,
redeem all but not less than all of the then outstanding Rights at a redemption price of $.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend, recapitalization or
similar transaction occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”), and the Company may, at its option, pay the Redemption
Price in Common Shares (based on the “current per share market price,” determined pursuant to
Section 11.4, of the Common Shares at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors. Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of a
Trigger Event until such time as the Company’s right of redemption hereunder has expired. The
redemption of the Rights by the Board of Directors may be made effective at such time, on such
basis and subject to such conditions as the Board of Directors in its sole discretion may
establish.
23.2 Qualified Offer. If the Company receives a Qualified Offer and the Board of Directors of
the Company has not redeemed the outstanding Rights or exempted such offer from the terms of this
Agreement or called a special meeting of stockholders for the purpose of voting on whether or not
to exempt such Qualified Offer from the terms of this Agreement, in each case by the end of the
ninety Business Days following the commencement of such Qualified Offer, and if the Company
receives, not earlier than ninety Business Days nor later than 120 Business Days following the
commencement of such Qualified Offer, a written notice complying with the
35
terms of this Section 23.2 (the “Special Meeting Notice”), properly executed by the holders of
record (excluding the Person making the Qualified Offer and such Person’s Affiliates and
Associates), or their duly authorized proxy, of ten percent (10%) or more of the Common Shares then
outstanding, directing the Board of Directors of the Company to submit to a vote of stockholders at
a special meeting of the stockholders of the Company (a “Special Meeting”) a resolution authorizing
the redemption of all, but not less than all, of the then outstanding Rights at the Redemption
Price (the “Redemption Resolution”), then the Board of Directors of the Company shall take such
actions as are necessary or desirable to cause the Redemption Resolution to be submitted to a vote
of stockholders within ninety Business Days following receipt by the Company of the Special Meeting
Notice (the “Special Meeting Period”), including by including a proposal relating to adoption of
the Redemption Resolution in the proxy materials of the Company for the Special Meeting;
provided, however, that if the Company, at any time during the Special Meeting
Period and prior to a vote on the Redemption Resolution, enters into a Definitive Acquisition
Agreement, the Special Meeting Period may be extended (and any Special Meeting called in connection
therewith may be cancelled) if the Redemption Resolution will be separately submitted to a vote at
the same meeting as the Definitive Acquisition Agreement. For purposes of a Special Meeting Notice,
the record date for determining eligible holders of record of the Common Shares shall be the
ninetieth Business Day following the commencement of a Qualified Offer. Any Special Meeting Notice
must be delivered to the Secretary of the Company at the principal executive offices of the Company
and must set forth, as to the stockholders of record executing such Special Meeting Notice, (i) the
name and address of such stockholders, as they appear on the Company’s books and records, (ii) the
number of Common Shares that are owned of record by each of such stockholders and (iii) in the case
of Common Shares that are owned beneficially by another Person, an executed certification by the
holder of record that such holder has executed such Special Meeting Notice only after obtaining
instructions to do so from such beneficial owner. Subject to the requirements of applicable law,
the Board of Directors of the Company may take a position in favor of or opposed to the adoption of
the Redemption Resolution, or no position with respect to the Redemption Resolution, as it
determines to be appropriate in the exercise of its fiduciary duties. In the event that (A) no
Person has become an Acquiring Person prior to the effective date of redemption referred to below
in this sentence, (B) the Qualified Offer continues to be a Qualified Offer prior to the last day
of the Special Meeting Period (the “Outside Meeting Date”) and (C) either (1) the Special Meeting
is not held prior to the end of the Special Meeting Period or (2) at the Special Meeting at which a
quorum is present, the holders of a majority of the Common Shares outstanding as of the record date
for the Special Meeting selected by the Board of Directors of the Company (excluding Common Shares
beneficially owned by the Person making the Qualified Offer and such Person’s Affiliates and
Associates), shall vote in favor of the Redemption Resolution, then all of the Rights shall be
deemed redeemed at the Redemption Price by such failure to hold the Special Meeting or as a result
of the adoption of the Redemption Resolution by the stockholders of the Company (or the Board of
Directors of the Company shall take such other action as may be necessary to prevent the existence
of the Rights from interfering with the consummation of the Qualified Offer), such redemption to be
effective, as the case may be, (x) as of the close of business on the Outside Meeting Date if a
Special Meeting is not held on or prior to such date or (y) if a Special Meeting is held on or
prior to the Outside Meeting Date, as of the date on which the results of the vote adopting the
Redemption Resolution at the
36
Special Meeting are certified as official by the appointed inspectors of election for the
Special Meeting.
