EXHIBIT 4
CHORUS COMMUNICATIONS GROUP, LTD.
AND
NORWEST BANK MINNESOTA, N.A.,
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF MARCH 22, 2000
TABLE OF CONTENTS
Section 1. Certain Definitions..............................................4
Section 2. Appointment of Rights Agent......................................6
Section 3. Issue of Right Certificates......................................6
Section 4. Form of Right Certificates.......................................8
Section 5. Countersignature and Registration................................8
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates..........9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....9
Section 8. Cancellation and Destruction of Right Certificates..............11
Section 9. Reservation and Availability of Common Shares...................11
Section 10. Common Shares Record Date.......................................12
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights..........................................................18
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......18
Section 13. Consolidation, Merger, Share Exchange or Sale or Transfer of
Assets or Earning Power.........................................18
Section 14. Fractional Rights and Fractional Shares.........................21
Section 15. Rights of Action................................................21
Section 16. Agreement of Right Holders......................................21
Section 17. Right Certificate Holder Not Deemed a Shareowner................22
Section 18. Concerning the Rights Agent.....................................22
Section 19 Merger or Consolidation or Change of Name of Rights Agent.......23
Section 20. Duties of Rights Agent..........................................23
Section 21. Change of Rights Agent..........................................25
Section 22. Issuance of New Right Certificates..............................26
Section 23. Redemption......................................................27
Section 24. Exchange........................................................27
Section 25. Notice of Certain Events........................................28
Section 26. Notices.........................................................29
Section 27. Supplements and Amendments......................................29
Section 28. Successors......................................................30
Section 29. Benefits of this Agreement......................................30
Section 30. Severability....................................................30
Section 31. Governing Law...................................................30
Section 32. Counterparts....................................................30
Section 33. Descriptive Headings............................................30
Section 34. Determinations and Actions by the Board of Directors............30
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
RIGHTS AGREEMENT
THIS AGREEMENT, dated as of March 22, 2000, between CHORUS COMMUNICATIONS
GROUP, LTD., a Wisconsin corporation (the "Company"), and Norwest Bank
Minnesota, N.A. (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has determined it is desirable
and in the best interests of the Company and its shareowners for the Company
to enter into this Agreement;
WHEREAS, the Board of Directors of the Company has authorized and declared a
dividend of one common share purchase right (a "Right") for each Common Share
(as hereinafter defined) of the Company outstanding upon the close of
business on March 31, 2000 (the "Record Date") payable on such date (the
"Payment Date"), and has authorized and directed the issuance of one Right
with respect to each Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date (hereinafter defined), each Right representing
the right to purchase one-half of one Common Share of the Company upon the
terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean 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 15% or more of the Common Shares of
the Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, any entity
holding Common Shares for or pursuant to the terms of any such plan, or any
trustee, administrator or fiduciary of such a plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as a 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 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person would, but for the
foregoing, become an Acquiring Person by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company at any time
that the Person is or thereby becomes the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding (other than Common Shares
acquired solely as a result of corporate action of the Company not caused,
directly or indirectly, by such Person), then such Person shall be deemed to
be an "Acquiring Person". 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 paragraph (a), has become such inadvertently, and such
Person divests as promptly as practicable 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 paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of
this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) 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;
(ii) which such Person or any of such Person's Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights,
rights (other than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations 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 with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) for the purpose
of, or with respect to, acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in the State of Wisconsin are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., Madison,
Wisconsin time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Madison, Wisconsin time, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean the
shares of common stock, no par value of the Company, or shares having
equivalent rights, privileges and preferences to common stock. "Common
Shares" when used with reference to any Person other than the Company shall
mean the capital stock (or equivalent equity interest) with the greatest
voting power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(h) "Final Expiration Date" shall have the meaning set forth in Section 7
hereof.
(i) "Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
(j) "Redemption Date" shall have the meaning set forth in Section 7 hereof.
(k) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed or amended pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such.
