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EXHIBIT 5
GARDEN RIDGE CORPORATION
and
XXXXX XXXXXX SHAREHOLDER SERVICES, L.L.C.
Rights Agent
AMENDED AND RESTATED RIGHTS AGREEMENT
Dated as of July 14, 1999
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TABLE OF CONTENTS
Section 1. CERTAIN DEFINITIONS...............................................1
Section 2. APPOINTMENT OF RIGHTS AGENT.......................................6
Section 3. ISSUANCE OF RIGHT CERTIFICATES....................................6
Section 4. FORM OF RIGHT CERTIFICATES........................................8
Section 5. EXECUTION, AUTHENTICATION AND DELIVERY............................9
Section 6. REGISTRATION.....................................................10
Section 7. MUTILATED, DESTROYED, LOST AND STOLEN RIGHT CERTIFICATES.........10
Section 8. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS....11
Section 9. CANCELLATION OF RIGHT CERTIFICATES...............................13
Section 10. AUTHORIZATION OF SHARES.........................................13
Section 11. RECORD DATE.....................................................13
Section 12. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS.....................................................14
Section 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES......19
Section 14. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.................................................19
Section 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.........................21
Section 16. RIGHTS OF ACTION................................................22
Section 17. AGREEMENT OF RIGHT HOLDERS......................................22
Section 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER...............23
Section 19. CONCERNING THE RIGHTS AGENT.....................................23
Section 20. DUTIES OF RIGHTS AGENT..........................................24
Section 21. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.......26
Section 22. CHANGE OF RIGHTS AGENT..........................................27
Section 23. ISSUANCE OF NEW RIGHT CERTIFICATES..............................27
Section 24. REDEMPTION......................................................28
Section 25. MANDATORY REDEMPTION AND EXCHANGE...............................29
Section 26. NOTICE OF CERTAIN EVENTS........................................30
Section 27. NOTICES.........................................................31
Section 29. SUPPLEMENTS AND AMENDMENTS......................................31
Section 30. SUCCESSORS......................................................32
Section 31. BENEFITS OF THIS AGREEMENT......................................32
Section 32. SEVERABILITY....................................................32
Section 33. GOVERNING LAW...................................................32
Section 34. COUNTERPARTS....................................................32
Section 35. DESCRIPTIVE HEADINGS............................................32
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AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement, dated as of July 14, 1999, is
between Garden Ridge Corporation, a Delaware corporation (the "COMPANY"), and
Xxxxx Xxxxxx Shareholder Services, L.L.C., as Rights Agent.
WHEREAS, effective on June 4. 1997, the Board of Directors of the Company
authorized and directed the issuance to the holders of record of Common Shares
of the Company outstanding at the close of business on June 17, 1997 (the
"Record Date") of one Right with respect to each Common Share of the Company
outstanding on the Record Date, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earlier of the Distribution Date,
the Redemption Date and the Final Expiration Date; and
WHEREAS, the Board of Directors has authorized and directed the Company
to amend the Rights Agreement dated June 4, 1997 between the Company and the
Rights Agent in order better to preserve the ability of the Board of Directors
of the Company to ensure that the long-term strategic plans of the Company are
effected in a manner that the Board of Directors believes is in the best
interests of the Company and its shareholders and will maximize the value of
the shares of the Company's outstanding capital stock;
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"ACQUIRING PERSON" shall mean:
(i) any Person who or which, together with all Affiliates and Associates
of such Person, shall be the Beneficial Owner of 25% or more of the Voting
Shares of the Company then outstanding, but shall not include the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any trustee of or fiduciary with respect to any
such plan when acting in such capacity.
(ii) notwithstanding the foregoing parts of this definition, no Person
shall become an "Acquiring Person" as the result of an acquisition of Voting
Shares by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 25% or more of the Voting Shares of the Company then outstanding; PROVIDED,
HOWEVER that, if a Person shall become the Beneficial Owner of 25% or more of
the Voting Shares of the Company then outstanding by reason of share purchases
by the Company and shall after such share purchases by the Company and at a
time when such Person is the Beneficial Owner
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of 25% or more of the Voting Shares of the Company then outstanding, become the
Beneficial Owner of any additional Voting Shares of the Company, then such
Person shall be deemed to be an "Acquiring Person."
(iii) notwithstanding the foregoing parts of this definition, 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 parts (i) and
(ii) of this definition has become such inadvertently, and such Person divests
a sufficient number of Voting Shares so that such Person would no longer be an
"Acquiring Person," by such deadline as the Board of Directors shall set, then
such Person shall not be deemed to be an "Acquiring Person" for any purposes of
this Agreement.
"AGREEMENT" shall mean this Rights Agreement as hereafter amended from
time to time.
"AFFILIATE" and "ASSOCIATE" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement.
"BENEFICIAL OWNER" shall mean, with respect to any security, any Person
who is deemed to be a "Beneficial Owner" of, or is deemed to "own beneficially"
such security. A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "own beneficially" any securities that (without duplication):
(i) such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, within the meaning of either Section
13 or 16 of the Exchange Act;
(ii) 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; or (B) the right
to vote pursuant to any agreement, arrangement or understanding; or
(iii) are beneficially owned, directly or indirectly, by any other Person
with which such Person or any of such Person's Affiliates or Associates has any
agreement arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding voting or
disposing of any securities of the Company; PROVIDED, HOWEVER, that, for
purposes of each clause of this definition, a Person shall not be deemed the
Beneficial Owner of, or to own beneficially, 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; and PROVIDED, FURTHER, that, for purposes of each
clause of this definition, a Person shall not be deemed the Beneficial Owner
of, or to own beneficially, any security as a result
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of any agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report).