23.3 Redemption Procedures. Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (or at such later time as the Board of Directors may
establish for the effectiveness of such redemption) under Section 23.1 or the effectiveness of a
redemption of the Rights pursuant to Section 23.2, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so held. The Company
shall promptly give public notice of such redemption; provided, however, that the failure to give,
or any defect in, any such notice shall not affect the validity of such redemption. The Company
shall promptly give, or cause the Rights Agent to give, notice of such redemption to the holders of
the then outstanding Rights by mailing such notice to all such holders 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; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of such redemption. Any
notice which is mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. The Company may, at its option, discharge all of its obligations with
respect to the Rights by (i) issuing a press release announcing the manner of redemption of the
Rights and (ii) mailing payment of the Redemption Price to the registered holders of the Rights at
their last addresses as they appear on 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, and upon such
action, all outstanding Right Certificates shall be null and void without any further action by the
Company. Each such notice of redemption shall 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 27, and other than in connection with the
purchase, acquisition or redemption of Common Shares prior to the Distribution Date.
Section 24. Notice of Certain Events. In case the Company shall propose at any time after the
earlier of the Shares Acquisition Date and the Distribution Date (a) to pay any dividend payable in
stock of any class to the holders of Preferred Shares or to make any other distribution to the
holders of Preferred Shares (other than a regular periodic cash dividend at a rate not in excess of
125% of the rate of the last regular periodic cash dividend theretofore paid or, in case regular
periodic cash dividends have not theretofore been paid, at a rate not in excess of 50% of the
average net income per share of the Company for the four quarters ended immediately prior to the
payment of such dividends, or a stock dividend on, or a subdivision, combination or
reclassification of the Common Shares), or (b) to offer to the holders of Preferred Shares rights
or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of
any class or any other securities, rights or options, or (c) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision of outstanding
Preferred Shares), or (d) to effect any consolidation 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 sale or other
transfer), in one or more transactions, of 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 pursuant to a
merger or other acquisition agreement of the type described in Section 1.3(ii)(A)(z)), or (e) to
effect the
37
liquidation, dissolution or winding up of the Company, or (f) to declare or pay any dividend
on the Common Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends
in Common Shares), then, in each such case, the Company shall give to the Rights Agent and to each
holder of a Right Certificate, in accordance with Section 25, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of participation therein by
the holders of the Preferred Shares and/or 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 (a) or (b) above at least ten
(10) days prior to the record date for determining holders of the Preferred 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 the holders of the
Preferred Shares and/or Common Shares, whichever shall be the earlier.
The Company shall give the Rights Agent prompt notice of the occurrence of a Distribution
Date.
In case any event set forth in Section 11.1.2 or Section 13 shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to the Rights Agent and to each
holder of a Right Certificate, in accordance with Section 25, a notice of the occurrence of such
event, which notice shall describe the event and the consequences of the event to holders of Rights
under Section 11.1.2 and Section 13, and (ii) all references in this Section 24 to Preferred Shares
shall be deemed thereafter to refer to Common Shares and/or, if appropriate, other securities.
Notwithstanding anything in this Agreement to the contrary, prior to the Distribution Date a
filing by the Company with the Securities and Exchange Commission shall constitute sufficient
notice to the holders of securities of the Company, including the Rights, for purposes of this
Agreement and no other notice need be given.