(l) "Subsidiary" of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution
Date also be the holders of the Common Shares of the Company) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth day after the Shares Acquisition Date
or (ii) the tenth Business Day (or such later date as may be determined by
action of the Company's Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement of, or of the
first public announcement of the intention of any Person to commence, a
tender or exchange offer the consummation of which would result in any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, any entity holding
Common Shares for or pursuant to the terms of any such plan, or any trustee,
administrator, or fiduciary of such a plan) becoming the Beneficial Owner of
Common Shares of the Company aggregating 15% or more of the then outstanding
Common Shares (including in either case any such date which is after the date
of this Agreement and prior to the Payment Date; the earlier of such dates
being herein referred to as the "Distribution Date"; provided, however, that
if the tenth day or Business Day, as the case may be, after the pertinent
date occurs before the Record Date, "Distribution Date" shall mean the Record
Date), (x) the Rights will be evidenced (subject to the provisions of Section
3(b) hereof) by the certificates for Common Shares registered in the names of
the holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Shares. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Shares as of the close of business on
the Distribution Date, at the address of such holder shown on the records of
the Company, a Right Certificate, in substantially the form of Exhibit A
hereto (a "Right Certificate"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) On the Payment Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Rights to Purchase Common Shares, in
substantially the form of Exhibit B hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as
of the close of business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof. Until the Distribution Date (or the earlier of the
Redemption Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date, with or without
a copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, certificates for reacquired Common Shares referred to in
the last sentence of this paragraph (c) and certificates issued on the
transfer of Common Shares) after the Record Date but prior to the earliest of
the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them a
legend in substantially the following form:
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement between Chorus Communications
Group, Ltd. and Norwest Bank Minnesota, N.A., dated as of March 22, 2000, and
as such agreement may be amended (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which is on file at
the principal executive offices of Chorus Communications Group, Ltd. Under
certain circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced by this
certificate. Chorus Communications Group, Ltd. will mail to the holder of
this certificate a copy of the Rights Agreement without charge after receipt
of a written request therefore. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement), whether held by such person or any subsequent holder, shall
become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated 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 cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.
SECTION 4. FORM OF RIGHT CERTIFICATES.
The Right Certificates (and the forms of election to purchase Common Shares
and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit A 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 on which the
Rights may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of Common Shares as shall be set
forth therein at the price per Common Share set forth therein (the "Purchase
Price"), but the amount and type of securities purchasable upon exercise of
each Right and the Purchase Price shall be subject to adjustment as provided
herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company by its
Chairman of the Board, Chief Executive Officer, President or any Vice
President either manually or by facsimile signature, and shall be attested by
the Treasurer, an Assistant Treasurer, the Corporate Secretary or an
Assistant Corporate Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless countersigned. In
case any officer of the Company who shall have signed any of the 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 Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates 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.
(a) Subject to the provisions of Section 14 hereof, at any time after the
close of business on the Distribution Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date,
any Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section 11(a)(ii)
hereof or that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number
of Common Shares as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. 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 of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, 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 delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Each Right shall be exercisable to purchase one-half of one Common Share,
subject to further adjustment as provided herein. The registered holder of
any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office of the Rights Agent, together with payment of
the Purchase Price for each Common Share as to which the Rights are
exercised, at or prior to the earliest of (i) the close of business on March
22, 2010, subject to extension (the "Final Expiration Date"), (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), and (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof; provided, however, that no less than two
Rights, and only integral multiples of two Rights, may be exercised at any
time by such registered holders; and, provided further, that if the number of
Rights exercised would entitle the holder thereof to receive any fraction of
a Common Share greater than one-half of a Common Share, then the holder
thereof shall not be entitled to exercise such Rights unless such holder
concurrently purchases from the Company (and in such event the Company shall
sell to such holder), at a price in proportion to the Purchase Price, an
additional fraction of a Common Share which, when added to the number of
Common Shares to be received upon such exercise, will equal an integral
number of Common Shares.