Notwithstanding anything in this definition to the contrary, the phrase
"then outstanding," when used with respect to a Beneficial Owner of securities
of the Company (or to the number of such securities "beneficially owned"),
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.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in the State of Texas are authorized or obligated
by law or executive order to close.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m., Houston time,
on such date; PROVIDED, HOWEVER, that if such date is not a Business Day it
shall mean 5:00 p.m., Houston time, on the next succeeding Business Day.
"CLOSING PRICE," with respect to any security, shall mean the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the Nasdaq National Market or such
other system then in use, or, in case such security is not then listed on such
system, then the last sale price, regular way, on a specific Trading Day or, in
case no such sale takes place on such Trading 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 such security is listed or
admitted to trading or, if such security is not then listed or admitted to
trading on any national securities exchange, or, if on any such Trading Day
such security is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in such security selected by the Board of Directors of the Company. If
such security is not publicly held or so listed or traded, "Closing Price"
shall mean the fair value per unit of such security as determined in good faith
by the Board of Directors of the Company, whose determination shall be
described and the Closing Price set forth in a statement filed with Rights
Agent.
"COMMON SHARES" when used with respect to the Company shall mean shares
of capital stock of the Company which have no preference over any other class
of stock with respect to dividends or assets, which are not redeemable at the
option of the Company and with respect to which no sinking, purchase or similar
fund is provided and shall initially mean the shares of common stock, having a
par value of $0.01 per share, of the Company. "Common Shares" when used with
reference to any Person other than the Company shall, if used with reference to
a corporation, mean the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
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first-mentioned Person and, if used with reference to any other Person, mean
the equity interest in such Person (or, if the net worth determined in
accordance with generally accepted accounting principles of another Person
(other than an individual) which controls such first-mentioned Person is
greater than such first-mentioned Person, then such other Person) with the
greatest voting power or managerial power with respect to the business and
affairs of such Person.
"COMPANY" shall mean Garden Ridge Corporation, a Delaware corporation, and
its successors.
"COMPANY ORDER" means a written request or order signed in the name of
the Company by its Chairman of the Board, its Chief Executive Officer, or
President or a Vice President, and by its Chief Financial Officer, Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Rights Agent.
"CORPORATE TRUST OFFICE" means the principal office of the Rights Agent
at which it administers its corporate trust business, which, in the case of
Xxxxx Xxxxxx Shareholder Services, L.L.C., shall, until hereafter changed, be
its office at 00 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000-0000.
"DISTRIBUTION DATE" shall mean the earlier of (i) the tenth Business Day
after the Shares Acquisition Date and (ii) the tenth Business Day (or such
later date as may be determined by action of the Board of Directors prior to
such time as any Person becomes an Acquiring Person) after the date of
commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any trustee of or fiduciary with respect to any such plan when
acting in such capacity) of, or after the date of the first public announcement
of the intent of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any trustee of or fiduciary with respect to any such plan when
acting in such capacity) to commence a tender or exchange offer, the
consummation of which would result in any Person becoming the Beneficial Owner
of 25% or more of the then outstanding Voting Shares of the Company; PROVIDED,
HOWEVER, that an occurrence described in clause (ii) of this definition above
shall not cause the occurrence of the Distribution Date if the Board of
Directors of the Company shall, prior to such tenth Business Day (or such later
date as described in clause (ii) above), determine that such tender or exchange
offer is spurious, unless, thereafter, the Board of Directors of the Company
shall make a contrary determination, in which event the Distribution Date shall
occur on the later to occur of such tenth Business Day (or such later date as
described in clause (ii) above) and the date of such latter determination.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute thereto.
"FINAL EXPIRATION DATE" shall mean the Close of Business on June 3, 2007.
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"PERSON" shall mean any individual, firm, corporation, partnership,
limited partnership, limited liability company, trust or other entity, and
shall include any successor (by merger or otherwise) of such entity.
"PREFERRED SHARE" shall mean one share of Series A Junior Participating
Preferred Stock issued by the Company having the rights and qualifications
described in EXHIBIT B.
"PURCHASE PRICE" shall mean the initial price at which the holder of a
Right may, subject to the terms and conditions of this Agreement, purchase one
Unit of a Preferred Share (which initial price is set forth in Section 8(b)
hereof), as such price shall be adjusted pursuant to the terms of this
Agreement.
"REDEMPTION DATE" shall mean the time at which the Rights are redeemed
pursuant to Section 24 herein or the time at which all of the Rights are
mandatorily redeemed and exchanged pursuant to Section 25 hereof.
"REDEMPTION PRICE" shall have the meaning specified in Section 24(b)
herein.
"RIGHT" shall mean one Preferred Share purchase right which initially
represents the right of the registered holder thereof to purchase one Unit of a
Preferred Share upon the terms and subject to the conditions herein set forth.
"RIGHT CERTIFICATE" shall mean a certificate, in substantially the form
of EXHIBIT A attached to this Rights Agreement, evidencing the Rights
registered in the name of the holder thereof.
"RIGHTS AGENT" shall mean Xxxxx Xxxxxx Shareholder Services, L.L.C. and
any successor thereto appointed in accordance with the terms hereof, in its
capacity as agent for the Company and the holders of the Rights pursuant to
this Agreement.
"RIGHTS REGISTER" and "RIGHTS REGISTRAR" shall have the meanings
specified in Section 6.
"SECTION 12(A)(II) EVENT" shall mean the event described in Section
12(a)(ii) hereof.
"SECTION 14 EVENT" shall mean the event described in Section 14 hereof.