Section 25. Notices. Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Right 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 with the Rights Agent) as follows:
Xxxxx Xxxxxxxxxxx Company
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxx, Xxxxxx 00000
Attention: Secretary
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxx, Xxxxxx 00000
Attention: Secretary
Subject to the provisions of Section 21 and Section 24, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right 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:
00
Xxxxxxxx Xxxx Xxxx
Xxxxx 000 – LOC 01-3116
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Shareholder Services Administration
Xxxxx 000 – LOC 01-3116
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Shareholder Services Administration
Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Right Certificate (or, prior to the Distribution Date, to the holder of
any certificate representing Common Shares) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 26. Supplements and Amendments. For so long as the Rights are then redeemable, the
Company may in its sole and absolute discretion, and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement in any respect without the approval of
any holders of Rights or Common Shares. From and after the time that the Rights are no longer
redeemable, the Company may, and the Rights Agent shall, if the Company so directs, from time to
time supplement or amend this Agreement without the approval of any holders of Rights (i) to cure
any ambiguity or to correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or (ii) to make any other changes or provisions in
regard to matters or questions arising hereunder which the Company may deem necessary or desirable,
including but not limited to extending the Final Expiration Date; provided, however, that no such
supplement or amendment shall adversely affect the interests of the holders of Rights as such
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no such
supplement or amendment may cause the Rights again to become redeemable or cause this Agreement
again to become amendable other than in accordance with this sentence; provided further, that the
right of the Board of Directors to extend the Distribution Date shall not require any amendment or
supplement hereunder. 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 26, the Rights Agent shall execute such supplement or amendment. Notwithstanding the
foregoing, the Rights Agent may, but will not be obligated to, enter into any supplement or
amendment that adversely affects the Rights Agent’s rights, duties, responsibilities, immunities or
liabilities hereunder.
Section 27. Exchange.
27.1 Exchange of Common Shares for Rights. The Board of Directors of the Company may, at its
option, at any time after the occurrence of a Trigger Event, exchange Common Shares for 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 11.1.2) by exchanging 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 amount per Right being hereinafter referred to as
the “Exchange Consideration”). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Acquiring Person shall have become the
Beneficial Owner of 50% or more of the Common Shares then outstanding. The exchange of the Rights
by the Board of Directors may be made
39
effective at such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish.
27.2 Exchange Procedures. Immediately upon the action of the Board of Directors of the
Company ordering the exchange for any Rights pursuant to Section 27.1 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 the Exchange Consideration. The Company
shall promptly give public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the Rights Agent; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity of such exchange.
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 shall 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 of Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than the Rights that have become void pursuant to the
provisions of Section 11.1.2) held by each holder of Rights.
27.3 Insufficient Shares. The Company may at its option substitute, and, in the event that
there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued
to permit an exchange of Rights for Common Shares as contemplated in accordance with this Section
27, the Company shall substitute to the extent of such insufficiency, for each Common Share that
would otherwise be issuable upon exchange of a Right, a number of Preferred Shares or fraction
thereof (or equivalent preferred stock, as such term is defined in Section 11.2) such that the
current per share market price (determined pursuant to Section 11.4) of one Preferred Share (or
equivalent preferred share) multiplied by such number or fraction is equal to the current per share
market price of one Common Share (determined pursuant to Section 11.4) as of the date of such
exchange.
Section 28. Successors. All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be construed to give
to any Person or corporation other than the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).
Section 30. Determination and Actions by the Board of Directors. The Board of Directors of
the Company shall have the exclusive power and authority to administer this Agreement and to
exercise the rights and powers specifically granted to the Board of Directors of the Company or to
the Company, or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
40
administration of this Agreement (including, without limitation, a determination to redeem or
not redeem the Rights or amend this Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with respect to the
foregoing) that are done or made by the Board of Directors of the Company in good faith shall (x)
be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as
such, and all other parties, and (y) not subject the Board of Directors to any liability to the
holders of the Rights.
Section 31. Annual Review by Independent Directors. A committee of Independent Directors (the
“Committee”), which shall be the Nominating & Corporate Governance Committee of the Board of
Directors of the Company (or any successor committee) as long as the members of such committee meet
such requirements, shall review and evaluate this Agreement at least annually in order to consider
whether the maintenance of this Agreement continues to be in the best interests of the Company and
the stockholders of the Company. Following each such review, the Committee shall communicate its
conclusions to the full Board of Directors of the Company, including any recommendation in light
thereof as to whether this Agreement should be modified or the Rights should be redeemed. The
Committee, when considering whether this Agreement should be modified or the Rights should be
redeemed, shall have the power and authority (a) to set its own agenda, (b) to retain, at the
expense of the Company, its choice of legal counsel, investment bankers and other advisors and (c)
to review all information of the Company and to consider any and all factors it deems relevant to
an evaluation of whether this Agreement should be modified or the Rights should be redeemed.
Section 32. Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
Section 33. Governing Law. This Agreement and each Right Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 34. Counterparts. This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
Section 35. Descriptive Heading. Descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of
the day and year first above written.