(b) The Purchase Price for each full Common Share pursuant to the exercise of
Rights shall initially be $120 (equivalent to $60 for each one-half of one
Common Share), shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights, with
the form of election to purchase duly executed, accompanied by payment of the
Purchase Price for the Common Shares to be purchased and an amount equal to
any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, as set forth below, the
Rights Agent shall thereupon promptly (i) requisition from any transfer agent
of the Common Shares certificates for the number of Common Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional
Common Shares in accordance with Section 14 hereof, (iii) after receipt of
such certificates, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such Right
Certificate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) shall be made by certified check,
cashier's check, bank draft or money order payable to the order of the
Company, except that, if so provided by the Board of Directors of the
Company, the payment of the Purchase Price following the occurrence of a
Section 11(a)(ii) Event (as hereinafter defined) and until the first
occurrence of a Section 13 Event (as hereinafter defined) may be made wholly
or in part by delivery of a certificate or certificates (with appropriate
stock powers executed in blank attached thereto) evidencing a number of
Common Shares of the Company equal to the then Purchase Price divided by the
closing price (as determined pursuant to Section 11(d) hereof) per Common
Share on the Trading Day (as such term is hereinafter defined) immediately
preceding the date of such exercise. If the Company is obligated to issue
other securities of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate.
(d) 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 to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to take any action with
respect to a registered holder of a Right Certificate upon the occurrence of
any purported transfer, assignment or exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate following the form of assignment or election to purchase set
forth on the reverse of the Right Certificate surrendered for such transfer,
assignment or exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall either deliver all cancelled Right
Certificates to the Company after a period of approximately one year, or at
the written request of the Company and after any Securities and Exchange
Commission retention period, the Rights Agent shall destroy such cancelled
Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF COMMON SHARES.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Common Shares or any
authorized and issued Common Shares held in its treasury, the number of
Common Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7.
(b) So long as the Common Shares issuable upon the exercise of Rights may be
listed on any national securiti es exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable,
all Common Shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Common Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares (except as otherwise
provided by any corporation law applicable to the Company).
(d) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or
of any Common Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a person other than, or
the issuance or delivery of certificates for the Common Shares in a name
other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or to deliver any certificates
for Common Shares upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
SECTION 10. COMMON SHARES RECORD DATE.
Each person in whose name any certificate for Common Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the 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 Common Shares
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Common Shares transfer
books of the Company are open.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS.
The Purchase Price, the number of Common Shares covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
a. (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Common Shares payable in Common
Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of Common Shares or (D) issue
any shares of its capital stock in a reclassification of the Common 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(a), the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of 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 Common Shares transfer books of the Company
were open, such holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event any Person shall
become an Acquiring Person, other than pursuant to any transaction set forth
in Section 13(a), each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price per full Common Share multiplied by the number of Common Shares for
which a Right is then exercisable, in accordance with the terms of this
Agreement, such number of Common Shares of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price per full
Common Share by the number of Common Shares for which a Right is then
exercisable and dividing that product by (y) 50% of the then current per
share market price of the Common Shares of the Company (determined pursuant
to Section 11(d)) on the date the Person became an Acquiring Person (such
number of shares, the "Adjustment Shares").
From and after such time as a Person becomes an Acquiring Person (a "Section
11(a)(ii) Event"), any Rights that are or were acquired or beneficially owned
by such Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) shall be void and any holder of such Rights shall thereafter have no
right to exercise such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void pursuant
to the preceding sentence or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate; and any Right Certificate delivered
to the Rights Agent for transfer to an Acquiring Person whose Rights would be
void pursuant to the preceding sentence shall be cancelled. The Company shall
use all reasonable efforts to ensure that the provisions of this paragraph
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 an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(iii) In the event that there shall not be sufficient Common Shares of the
Company issued but not outstanding or authorized but unissued (and not
reserved for issuance for purposes other than upon exercise of the Rights) to
permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company 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 payable with respect to such
Right (such excess, the "Spread"), and (B) with respect to each Right, 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) Common Shares or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred
stock, if any, which the Board of Directors of the Company has deemed to have
the same value as Common Shares (such shares of preferred stock,
hereinafter referred to as "common stock equivalents")), (4) debt
securities of the Company, (5) other assets or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of the Company
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company; provided, however, if the
Company shall not have made adequate provision to substitute for the
Adjustment Shares pursuant to clause (B) above within thirty (30) days
following the occurrence of a Section 11(a)(ii) Event (the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of any
portion of the Purchase Price, Common 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
might be authorized for issuance for exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek shareowner approval for the
authorization of such additional shares (such period, as it may be extended,
the "Substitution Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or second sentences of
this Section 11(a)(iii), the Company (x) shall provide, subject to the last
paragraph of Section 11(a)(ii) hereof, 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 to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Common Shares shall be the current per share market price
(as determined pursuant to Section 11(d) hereof) of the Common Shares on the
Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Common Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe
for or purchase Common Shares (or securities convertible into Common Shares)
at a price per Common Share (or having a conversion price per share, if a
security convertible into Common Shares) less than the then current per share
market price of the Common Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the number
of Common Shares outstanding on such record date plus the number of Common
Shares which the aggregate offering price of the total number of Common
Shares so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of Common
Shares outstanding on such record date plus the number of additional Common
Shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). 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.