"SHARES ACQUISITION DATE" shall mean the first date of public
announcement (which for purposes of this definition shall include without
limitation a report filed pursuant to Section 13(d) or Section 16(a) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such.
"SUBSIDIARY" of any Person shall mean any corporation or other entity of
which a majority of the outstanding capital stock or other equity interests
having ordinary voting power in the election of directors or similar officials
is owned, directly or indirectly, by such Person.
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"SUMMARY OF RIGHTS" shall mean a Summary of Rights to Purchase Preferred
Shares in substantially the form attached as EXHIBIT C to this Agreement.
"TRADING DAY" shall mean a day on which the principal national securities
exchange on which any of the Voting Shares of the Company are listed or
admitted to trading is open for the transaction of business or, if none of the
Voting Shares of the Company is listed or admitted to trading on any national
stock exchange, a Business Day.
"TRIGGERING EVENT" shall mean the Section 12(a)(ii) Event or any Section
14 Event.
"UNIT" shall, with respect to the Preferred Shares, mean one
one-thousandth (1/1000th) of a share.
"VOTING SHARES" shall mean (i) the Common Shares of the Company and (ii)
any other shares of capital stock of the Company entitled to vote generally in
the election of directors or entitled to vote together with the Common Shares
in respect of any merger or consolidation of the Company, any sale of all or
substantially all of the Company's assets or any liquidation, dissolution or
winding up of the Company. Whenever any provision of this Agreement requires a
determination of whether a number of Voting Shares comprising a specified
percentage of such Voting Shares is, was or will be beneficially owned or has
been voted, tendered, acquired, sold or otherwise disposed of, or a
determination of whether a Person has offered or proposed to acquire a number
of Voting Shares comprising such specified percentage, the number of Voting
Shares comprising such specified percentage of Voting Shares shall in every
such case be deemed to be the number of Voting Shares comprising the specified
percentage of all the Company's then outstanding Voting Shares.
"WHOLLY-OWNED SUBSIDIARY" of a Person shall mean any corporation or other
entity all the outstanding capital stock or other equity interests of which
having ordinary voting power in the election of directors or similar officials
are 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 in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co- Rights Agents as it may deem
necessary or desirable upon prior written notice to the Rights Agent. In the
event the Company appoints one or more co-Rights Agents, the respective duties
of the Rights Agent and any co-Rights Agents shall be determined by the Company
with the consent of the Rights Agent, which consent shall not be unreasonably
withheld. The Rights Agent shall have no duty to supervise, and shall in no
event be liable for, the acts or omissions of any such co-Rights Agent.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) From and after June 17, 1997, until the earliest of the Distribution
Date, the Redemption Date, and the Final Expiration Date (i) outstanding Rights
will be evidenced (subject to the provisions of paragraph (b) of this Section
3)
by the certificates for outstanding Common Shares of
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the Company and not by separate Right Certificates, and (ii) the Rights (and
the right to receive Right Certificates therefore) will be transferable only in
connection with the transfer of Common Shares of the Company. As soon as
practicable after the Distribution Date, the Rights Agent will send, by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the stock transfer records of the Company,
a Right Certificate evidencing one Right for each Common Share of the Company
so held, subject to adjustment as provided herein. From and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On June 17, 1997, or as soon thereafter as practicable, the Company
will send a copy of a Summary of Rights, by first-class, postage-prepaid mail,
to each record holder of Common Shares of the Company as of the Close of
Business on the Record Date, at the address of such holder shown on the stock
transfer records of the Company. With respect to Common Shares of the Company
outstanding on the Record Date, the certificates evidencing such Common Shares
of the Company shall, together with copies of such Summary of Rights,
thereafter also evidence the outstanding Rights (as such Rights may be amended
or supplemented) distributed with respect thereto until the earlier of the
Distribution Date or the date of surrender thereof to the Company's transfer
agent for registration of transfer or exchange of Common Shares of the Company.
Until the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date), the surrender for registration of transfer or exchange of any
certificate for Common Shares of the Company in respect of which Rights have
been issued, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the surrender for registration of transfer or exchange of
the outstanding Rights associated with the Common Shares of the Company
represented thereby.
(c) The Company agrees that, at any time after the Record Date and prior
to the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date, at which it issues any of its Common Shares upon original
issue or out of treasury, it will concurrently distribute to the holder of such
Common Shares one Right for each such Common Share.
(d) Certificates for Common Shares of the Company issued after the Record
Date but prior to the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date, whether upon registration of transfer or
exchange of Common Shares outstanding on the Record Date or upon original issue
or out of treasury thereafter, shall have impressed on, printed on, written on
or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Garden Ridge
Corporation and Xxxxx Xxxxxx Shareholder Services, L.L.C. dated as of
June 4, 1997 (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 Garden Ridge Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by
this certificate. Garden Ridge Corporation will mail to the holder of
this certificate a copy of the Rights
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Agreement without charge after receipt of a written request therefor. As
described in the Rights Agreement, Rights issued to or acquired by any
Acquiring Person or any Affiliate or Associate thereof (each as defined
in the Rights Agreement) shall, under certain circumstances, become null
and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, outstanding Rights associated with the Common Shares of the
Company represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Shares of the Company shall
also be the registered holders of the associated Rights, and the surrender of
any such certificate for registration of transfer or exchange of the Common
Shares of the Company evidenced thereby shall also constitute surrender for
registration of transfer or exchange of outstanding Rights (as such Rights may
be amended or supplemented) associated with the Common Shares of the Company
represented thereby.