XXXXX XXXXXXXXXXX COMPANY |
||||
By: | /s/ Xxxxxx X. Xxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxx | |||
Title: | President, Chief Executive Officer | |||
NATIONAL CITY BANK |
||||
By: | /s/ Xxxxxx X. Xxxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxxx | |||
Title: | Vice-President | |||
42
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
Xxxxx Xxxxxxxxxxx Company
(Pursuant to Section 151 of the
Delaware General Corporation Law)
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
Xxxxx Xxxxxxxxxxx Company
(Pursuant to Section 151 of the
Delaware General Corporation Law)
Xxxxx Xxxxxxxxxxx Company, a corporation organized and existing under the General Corporation
Law of the State of Delaware (hereinafter called the “Corporation”), hereby certifies that the
following resolution was adopted by the Board of Directors of the Corporation as required by
Section 151 of the General Corporation Law at a meeting duly called and held on October 12, 1998.
RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of
this Corporation (hereinafter called the “Board of Directors” or the “Board”) in accordance with
the provisions of the Certificate of Incorporation of this Corporation, the Board of Directors
hereby creates a series of Preferred Stock, par value $.01 per share (the “Preferred Stock”), of
the Corporation and hereby states the designation and number of shares, and fixes the relative
rights, powers and preferences, and qualifications, limitations and restrictions thereof as
follows:
Section 1. Designation and Amount. The shares of such series shall be designated as “Series A
Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of shares
constituting the Series A Preferred Stock shall be 350,000. Such number of shares may be increased
or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any shares of any class
or series of stock of this Corporation ranking prior and superior to the Series A Preferred
Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in
preference to the holders of Common Stock, par value $.01 per share (the “Common Stock”),
of the Corporation, and of any other stock ranking junior to the Series A Preferred Stock,
shall be entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each such date being referred to
herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share (rounded
A-1
to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision
for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series A Preferred
Stock as provided in paragraph (A) of this Section 2 immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on
the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of
such shares, unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock
in an amount less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
A-2
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series
A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to
a vote of the stockholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision, combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in each such case the number
of votes per share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock, or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law, holders of Series A
Preferred Stock shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions payable on the
Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on shares of Series
A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any shares
of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
A-3
(iii) redeem or purchase or otherwise acquire for consideration shares of any
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior (both as to
dividends and upon dissolution, liquidation or winding up) to the Series A Preferred
Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with the Series
A Preferred Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after
the acquisition thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or
any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation, dissolution or
winding up of the Corporation, voluntary or otherwise no distribution shall be made (1) to the
holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received an amount per share (the “Series A Liquidation
Preference”) equal to $100 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, provided that the
holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of shares of Common stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on
the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which
the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision, combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than
A-4
by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of
the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that are outstanding immediately prior
to such event.
(B) In the event, however, that there are not sufficient assets available to permit
payment in full of the Series A Liquidation Preference and the liquidation preferences of
all other classes and series of stock of the Corporation, if any, that rank on a parity
with the Series A Preferred Stock in respect thereof, then the assets available for such
distribution shall be distributed ratably to the holders of the Series A Preferred Stock
and the holders of such parity shares in proportion to their respective liquidation
preferences.
(C) Neither the merger or consolidation of the Corporation into or with another
corporation nor the merger or consolidation of any other corporation into or with the
Corporation shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall not be redeemable by
the Company.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets upon liquidation, dissolution or winding up, junior to all
series of any other class of the Corporation’s Preferred Stock, except to the extent that any such
other series specifically provides that it shall rank on a parity with or junior to the Series A
Preferred Stock.
A-5
Section 10. Amendment. At any time any shares of Series A Preferred Stock are outstanding,
the Certificate of Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting separately as a single
class.
Section 11. Fractional Shares. Series A Preferred Stock may be issued in fractions of a share
that shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit of all other rights
of holders of Series A Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation
by its Chairman of the Board this ___day of , 1998.