Common Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Common 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 or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price of the
Common Shares (as defined in Section 11(d)) 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 assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable to
one Common Share and the denominator of which shall be such current per share
market price of the Common Shares. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) For the purpose of any computation hereunder, the "current per share
market price" of the Common Shares on any date shall be deemed to be the
average of the daily closing prices per Common Share for the 30 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 Common Shares is determined during a period following the
announcement by the issuer of such Common Shares of (i) a dividend or
distribution on such Common Shares payable in Common Shares or securities
convertible into Common Shares, or (ii) any subdivision, combination or
reclassification of Common Shares and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and
in each such case, the current per share market price shall be appropriately
adjusted to reflect the current market price per Common Share. The closing
price for each Trading Day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Common
Shares are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Common Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("Nasdaq") or such other system then in use, or, if on any such date the
Common Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Common Shares selected by the Board of Directors of
the Company. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, a Business Day.
(e) 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; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth
of a share as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(f) If, as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Common Shares, thereafter
the number of such other shares so receivable upon exercise of any Right
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Common
Shares contained in Section 11(a) through (c), inclusive, and the provisions
of Sections 7, 9, 10 and 13 with respect to the Common Shares shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any adjustment
made to the Purchase Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of Common Shares purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of Common
Shares (calculated to the nearest ten-thousandth of a Common Share) obtained
by (i) multiplying (x) the number of Common Shares covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Common Shares purchasable 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 Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandth) 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 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(i), the Company shall, 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 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the 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
shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Common Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of Common Shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the par value, if any, of the Common Shares issuable
upon exercise of the Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable (except as
otherwise provided by any corporation law applicable to the Company) Common
Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment in
the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
Common Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of Common Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder
a due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in addition
to those adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Common Shares, issuance
wholly for cash of any Common Shares at less than the current market price,
issuance wholly for cash of Common Shares or securities which by their terms
are convertible into or exchangeable for Common Shares, dividends on Common
Shares payable in Common Shares or issuance of rights, options or warrants
referred to in Section 11(b), hereafter made by the Company to holders of its
Common Shares shall not be taxable to such shareowners.
(n) The Company covenants and agrees that it shall not, at any time after the
earlier of the Distribution Date or the Shares Acquisition Date, (i)
consolidate with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), (ii) merge with or
into any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction, or a
series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof) or (iv) consummate a share exchange with any other
Person, if at the time of or immediately after such consolidation, merger,
sale or share exchange (A) 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, (B) prior to, simultaneously with or immediately
after such consolidation, merger, sale or share exchange the shareowners of
the Person who constitute, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates or
(C) the form or nature of organization of the Principal Party would preclude
or limit the exercisability of the Rights.
(o) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23, Section 24 or Section 27 hereof,
take (or permit any Subsidiary to take) any action if at the time such action
is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof.