(e) If the Company purchases or acquires any of its Common Shares after
the Record Date prior to the earliest of the Distribution Date, the Redemption
Date, and the Final Expiration Date, any Rights associated with such Common
Shares shall be deemed canceled and retired so that the Company shall not be
entitled to exercise any Rights associated with such Common Shares which are no
longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. The form of Right Certificates
(and the forms of election to purchase and of assignment to be printed on the
reverse thereof) shall in form and substance 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 as may be
necessary to conform to usage. The Right Certificates shall be in a machine
printable format and in a form reasonably satisfactory to the Rights Agent.
Subject to the provisions of Section 23 hereof, the Right Certificates,
whenever issued, shall be dated as of the date of authentication thereof, but,
regardless of any adjustments of the Purchase Price or the number of Preferred
Shares (or other securities) as to which a Right is exercisable (whether
pursuant to this Agreement or any future amendments or supplements to this
Agreement), or both, occurring after the Record Date and prior to the date of
such authentication, such Right certificates may, on their face, without
invalidating or otherwise affecting any such adjustment, expressly entitle the
holders thereof to purchase such number of Preferred Shares at the Purchase
Price per Unit of a Preferred Share as to which a Right would be exercisable if
the Distribution Date were the Record Date; no adjustment of the Purchase Price
or the number of Preferred Shares (or other securities) as to which a Right is
exercisable, or both, effected subsequent to the date of authentication of any
Right Certificate shall be invalidated or otherwise affected by the fact that
such adjustment is not expressly reflected on the face or in the provisions of
such Right Certificate.
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Pending the preparation of definitive Right Certificates, the Company may
execute, and upon Company Order the Rights Agent shall authenticate and send,
at the Company's expense, by first-class, insured, postage-prepaid mail to each
record holder of Common Shares of the Company as of the Close of Business on
the Distribution Date, temporary Right Certificates which are printed,
lithographed, typewritten, mimeographed or otherwise produced substantially of
the tenor of the definitive Right Certificates in lieu of which they are issued
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Right Certificates may determine, as
evidenced by their execution of such Right Certificates. If temporary Right
Certificates are issued, the Company will cause definitive Right Certificates
to be prepared without unreasonable delay. After the preparation of definitive
Right Certificates, the temporary Right Certificates shall be exchangeable for
definitive Right Certificates, upon surrender of the temporary Right
Certificates at the Corporate Trust Office of the Rights Agent, without charge
to the holder. Upon surrender for cancellation of any one or more temporary
Right Certificates, the Company shall execute and the Rights Agent shall
authenticate and deliver in exchange therefor one or more definitive Right
Certificates, evidencing a like number of Rights. Until so exchanged, the
temporary Right Certificates shall in all respects be entitled to the same
benefits under this Agreement as definitive Right Certificates.
Section 5. EXECUTION, AUTHENTICATION AND DELIVERY. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, Chief
Executive Officer, President, Chief Operating Officer, Chief Financial Officer,
or one of its Vice Presidents (including any Executive Vice President or Senior
Vice President), under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Right Certificates may be manual or facsimile.
Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. Any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates; and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as in
this Agreement provided and not otherwise.
No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Right Certificate a certificate of authentication substantially in the
form provided for herein executed by the Rights Agent by manual signature of an
authorized signatory, which need not be the same authorized signatory for all
of the Right Certificates, and such certificate upon any Right Certificate
shall be conclusive evidence, and the only evidence, that such Right
Certificate has been duly authenticated and delivered hereunder.
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Section 6. REGISTRATION. From and after the Distribution Date and prior
to the earlier of the Redemption Date and the Final Expiration Date, the
Company shall cause to be kept at the Corporate Trust Office of the Rights
Agent a Rights Register (a "Rights Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Right Certificates and of transfers of Rights. The Rights Agent
is hereby appointed the registrar and transfer agent (the "Rights Registrar")
for the purpose of registering Right Certificates and transfers of Rights as
herein provided and the Rights Agent agrees to maintain such Rights Register in
accordance with such regulations so long as it continues to be designated as
Rights Registrar hereunder. Upon surrender to the Rights Agent for registration
of transfer of any Right Certificate, the Company shall execute, and the Rights
Agent shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Right Certificates evidencing a like number of
Rights.
At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates which the holder making the
exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing. No service charge
shall be made for any registration of transfer or exchange of Right
Certificates, but the Company may require payment by the holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer.
The provisions of this Section 6 shall be subject to the provisions of
Section 15.
Section 7. MUTILATED, DESTROYED, LOST AND STOLEN RIGHT CERTIFICATES. If
any mutilated Right Certificate is surrendered to the Rights Agent, along with
a signature guarantee and such other and further documentation as the Rights
Agent may reasonably request, the Company shall execute and the Rights Agent
shall authenticate and deliver in exchange therefor a new Right Certificate of
like tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.
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If there shall be delivered to the Company and the Rights Agent (i)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (ii) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Rights Agent that such Right
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Right Certificate, a new Right
Certificate of like tenor, for a like number of Rights and bearing a
registration number not contemporaneously outstanding.
Upon the issuance of any new Right Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.
Every new Right Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Right Certificate shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Right Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Right Certificates duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Right Certificates.
Section 8. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) 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 and the certificate on the
reverse side thereof duly executed, to the Rights Agent at its Corporate Trust
Office, together with payment of the Purchase Price for each Unit of a
Preferred Share (or other securities) as to which the Rights are exercised,
prior to the earliest of (i) the Close of Business on the Final Expiration
Date, (ii) the time of redemption on the Redemption Date and (iii) the time at
which such Rights are mandatorily redeemed and exchanged as provided in Section
25 hereof.