A-6
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- | Rights |
NOT EXERCISABLE AFTER OCTOBER 14, 2011 OR EARLIER IF NOTICE OF REDEMPTION OR
EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED OR ACQUIRED PURSUANT TO AN AGREEMENT
OF THE TYPE DESCRIBED IN SECTION 1.3(ii)(A)(z) OF THE AGREEMENT. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT, AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
(SPECIFIED IN SECTION 11.1.2 OF THE AGREEMENT), RIGHTS BENEFICIALLY OWNED BY OR
TRANSFERRED TO AN ACQUIRING PERSON (AS DEFINED IN THE AGREEMENT), OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
Xxxxx Xxxxxxxxxxx Company
Xxxxx Xxxxxxxxxxx Company
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 Amended and Restated Rights Agreement, dated as of October 14, 2008, as the
same may be amended from time to time (the “Agreement”), between Xxxxx Xxxxxxxxxxx Company, a
Delaware corporation (the “Company”), and National City Bank, a Delaware corporation, as Rights
Agent (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date
and prior to 5:00 P.M. New York time on October 14, 2011, at the offices of the Rights Agent, or
its successors as Rights Agent, designated for such purpose, one one-hundredth of a fully paid,
nonassessable share of Series A Junior Participating Preferred Stock, par value $.01 per share (the
“Preferred Shares”) of the Company, at a purchase price of $75 per one one-hundredth of a Preferred
Share, subject to adjustment (the “Purchase Price”), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and certification duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-hundredths of a Preferred
Share which may be purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of October 14, 2008 based on the Preferred Shares
as constituted at such date. Capitalized terms used in this Right Certificate without definition
shall have the meanings ascribed to them in the Agreement. As provided in the Agreement, the
Purchase Price and the number of Preferred Shares which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and adjustment upon the
happening of certain events, including Trigger Events.
This Right Certificate is subject to all of the terms, provisions and conditions of the
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Agreement reference is hereby made for a full description
B-1
of the rights, limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of the Agreement are on
file at the principal offices of the Company and the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon surrender at the
offices of the Rights Agent designated for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths of a Preferred Share as the Rights evidenced
by the Right Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Agreement, the Board of Directors may, at its option, (i)
redeem the Rights evidenced by this Right Certificate at a redemption price of $.01 per Right or
(ii) exchange Common Shares for the Rights evidenced by this Certificate, in whole or in part.
No fractional Preferred Shares will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions of Preferred Shares which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the Company, be evidenced by
depository receipts), but in lieu thereof a cash payment will be made, as provided in the
Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of the Preferred Shares 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 Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting stockholders (except
as provided in the Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in
the Agreement.
If any term, provision, covenant or restriction of the 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 the Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
This Right Certificate shall not be valid or binding for any purpose until it shall have been
countersigned by the Rights Agent.
B-2
WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of , 20_.
Attest: | Xxxxx Xxxxxxxxxxx Company | |||||
By:
|
By: | |||||
Title: | Title: | |||||
Countersigned: | ||||||
National City Bank, as Rights Agent | ||||||
By: |
||||||
Authorized Signature |
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
hereby sells, assigns and transfers unto
(Please print name and address
of transferee)
of transferee)
Rights evidenced by this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with full power of substitution.
Dated:
Dated:
Signature
Signature Guaranteed:
Signatures must be guaranteed by an “eligible guarantor institution” as defined in Rule
17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended.
The undersigned hereby certifies that:
(1) the Rights evidenced by this Right Certificate are not beneficially owned by and are not
being assigned to an Acquiring Person or an Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Right Certificate from any person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate thereof.
Dated:
|
B-4
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
exercise the Right Certificate.)
To: Xxxxx Xxxxxxxxxxx Company
The undersigned hereby irrevocably elects to exercise Rights represented by
this Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights
(or such other securities or property of the Company or of any other Person which may be issuable
upon the exercise of the Rights) and requests that certificates for such shares be issued in the
name of:
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new
Right Certificate for the balance remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
or other identifying number
(Please print name and address)
Dated:
|
Signature Guaranteed:
Signatures must be guaranteed by an “eligible guarantor institution” as defined in Rule
17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended.
The undersigned hereby certifies that:
(1) the Rights evidenced by this Right Certificate are not beneficially owned by and are not
being assigned to an Acquiring Person or an Affiliate or an Associate thereof; and
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(2) after due inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Right Certificate from any person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate thereof.
Dated:
|
NOTICE
The signature in the foregoing Form of Assignment and Form of Election to Purchase must
conform to the name as written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment or Form of Election
to Purchase is not completed, the Company will deem the beneficial owner of the Rights evidenced by
this Right Certificate to be an Acquiring Person or an Affiliate or Associate hereof and such
Assignment or Election to Purchase will not be honored.