SECTION 13. CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event that, following the Shares Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger, or any Person or Persons (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o) hereof) shall consummate a share exchange with the Company, and, in
connection with such consolidation, merger or share exchange, all or part of
the outstanding Common Shares shall be changed into or exchanged for stock or
other securities of any other Person (or the Company) or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one transaction or
a series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case, proper provision
shall be made so that: (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price per full
Common Share multiplied by the number of Common Shares for which a Right is
then exercisable (or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of any of the events described in clauses (x), (y) or (z)
above (a "Section 13 Event"), the Purchase Price per full Common Share in
effect immediately prior to the first occurrence of a Section 11(a)(ii) Event
multiplied by the number of Common Shares for which a Right was exercisable
immediately prior to such first occurrence), in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
non-assessable (except as otherwise required by any corporation law
applicable to the Principal Party (as such term is hereinafter defined)) and
freely tradable Common Shares of the Principal Party, not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price per full Common Share by the number of Common Shares for which
a Right is exercisable immediately prior to the first occurrence of a Section
13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such shares for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price per full Common Share in effect
immediately prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by (2) 50% of the current market price (determined pursuant
to Section 11(d) hereof) per Common Share of such Principal Party on the date
of consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
Common Shares thereafter deliverable upon the exercise of the Rights; and (v)
the provisions of Section 11(a)(ii) hereof shall be of no effect following
the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of the
first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such
merger, consolidation or share exchange, and if no securities are so issued,
(A) the Person that is the other party to the merger, consolidation or share
exchange and that survives such merger or consolidation, or, if there is more
than one such Person, the Person the Common Shares of which have the
greatest aggregate market value of shares outstanding or (B) if the Person
that is the other party to the merger or consolidation does not survive the
merger or consolidation, the Person that does survive the merger or
consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in clause (z) of the first
sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month-period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall
refer to such other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Shares of two or
more of which are and have been so registered, "Principal Party" shall refer
to whichever of such Persons is the issuer of the Common Shares having the
greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger, share
exchange, sale or transfer unless the Principal Party shall have a sufficient
number of authorized Common Shares which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date
of any consolidation, merger, share exchange or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Securities Act of
1933, as amended (the "Act"), with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and will use
its best efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the Final
Expiration Date; and
(ii) deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates which comply in all respects with
the requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, share exchanges, sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence of
a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the 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(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed 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 fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions of Common Shares
upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, equal to
one-half of a Common Share or less, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one Common Share. Any exercise of Rights that would entitle the
holder thereof to receive any fraction of a Common Share greater than
one-half of a Common Share shall be governed by Section 7(a) hereof. For
purposes of this Section 14(b), the current market value of a Common Share
shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives his
right to receive any fractional Rights or any fractional shares upon exercise
of a Right (except as provided above).
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered 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, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such 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 will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person
subject to, this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in whose
name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) 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 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.
(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 or competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the Company
must use its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREOWNER. No holder,
as such, of any Right Certificate shall be entitled to vote, receive
dividends or other distributions or be deemed for any purpose the holder of
the Common Shares or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
shareowner of the Company or any right to vote for the election of directors
or upon any matter submitted to shareowners at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareowners (except as provided in
Section 25 hereof), 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.
(a) The Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability for, or
in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate
or certificate for the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper person
or persons, or otherwise upon the advice of counsel as set forth in Section
20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. 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.
(b) 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 the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal counsel
for the Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights
Agent shall deem it necessary or desirable that any fact or matter be proved
or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the Chief
Executive Officer, the President or any Vice President and by the Treasurer
or any Assistant Treasurer or the Corporate Secretary or any Assistant
Corporate Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except 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.
(e) The Rights Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the
due authorization, execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3,
11, 13, 23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice that such change
or adjustment is required); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any Common Shares or other securities to be issued pursuant to this Agreement
or any Right Certificate or as to whether any Common Shares or other
securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Corporate Secretary, any Assistant Corporate Secretary, the
Treasurer or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any shareowner, director, officer or employee of the
Rights Agent may buy, sell or deal in, or act as the transfer agent for, any
of the Rights, Common Shares 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.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised
in the selection and continued employment thereof.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 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 by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of 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) a corporation organized and doing business under
the laws of the United States or of the State of New York or the State of
Wisconsin (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the
State of New York or the State of Wisconsin), in good standing, having an
office or agency in the State of Wisconsin or the State of New York, which is
authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million, or (b) an Affiliate of
a corporation described in clause (a) of this sentence. After appointment,
the successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors
to reflect any adjustment or change in the 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.
SECTION 23. REDEMPTION.
(a) The Rights may be redeemed by action of the Board of Directors pursuant
to subsection (b) of this Section 23 and shall not be redeemed in any other
manner.
(b) The Board of Directors of the Company may, at its option, at any time
prior to such time as any Person becomes an Acquiring Person, redeem all but
not less than all the then outstanding Rights at a redemption price of $.001
per Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"). The redemption of
the Rights by the Board of Directors may be made effective at such time on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired.