(b) The Purchase Price for each Unit of a Preferred Share pursuant to the
exercise of a Right shall initially be Fifty Dollars ($50.00), shall be subject
to adjustment from time to time as provided in Sections 12 and 14 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 and the certificate duly executed,
accompanied by payment of the Purchase Price for the securities to be purchased
and an amount equal to any applicable transfer tax required to be
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paid by the holder of such Right Certificate in accordance with Section 10 in
cash, or by certified check or cashier's check payable to the order of the
Company, together with such other and further documentation as the Rights Agent
may reasonably require, the Rights Agent shall thereupon promptly (i)
requisition from any transfer agent of the Preferred Shares (or other
securities) certificates for such number of Units of a Preferred Share (or
other securities) as are to be purchased and registered in such name or names
as may be designated by the registered holder of such Right Certificate or, if
appropriate, in the name of a depositary agent or its nominee, 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 shares in accordance with
Section 15, (iii) promptly after receipt of such certificates registered in
such name or names as may be designated by such holder, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate and (iv) when appropriate, after receipt, promptly deliver such
cash to or upon the order of such holder.
(d) If the registered holder of the Right Certificate shall exercise less
than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equal 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 15 hereof.
(e) Notwithstanding any other provision of this Agreement, from and after
the occurrence of the Section 12(a)(ii) Event, any Rights that are or were
acquired or beneficially owned by (i) any such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person), (ii) a transferee of any such
Acquiring Person (or of any such Associate or Affiliate of such Acquiring
Person) who becomes a transferee after such Acquiring Person becomes such, or
(iii) a transferee of any such Acquiring Person (or of any such Associate or
Affiliate of such Acquiring Person) who becomes a transferee prior to or
concurrently with such Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement, or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 8(e), shall be null and 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
this Agreement that represents Rights beneficially owned by an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence or by
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 null and void pursuant to the preceding sentence or to any Associate or
Affiliate thereof or to any nominee (acting in its capacity as such) 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
null and void pursuant to the preceding sentence or to any Associate or
Affiliate thereof or to any nominee (acting in its capacity as such) of such
Acquiring Person, Associate or Affiliate shall be canceled.
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Section 9. CANCELLATION 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 any of its agents, be
delivered to the Rights Agent for such purpose and for cancellation or, if
surrendered to the Rights Agent for such purpose, shall be canceled by it. No
Right Certificates shall be authenticated in lieu of or in exchange for any
Right Certificates canceled as provided in this Section 9 except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 10. AUTHORIZATION OF SHARES. The Company covenants and agrees
that it will cause to be reserved and kept available out of its authorized and
unissued Preferred Shares or any Preferred Shares held in its treasury (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Shares and/or other securities or out of its
authorized and issued shares held in its treasury), the number of Preferred
Shares (and, following the occurrence of a Triggering Event, Common Shares
and/or other securities) that will be sufficient to permit the exercise of
outstanding Rights pursuant to the adjustments set forth in Section 12(a)(ii)
or Section 14 or otherwise until such time as the Rights become exercisable.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that each Unit of a Preferred Share (and, following the
occurrence of a Triggering Event, the Common Shares and/or other securities)
issued upon exercise of Rights shall (subject to payment of the Purchase Price)
be duly authorized, validly issued, fully paid and nonassessable. 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 certificates for a number
of Units of a Preferred Share upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable (i) in
respect of any transfer or delivery of Right Certificates to a Person other
than the registered holder of the Right Certificate evidencing Rights
surrendered for transfer or exercise, or (ii) in respect of the issuance or
delivery of certificates for a number of Units of a Preferred Share upon
exercise of Rights evidenced by Right Certificates in a name other than that of
the registered holder of the Right Certificate evidencing Rights surrendered
for transfer or exercise. Neither shall the Company be required to issue or
deliver any certificates for Preferred Shares of the Company 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
thereof) or until it has been established to the Company's satisfaction that no
such tax is due.
Section 11. RECORD DATE. Each Person in whose name any certificate for a
number of Units of a Preferred Share is issued upon the exercise of, or upon
mandatory redemption and exchange of, Rights shall for all purposes be deemed
to have become the holder of record of the Preferred Shares represented thereby
on, and such certificate shall be dated, (i) in the case of the exercise of
Rights,
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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, or (ii) in the case of the mandatory redemption and exchange
of Rights, the date of such mandatory redemption and exchange; PROVIDED,
HOWEVER, that, if the date of such surrender and payment or mandatory
redemption and exchange is a date upon which the transfer books of the Company
for its Preferred Shares (or Common Shares and/or other securities, as the case
may be) are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which such transfer books of the Company are open.
Prior to the exercise of (or the mandatory redemption and exchange of) the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a stockholder of the Company for which the Rights
shall be exercisable, including without limitation, the rights to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 12. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of shares of capital stock of
the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a dividend on any
outstanding Preferred Shares payable in Preferred Shares, (B) subdivide any
outstanding Preferred Shares, (C) combine any outstanding Preferred Shares into
a smaller number of Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 12(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 thereafter shall be entitled to receive, upon
payment of the Purchase Price for which a Right was exercisable immediately
prior to such date, the aggregate number and kind of shares of capital stock
which, if such Right had been duly exercised immediately prior to such date (at
a time when the transfer books of the Company were open), such holder would
have acquired upon such exercise and been entitled to receive upon payment or
effectuation of such dividend, subdivision, combination or reclassification. If
an event occurs which would require an adjustment under both Section 12(a)(i)
and Section 12(a)(ii), the adjustment provided for in this Section 12(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 12(a)(ii).