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EXHIBIT C
As described in the Rights Agreement, Rights which are held by or have been held by an
Acquiring Person or Associates or Affiliates thereof (as defined in the Rights Agreement) and
certain transferees thereof shall become null and void and will no longer be transferable.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
PREFERRED SHARES
On October 12, 1998 the Board of Directors of Xxxxx Xxxxxxxxxxx Company (the “Company”)
declared a dividend of one preferred share purchase right (a “Right”) for each share of common
stock, $.01 par value (the “Common Shares”), of the Company outstanding at the close of business on
November 9, 1998 (the “Record Date”). As long as the Rights are attached to the Common Shares, the
Company will issue one Right (subject to adjustment) with each new Common Share so that all such
shares will have attached Rights. When exercisable, each Right will entitle the registered holder
to purchase from the Company one one-hundredth of a share of Series A Junior Participating
Preferred Stock (the “Preferred Shares”) at a price of $75 per one one-hundredth of a Preferred
Share, subject to adjustment (the “Purchase Price”). The description and terms of the Rights are
set forth in an Amended and Restated Rights Agreement, dated as of October 14, 2008, as the same
may be amended from time to time (the “Agreement”), between the Company and National City Bank, as
Rights Agent (the “Rights Agent”).
Until the earlier to occur of (i) ten (10) business days following a public announcement that
(or a majority of the Board of Directors of the Company becoming aware that) a person or group of
affiliated or associated persons has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the Common Shares (an “Acquiring Person”) or (ii) ten (10) business
days (or such later date as may be determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an Acquiring Person) following the
commencement or announcement of an intention to make a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or group of 20% or more
of the Common Shares (the earlier of (i) and (ii) being called the “Distribution Date”), the Rights
will be evidenced, with respect to any of the Common Share certificates or shares held in
uncertificated book-entry form outstanding as of the Record Date, by such Common Share certificate
or confirmation evidencing Common Shares in book-entry form together with a copy of this Summary of
Rights.
The Agreement provides that until the Distribution Date (or earlier redemption, exchange,
termination, or expiration of the Rights), 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 or confirmations evidencing shares held in uncertificated book-entry form
issued after the close of business on the Record Date upon transfer or new issuance of the Common
Shares will contain a notation incorporating the Agreement by reference. Until the Distribution
Date (or earlier redemption, exchange, termination or expiration of the Rights), the transfer on
the Company’s direct registration system of any Common Shares represented by any such book-entries
or the surrender for transfer of any certificates for Common Shares, with or without such notation
or a copy of this Summary of Rights, will also constitute the transfer of the Rights associated
with the Common Shares
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represented by such certificate or such book-entry. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be
mailed to holders of record of the Common Shares as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will expire on October
14, 2011, subject to the Company’s right to extend such date (the “Final Expiration Date”), unless
earlier redeemed or exchanged by the Company or terminated.
Each Preferred Share purchasable upon exercise of the Rights will be entitled, when, as and
if declared, to a minimum preferential quarterly dividend payment of $1.00 per share but, if
greater, will be entitled to an aggregate dividend of 100 times the dividend, if any, declared per
Common Share. In the event of the liquidation, dissolution or winding up of the Company, the
holders of the Preferred Shares will be entitled to a minimum preferential liquidation payment of
$100 per share (plus any accrued but unpaid dividends) but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each Preferred Share will have 100 votes
and will vote together with the Common Shares. Finally, in the event of any merger, consolidation
or other transaction in which Common Shares are exchanged, each Preferred Share will be entitled
to receive 100 times the amount received per Common Share. Preferred Shares will not be
redeemable. These rights are protected by customary antidilution provisions. Because of the nature
of the Preferred Share’s dividend, liquidation and voting rights, the value of one one-hundredth of
a Preferred Share purchasable upon exercise of each Right should approximate the value of one
Common Share.