(c) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the redemption of the Rights pursuant to
subsection (b) of this Section 23, and without any further action and without
any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. The Company shall promptly give public notice of any such redemption;
provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption. Within 10 days after
the effectiveness of the action of the Board of Directors ordering the
redemption of the Rights pursuant to subsection (b), the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 24 hereof, and other than in
connection with the purchase of Common Shares prior to the Distribution Date.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares of the Company at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any such
Subsidiary, any entity holding Common Shares for or pursuant to the terms of
any such plan, or any trustee, administrator or fiduciary of such a plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of Common Shares equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Common 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 Rights which have
become void pursuant to the provisions of Section 11(a)(ii) hereof) held by
each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its option,
may substitute common stock equivalents (as such term is defined in Section
11(a)(iii) hereof) for some or all of the Common Shares exchangeable for
Rights.
(d) In the event that there shall not be sufficient Common Shares or common
stock equivalents issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall take all such action as may be necessary to authorize
additional Common Shares or common stock equivalents for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common Shares or
to distribute certificates which evidence fractional Common Shares. 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 issued an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second
sentence of Section 11(d) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, after the Distribution Date, (i) to
pay any dividend payable in stock of any class to the holders of Common
Shares or to make any other distribution to the holders of Common Shares
(other than a regular quarterly cash dividend), (ii) to offer to the holders
of Common Shares rights or warrants to subscribe for or to purchase any
additional Common Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of Common
Shares (other than a reclassification involving only the subdivision of
outstanding Common Shares), (iv) to effect any consolidation or merger into
or with (other than a merger of a Subsidiary into or with the Company), to
effect any share exchange 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, or
(v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, share exchange, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares if any such date is
to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of Common Shares for purposes of such action, and in
the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares, whichever shall be the earlier.
(b) In case any of Section 11(a)(ii) Event or Section 13 Event shall occur,
then, in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice
shall include a brief summary of the Section 11(a)(ii) Event or Section 13
Event, as the case may be, and the consequences thereof to holders of Rights.
SECTION 26 NOTICES.
(a) 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:
Chorus Communications Group, Ltd.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Secretary
(b) Subject to the provisions of Section 21 hereof, 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:
Norwest Bank Minnesota, N.A.
Norwest Bank Minnesota, N.A.
000 Xxxxx Xxxxxxx Xxxxxxxx
Xxxxx Xx. Xxxx, XX 00000
(c) 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 shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 27, the Company may
and the Rights Agent shall, if the Company so directs, supplement or amend
any provision of this Agreement without the approval of any holders of
certificates representing Common Shares. Without limiting the foregoing, the
Company may at any time prior to such time as any Person becomes an Acquiring
Person amend this Agreement to lower the thresholds set forth in Sections
1(a) and 3(a) hereof from 15% to not less than 10%, with appropriate
exceptions for persons then beneficially owning Common Shares of the Company
constituting a percentage of the number of Common Shares then outstanding
equal to or in excess of the new threshold. From and after the Distribution
Date and subject to the penultimate sentence of this Section 27, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend
this Agreement without the approval of any holders of Right Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect
the interests of the holders of Right Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); provided, that
from and after the Distribution Date this Agreement may not be supplemented
or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which reduces the then effective
Redemption Price or moves to an earlier date the then effective Final
Expiration Date. Prior to the Distribution Date, the interests of the holders
of Rights shall be deemed coincident with the interests of the holders of
Common Shares.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
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. 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 31. 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 Wisconsin and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
SECTION 32. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. 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 Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board or to the Company, or
as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (a) interpret the
provisions of this Agreement, and (b) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement
and any determination as to whether actions or any Person shall be such as to
cause such Person to beneficially own shares held by another Person). All
such actions, calculations, interpretations and determinations (including,
for purposes of clause (ii) below, all omissions with respect to the
foregoing) which are done or made by the Board of the Company in good faith,
shall (i) be final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights and all other parties, and (ii) not subject the
Board of the Company to any liability to the holders of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above
written.
CHORUS COMMUNICATIONS GROUP, LTD.
Attest:
By: /s/Xxxx X. Xxxxx By: /s/Xxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxx Xxxxx X. Xxxxxxxxxx
Title: President & Title: Vice President, Secretary
Chief Executive Officer and General Council
NORWEST BANK MINNESOTA , N.A.