(ii) Subject to action of the Board of Directors of the Company pursuant
to Section 25 of this Agreement, if any Person shall become an Acquiring
Person, each Right will no longer represent the right to purchase Preferred
Shares of the Company, and each holder of a Right shall thereafter only have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price, 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 by the number of
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Units of a Preferred Share for which a Right is then exercisable, and (y)
dividing that product by fifty percent (50%) of the then current per share
market price of the Common Shares (determined pursuant to Section 12(d)) on the
date such Person became an Acquiring Person. If any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company shall
not take any action which would eliminate or diminish the benefits intended to
be afforded by the Rights.
(iii) In the event that there shall not be sufficient issued but not
outstanding, or authorized but unissued, Common Shares to permit the exercise
or exchange in full of all outstanding Rights in accordance with the foregoing
subparagraph (ii) or Section 25, the Company covenants that it shall take such
action as shall be necessary to ensure and provide, to the extent permitted by
applicable law and any agreements or instruments in effect on the Shares
Acquisition Date to which the Company is a party, that each Right shall
thereafter constitute the right to receive, in the Company's discretion, either
(A) in return for the Purchase Price, debt or equity securities (including, in
the Company's discretion, any available Common Shares) or other assets (or a
combination thereof) having a fair value equal to twice the Purchase Price, or
(B) if the Company elects to exchange the Rights in accordance with Section 25,
debt or equity securities (including, in the Company's discretion, any
available Common Shares) or other assets (or a combination thereof) having a
fair value equal to the product of the current per share market price of a
Preferred Share as of the Shares Acquisition Date (determined pursuant to
Section 12(d)) multiplied by the number of Preferred Shares that the holder of
the Rights would be entitled to receive from the Company in mandatory
redemption of, and in exchange for, the outstanding Rights pursuant to Section
25, where in any case set forth in (A) or (B) above the fair value of such debt
or equity securities or other assets shall be as determined in good faith by
the Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe
for or purchase Preferred Shares (or shares having the same rights privileges
and preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into or exchangeable for Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(together with any additional consideration required upon conversion or
exchange in the case of a security convertible into or exchangeable for
Preferred Shares or equivalent preferred shares), less than the then current
per share market price of the Preferred Shares (determined pursuant to Section
12(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 Preferred Shares outstanding on such record date plus
the number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be offered
(together with the aggregate of any additional consideration required upon
conversion or exchange in the case of any convertible or exchangeable
securities so to be offered) would purchase at such current per share market
price of the Preferred Shares and the denominator of which shall be the number
of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered
for subscription or
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purchase (or into or for which the convertible or exchangeable securities so to
be offered are initially convertible or exchangeable). In case all or part of
such subscription or purchase price may be paid 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. Preferred Shares owned by or held for
the account of the Company or any of its Subsidiaries shall not be deemed
outstanding for the purpose of any computation described in this Section 12(b).
The adjustment described in this Section 12(b) shall be made successively
whenever such a record date is fixed; and, if no such rights, options or
warrants are so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness 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 12(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
Preferred Shares (determined pursuant to Section 12(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 Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares. Such adjustments shall
be made successively whenever such a record date is fixed; and, if such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) 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 share of such Common Shares for the 30
consecutive Trading Days immediately prior to such date; PROVIDED, HOWEVER,
that, if the issuer of such Common Shares shall announce (A) a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, shall occur during such period of 30 Trading Days, then,
and in each such case, the current per share market price of the Common Shares
shall be appropriately adjusted to reflect the current market price per Common
Share equivalent.
(ii) For the purpose of any computation hereunder, the "current per share
market price" of the Preferred Shares shall be determined in the same manner as
set for the Common Shares in clause (i) of this Section 12(d). If the current
per share market price of the Preferred Shares cannot be determined in the
manner provided above or if the Preferred Shares are not publicly held or
listed
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or traded in a manner described in clause (i) of this Section 12(d), the
"current per share market price" of the Preferred Shares shall be conclusively
deemed to be an amount equal to 1000 (as such number shall be appropriately
adjusted for such events as stock splits, stock dividends, and
recapitalizations with respect to the Common Shares occurring after the date
hereof) multiplied by the current per share market price of the Common Shares.
For all purposes of this Agreement, the current per share market price of one
one-thousandth (1/1000th) of a Preferred Share shall be equal to one Preferred
Share divided by 1000.
(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
12(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 12
shall be made to the nearest cent or to the nearest ten-thousandth of a Common
Share or other share, as the case may be, and references herein to the "number
of Preferred Shares" (or similar phrases) shall be construed to include
fractions of a Preferred Share. Notwithstanding the first sentence of this
Section 12(e), any adjustment required by this Section 12 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment and (ii) the thirtieth day preceding the Final
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 12(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Preferred Shares, thereafter
the number of such other shares so receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares
contained in this Section 12, and the provisions of this Agreement, including
without limitation, Sections 8, 10, 11 and 14, with respect to the Preferred
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, whether or not the Right
Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
Units of a Preferred Share 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 12(i), upon each adjustment of the Purchase Price pursuant to Section
12(b) or 12(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price per Unit of a Preferred Share, that number of Units of a
Preferred Share obtained by first multiplying the number of Units of a
Preferred Share covered by a Right immediately prior to this adjustment by the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and second, dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
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(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights outstanding in lieu of any
adjustment in the number of Units of a Preferred Share purchasable upon the
exercise of a Right. Each Right outstanding after such adjustment of the number
of Rights shall be exercisable for the number of Units of a Preferred Share for
which a Right was exercisable immediately prior to such adjustment of the
Purchase Price. 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, along with simultaneous written notice to the
Rights Agent, 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. Until such record date, however, any adjustment in the number of
Units of a Preferred Share for which a Right shall be exercisable made as
required by this Agreement shall remain in effect. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 12(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 15 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 authenticated 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 Units of a Preferred Share issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of Units of a Preferred Share which
were expressed in the initial Right Certificates issued hereunder.