The Purchase Price payable, and the number of Preferred Shares or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification
of the Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares or convertible securities at less than
the current market price of the Preferred Shares or (iii) upon the distribution to holders of the
Preferred Shares of evidences of indebtedness, cash, securities or assets (excluding regular
periodic cash dividends at a rate not in excess of 125% of the rate of the last regular periodic
cash dividend theretofore paid or, in case regular periodic cash dividends have not theretofore
been paid, at a rate not in excess of 50% of the average net income per share of the Company for
the four quarters ended immediately prior to the payment of such dividend, or dividends payable in
Preferred Shares (which dividends will be subject to the adjustment described in clause (i) above))
or of subscription rights or warrants (other than those referred to above).
In the event that a Person becomes an Acquiring Person or if the Company were the surviving
corporation in a merger with an Acquiring Person or any affiliate or associate of an Acquiring
Person and the Common Shares were not changed or exchanged, each holder of a Right, other than
Rights that are or were acquired or beneficially owned by the Acquiring Person (which Rights will
thereafter be void), will thereafter have the right to receive upon exercise that number of Common
Shares having a market value of two times the then current Purchase Price of the Right. In the
event that, after a person has become an Acquiring Person, the Company were acquired in a merger or
other business combination transaction or more than 50% of its
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assets or earning power were sold, proper provision shall be made so that each holder of a
Right shall thereafter have the right to receive, upon the exercise thereof at the then current
Purchase Price of the Right, that number of shares of common stock of the acquiring company which
at the time of such transaction would have a market value of two times the then current Purchase
Price of the Right.
At any time after a Person becomes an Acquiring Person and prior to the acquisition by such
Acquiring Person of 50% or more of the outstanding Common Shares, the Board of Directors may cause
the Company to exchange the Rights (other than Rights owned by an Acquiring Person which will have
become void), in whole or in part, for Common Shares at an exchange rate of one Common Share per
Right (subject to adjustment).
No adjustment in the Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional Preferred Shares or Common Shares
will be issued (other than fractions of Preferred Shares which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the Company, be evidenced by
depository receipts), and in lieu thereof, a payment in cash will be made based on the market price
of the Preferred Shares or Common Shares on the last trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of $.01 per Right (the
“Redemption Price”) by the Board of Directors at any time prior to the close of business on the
tenth business day following notice to a majority of the Board of Directors or the public
announcement or public disclosure by the Company or an Acquiring Person that an Acquiring Person
has become such. In addition, if a Qualified Offer (as described below) is made, the record holders
of 10% of the outstanding shares of Common Stock may direct the Board of Directors of the Company
to call a special meeting of stockholders to consider a resolution authorizing a redemption of all
Rights. If the special meeting is not held within 90 business days of being called (subject to
extension under certain circumstances) or if, at the special meeting, the holders of a majority of
the shares of Common Stock outstanding (other than shares held by the offeror and its affiliated
and associated persons) vote in favor of the redemption of the Rights, then the Board will redeem
the Rights or take such other action as may be necessary to prevent the Rights from interfering
with the consummation of the Qualified Offer.
A Qualified Offer is an offer determined by a majority of the Independent Directors of the
Company to be a fully-financed offer for all outstanding shares of Common Stock at a per share
offer price as to which a nationally recognized investment banking firm retained by the Board of
Directors of the Company has not rendered an opinion to the Board of Directors that such price is
either unfair or inadequate, and meeting certain other conditions. A Qualified Offer is conditioned
upon a minimum of at least two-thirds of the outstanding shares of Common Stock not held by the
offeror (and its affiliated and associated persons) being tendered and not withdrawn, with a
commitment to acquire all shares of Common Stock not tendered for the same consideration. If the
Qualified Offer includes non-cash consideration, such consideration must consist solely of
freely-tradeable common stock of a publicly traded company, and the board and its representatives
must be given access to conduct a due diligence review of the offeror to determine whether the
consideration is fair and adequate. A Qualified Offer must also remain open for at least 120
business days following commencement.
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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.
Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company beyond those as an existing stockholder, including, without limitation, the right to
vote or to receive dividends.
Any of the provisions of the Agreement may be amended by the Board of Directors of the Company
for so long as the Rights are then redeemable, and after the Rights are no longer redeemable, the
Company may amend or supplement the Agreement in any manner that does not adversely affect the
interests of the holders of the Rights (other than an Acquiring Person or an affiliate or associate
of an Acquiring Person).
A copy of the Agreement has been filed with the Securities and Exchange Commission as an
Exhibit to a Current Report on Form 8-K. A copy of the Agreement is available 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 Agreement, which is incorporated herein by reference.
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