Attest:
By: /s/Xxxxxx Xxxxxx By: /s/Xxxxx Van Dell
Xxxxxx Xxxxxx Xxxxx Van Dell
Title: Account Manager Title: Assistant Vice President
=====================
EXHIBIT A
=====================
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER March 22, 2010 (SUBJECT TO EXTENSION) OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
CHORUS COMMUNICATIONS GROUP, LTD.
This certifies that ________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agreement, dated as of March 22, 2000, and as such agreement
may be amended (the "Rights Agreement"), between Chorus Communications Group,
Ltd., a Wisconsin corporation (the "Company"), and Norwest Bank Minnesota,
N.A., a national banking association (the "Rights Agent"), to purchase from
the Company at any time after the Distribution Date (as such term is defined
in the Rights Agreement) and prior to 5:00 P.M., Madison, Wisconsin time,
on March 22, 2010, subject to extension, at the principal office of the
Rights Agent, or at the office of its successor as Rights Agent, one-half
of one fully paid nonassessable (except as otherwise provided by any
corporation law applicable to the Company) share of common stock, no par
value ("Common Shares"), of the Company, at a purchase price of $120 per
Common Share (the "Purchase Price") (equivalent to $60 for each one-half of
a Common Share), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Right Certificate (and the number of Common Shares which
may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of March 31,
2000, based on the Common Shares as constituted at such date. Rights may only
be exercised in integral multiples of two. As provided in the Rights
Agreement, the Purchase Price and the number of Common 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.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Common Shares 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 Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.001 per Right or (ii) may be exchanged in whole or in part for Common
Shares. The Board of Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, but prior to such Person's
acquisition of 50% or more of the outstanding Common Shares, exchange the
Rights evidenced by the Certificate for Common Shares, at an exchange ratio
of one Common Share per Right, subject to adjustment, as provided in the
Rights Agreement.
No fractional Common Shares will be issued upon the exercise of any Right or
Rights evidenced hereby, but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. No Rights may be exercised that would
entitle the holder to any fraction of a Common Share greater than one-half of
a Common Share unless concurrently therewith such holder purchases an
additional fraction of a Common Share which, when added to the number of
Common Shares to be received upon such exercise, equals an integral number of
Common Shares, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Common 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 Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a shareowner of the Company or any right to vote for the election
of directors or upon any matter submitted to shareowners at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareowners (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of ____________, ____.
ATTEST: CHORUS COMMMUNICATIONS GROUP, LTD.
__________________________________ By: _______________________________
Title: ________________________
Countersigned:
NORWEST BANK MINNESOTA, N.A.
By: _______________________________
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder desires to transfer
the Right Certificate.)
FOR VALUE RECEIVED _______________________________ hereby sells, assigns and
transfers unto___________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________
Attorney, to transfer the within Right Certificate on the books of the
within- named Company, with full power of substitution.
Dated: ____________, ____
--------------------------------------------
Signature
Signature Guaranteed:
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
-------------------------------------
Signature
---------------------------------------------------------------------
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: CHORUS COMMUNICATIONS GROUP LTD.
The undersigned hereby irrevocably elects to exercise __________________
Rights represented by this Right Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that certificates for
such Common Shares be issued in the name of:
Please insert social security
or other identifying number
---------------------------------------------------------------------
(Please print name and address)
---------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
---------------------------------------------------------------------
(Please print name and address)
---------------------------------------------------------------------
Dated: ____________, ____
--------------------------------------
Signature
Signature Medallion Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
[Form of Reverse Side of Right Certificate -- continued]
---------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
-------------------------------------
Signature
---------------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election 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
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.
=====================
EXHIBIT B
=====================
CHORUS COMMUNICATIONS GROUP LTD.