(k) In any case in which this Section 12 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of the
Preferred Shares or other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares or 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 securities upon the occurrence of the event requiring such
adjustment.
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(l) Anything in this Section 12 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 12, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) combination or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any of the Preferred Shares at less than the
current market price, (iii) issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, (iv) dividends payable in Preferred Shares or (iv) issuance
of rights, options or warrants referred to in subsection (b) of this Section
12, hereafter effected by the Company to holders of its Preferred Shares shall
not be taxable to such stockholders.
(m) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time prior to the Distribution Date (i)
declare a dividend on the outstanding Common Shares payable in Common Shares,
(ii) subdivide the outstanding Common Shares, (iii) combine the outstanding
Common Shares into a smaller number of shares or (iv) otherwise reclassify the
outstanding Common Shares, the number of Rights associated with each Common
Share then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionally adjusted so that the number of
Rights thereafter associated with each Common Share following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each Common Share immediately prior to such event by a fraction (the
"Adjustment Fraction"), the numerator of which shall be the total number of
Common Shares outstanding immediately prior to the occurrence of such event and
the denominator of which shall be the total number of Common Shares outstanding
immediately following the occurrence of such event. In lieu of such adjustment
in the number of Rights associated with one Common Share, the Company may elect
to adjust the number of Units of a Preferred Share purchasable upon the
exercise of one Right and the Purchase Price. If the Company makes such
election, the number of Rights associated with one Common Share shall remain
unchanged, and the number of Units of a Preferred Share purchasable upon
exercise of one Right and the Purchase Price shall be proportionally adjusted
so that (i) the number of Units of a Preferred Share purchasable upon exercise
of a Right following such adjustment shall equal the product of the number of
Units of a Preferred Share purchasable upon exercise of a Right immediately
prior to such adjustment multiplied by the Adjustment Fraction, and (ii) the
Purchase Price following such adjustment shall equal the product of the
Purchase Price immediately prior to such adjustment multiplied by the
Adjustment Fraction.
Section 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 12 or 14 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Preferred
Shares of the Company a copy of such certificate and (c) mail a brief summary
thereof to each holder of record of a Right Certificate in accordance with
Section 28 hereof.
Section 14. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. If, directly or indirectly, (a) the Company shall consolidate
with, or merge with and into, any other Person, (b) any Person shall merge with
and into the Company and the Company shall be the continuing or
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surviving corporation of such merger and, in connection with any such merger,
all or part of the Preferred Shares of the Company 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 (c) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer), in one
or a series of two or more transactions, assets of the Company or its
Subsidiaries which constitute more than 50% of the assets or which produce more
than 50% of the earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or any Affiliate or Associate of such Person other than
the Company or one or more of its Wholly Owned Subsidiaries, then, and in each
such case, the Company agrees that, as a condition to engaging in any such
transaction, it will make or cause to be made proper provision so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of such other Person
(including the Company as successor thereto or as the surviving corporation)
or, if such other Person is a Subsidiary of another Person, of the Person or
Persons (other than individuals) which ultimately control such first-mentioned
Person, as shall be equal to the result obtained by first multiplying the then
current Purchase Price by the number of Units of a Preferred Share for which a
Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 12(a)(ii)), and second dividing that
product by fifty percent (50%) of the current per share market price of the
Common Shares of such other Person (determined pursuant to Section 12(d)) on
the date of consummation of such consolidation, merger, sale or transfer; (ii)
the issuer of such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company," as used herein, shall thereafter be deemed to refer to such
issuer; and (iv) such issuer shall take such steps in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Preferred Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not enter into any transaction of the kind referred to in this
Section 14 if at the time of such transaction there are outstanding any rights,
warrants, instruments or securities or any agreement or arrangements which, as
a result of the consummation of such transaction, would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent an agreement supplemental to this Agreement
complying with the provisions of this Section 14. The provisions of this
Section 14 shall similarly apply to successive mergers or consolidations or
sales or other transfers. For the purposes of this Section 14, 50% of the
assets of the Company and its Subsidiaries shall be determined by reference to
the book value of such assets as set forth in the most recent consolidated
balance sheet of the Company and its Subsidiaries (which need not be audited)
and 50% of the earning power of the Company and its Subsidiaries shall be
determined by reference to the mathematical average of the operating income
resulting from the operations of the Company and its Subsidiaries for the two
most recent full fiscal years as set forth in the consolidated and
consolidating financial statements of the Company and its Subsidiaries for such
years; PROVIDED; HOWEVER, that if the Company has, during such period, engaged
in one or more transactions to which purchase accounting is applicable, such
determination shall be made by
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reference to the pro forma operating income of the Company and its Subsidiaries
giving effect to such transactions as if they had occurred at the commencement
of such two-year period.