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On March 22, 2000, the Board of Directors of Chorus Communications Group
Ltd. (the "Company") declared a dividend of one common share purchase right
(a "Right") for each outstanding share of common stock, no par value (the
"Common Shares"), of the Company. The dividend is payable upon the close of
business on March 31, 2000 to the shareowners of record on that date (the
"Record Date"). Each Right entitles the registered holder to purchase from
the Company one-half of one Common Share, at a price of $120 per Common Share
(equivalent to $60 for each one-half of a Common Share), subject to
adjustment (the "Purchase Price"). The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and [Norwest Bank Minnesota, N.A.], as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (other than the
Company, a subsidiary of the Company or an employee benefit plan of the
Company or a subsidiary) (an "Acquiring Person") has acquired beneficial
ownership of 15% or more of the outstanding Common Shares (the "Shares
Acquisition Date") or (ii) 10 business days (or such later date as may be
determined by action of the Company's Board of Directors prior to such time
as any person becomes an Acquiring Person) following the commencement of, 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 (other than the Company, a subsidiary of the Company or an employee
benefit plan of the Company or a subsidiary) of 15% or more of such
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record Date, by such
Common Share certificate.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date, upon transfer or new
issuance of Common Shares, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares, outstanding as of the Record Date, even without such notation,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("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. No less than two
Rights, and only integral multiples of two Rights, may be exercised at any
one time by any holder of Rights. The Rights will expire on March 22, 2010
(the "Final Expiration Date"), unless the Rights are earlier redeemed or
exchanged by the Company, or the Rights Agreement is amended, in each case as
described below.
The Purchase Price payable, and the number of Common 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 Common
Shares, (ii) upon the grant to holders of the Common Shares of certain rights
or warrants to subscribe for or purchase Common Shares at a price, or
securities convertible into Common Shares with a conversion price, less than
the then current market price of the Common Shares or (iii) upon the
distribution to holders of the Common Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends or dividends payable in
Common Shares) or of subscription rights or warrants (other than those
referred to above).
In the event that any person becomes an Acquiring Person (a "Flip-In Event"),
holders of Rights (except as otherwise provided in the Rights Agreement) will
thereafter have the right to receive upon exercise that number of Common
Shares (or, in certain circumstances cash, property or other securities of
the Company or a reduction in the Purchase Price) having a market value of
two times the then current Purchase Price. Notwithstanding any of the
foregoing, following the occurrence of a Flip-In Event all Rights that are,
or (under certain circumstances specified in the Rights Agreement) were, or
subsequently become beneficially owned by an Acquiring Person, related
persons and transferees will be null and void.
In the event that, at any time following the Shares Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction or
(ii) 50% or more of its consolidated assets or earning power are sold (the
events described in clauses (i) and (ii) are herein referred to as "Flip-Over
Events"), proper provision will be made so that holders of Rights (except as
otherwise provided in the Rights Agreement) will thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, that
number of shares of common stock of the acquiring company which at the time
of such transaction will have a market value of two times the then current
Purchase Price.
With certain exceptions, 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 Common Shares will be issued. In lieu of
fractional Common Shares equal to one-half of a Common Share or less, an
adjustment in cash will be made based on the market price of the Common
Shares on the last trading day prior to the date of exercise. No Rights may
be exercised that would entitle the holder thereof to any fractional Common
Share greater than one-half of a Common Share unless concurrently therewith
such holder purchases an additional fraction of a Common Share which when
added to the number of Common Shares to be received upon such exercise,
equals an integral number of Common Shares.
The Purchase Price is payable by certified check, cashier's check, bank draft
or money order or, if so provided by the Company, the Purchase Price
following the occurrence of a Flip-In Event and until the first occurrence of
a Flip-Over Event may be paid in Common Shares having an equivalent value.
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 of the Company may exchange the Rights (other
than Rights owned by any Acquiring Person which have become void), in whole
or in part, at an exchange ratio of one Common Share (or of a share of a
class or series of the Company's preferred stock, if any, having equivalent
rights, preferences and privileges) per Right (subject to adjustment).
At any time prior to a person becoming an Acquiring Person, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $.001 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Other than provisions relating to certain principal economic terms of the
Rights, the terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including an
amendment to lower the threshold for exercisability of the Rights from 15% to
not less than 10%, with appropriate exceptions for any person then
beneficially owning a percentage of the number of Common Shares then
outstanding equal to or in excess of the new threshold, except that from and
after the Distribution Date no such amendment may adversely affect the
interests of the holders of the Rights. The Rights may also be amended to
extend the expiration date thereof.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareowner of the Company, including, without limitation, the right to
vote or to receive dividends.
The Company has filed a copy of the Rights Agreement with the Securities and
Exchange Commission as an Exhibit to a report on Form 8-K filed with respect
to the Rights. A copy of the Rights Agreement is also 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
Rights Agreement, which is hereby incorporated herein by reference.