Section 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue or distribute Right
Certificates which evidence fractional Rights. If, on the Distribution Date or
thereafter, as a result of any adjustment effected pursuant to Section 12(i) or
otherwise hereunder, a Person would otherwise be entitled to receive a Right
Certificate evidencing a fractional Right, the Company shall, in lieu thereof,
pay or cause to be paid to such Person an amount in cash equal to the same
fraction of the current market value of a whole Right. For the purposes of this
Section 15(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.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-thousandth
(1/1000th) of a Preferred Share) upon exercise of the Rights or to distribute
scrip or certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-thousandth (1/1000th) of a
Preferred Share). If, on the Distribution Date or thereafter, a Person would
otherwise be entitled to receive a fractional Preferred Share (other than
fractions which are integral multiples of one one-thousandth (1/1000th) of a
Preferred Share), the Company shall, in lieu thereof, pay to such Person at the
time such Right is exercised as herein provided an amount in cash equal to the
same fraction (which is not an integral multiple of one one-thousandth
(1/1000th) of a Preferred Share) of the current market value of one Preferred
Share. For purposes of this Section 15(b), the current market value of a
Preferred Share shall be Closing Price of a Common Share for the Trading Day
immediately prior to the date of such exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) or any
mandatory redemption and exchange contemplated by Section 25 occur, the Company
shall not be required to issue fractions of Preferred Shares upon exercise of
the Rights or to distribute scrip or certificates which evidence fractional
Preferred Shares. If after any such adjustment or mandatory redemption and
exchange, a Person would otherwise be entitled to receive a fractional
Preferred Share of the Company upon exercise of any Right Certificate or upon
mandatory redemption and exchange as contemplated by Section 25, the Company
shall, in lieu thereof, pay to such Person at the time such Right is exercised
as herein provided or upon such mandatory redemption and exchange an amount in
cash equal to the same fraction of the Closing Price of a Common Share for the
Trading Day immediately prior to the date of such exercise or the date of such
mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly waives his
right to receive any fractional Rights or any fractional shares upon exercise
or mandatory redemption and exchange of a Right (except as provided above).
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Section 16. RIGHTS OF ACTION.
(a) All rights of action in respect of the obligations and duties owed to
the holders of the Rights under this Agreement are vested in the registered
holders of the Rights; and, without the consent of the Rights Agent or of the
holder of any other Rights, any registered holder of any Rights may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding, judicial or otherwise, against the Company to
enforce, or otherwise to act in respect of, such holder's right to exercise
such Rights in the manner provided in the Right Certificate evidencing such
Rights 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.
(b) No right or remedy herein conferred upon or reserved to the
registered holder of Rights is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right
or remedy.
(c) No delay or omission of any registered holder of Rights to exercise
any right or remedy accruing hereunder shall impair any such right or remedy or
constitute a waiver of any default hereunder or an acquiescence therein. Every
right and remedy given hereunder or by law, to such holders may be exercised
from time to time, and as often as may be deemed expedient, by such holders.
Section 17. 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 of the Company;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the Corporate
Trust Office of the Rights Agent duly endorsed or accompanied by a proper
instrument of transfer, along with such other and further documentation as the
Rights Agent may reasonably request;
(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
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certificate made by anyone other than the Company or the Rights Agent) for all
purposes, and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; PROVIDED that the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder,
as such, of any Right (whether or not then evidenced by a Right Certificate)
shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of Preferred Shares of the Company or any other securities of the
Company which may at any time be issuable on the exercise (or mandatory
redemption and exchange) of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon any
such holder, as such, any of the rights of a stockholder of the Company,
including without limitation, any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, to give or
withhold consent to any corporate action, to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 26) or to
receive dividends or subscription rights until the Right or Rights evidenced by
such Right Certificate shall have been exercised (or mandatorily redeemed and
exchanged) in accordance with the provisions hereof.
Section 19. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to the
Rights Agent such compensation as shall be agreed to in writing between the
Company and the Rights Agent 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 expenses 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. In no
case will the Rights Agent be liable for special, indirect, incidental or
consequential loss or damage of any kind whatsoever (including, but not limited
to, lost profits), even if the Rights Agent has been advised of the possibility
of such loss or damage.
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 Common Shares of the Company or other securities of the
Company, Company Order, instrument of assignment or transfer, power of
attorney,
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endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
executed by the proper Person or Persons and, where necessary, verified or
acknowledged, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
The provisions of this Section 19 shall survive the expiration of the
Rights and the termination of this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent, 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 of its selection (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 any one of the Chairman of the Board,
the President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent, and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company or 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 authentication 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 have any responsibility with respect to
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or with respect to the validity or
execution of any Right Certificate (except its authentication 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 12(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
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thereof) provided for in Sections 3, 12, 14, 24 and 25, or the ascertainment 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 Preferred Shares, Common Shares, or other
securities to be issued pursuant to this Agreement or any Right Certificate or
as to whether any Preferred Shares, Common Shares, or other securities will,
when issued, be duly authorized, validly issued, fully paid and nonassessable;
nor shall the Rights Agent be responsible for the legality of the terms hereof
in its capacity as an administrative agent.
(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 President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Agreement and
the date on and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action taken
by, or omission of, the Rights Agent in accordance with a proposal included in
such application on or after the date specified in such application (which date
shall not be less than three Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company.
(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, omission, default, neglect or misconduct of any
such attorneys or agents or for any loss of the Company resulting from any such
act, omission,
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default, neglect or misconduct provided reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the portion of the form of assignment or form
of election to purchase (as the case may be) certifying that the Rights are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
has not been completed or indicates that such Rights are beneficially owned by
such Person, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without the written consent of the Company.
(l) In addition to the foregoing, the Rights Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or omitted by
it in connection with its administration of this Agreement if such acts or
omissions are in reliance upon (i) the proper execution of the certification
concerning beneficial ownership appended to the form of assignment and the form
of election to exercise attached to any Right Certificate unless the Rights
Agent shall have actual knowledge that, as executed, such certification is
untrue, or (ii) the non-execution of such certification including, without
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice of
any event or ownership which would prohibit the exercise or transfer of the
Right Certificates.
Section 21. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the 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 22. If at the time such
successor Rights Agent shall succeed to the agency created by this Agreement
any of the Right Certificates shall have been authenticated but not delivered,
any such successor Rights Agent may adopt the authentication of the predecessor
Rights Agent and deliver such Right Certificates so authenticated, and, if at
that time any of the Right Certificates shall not have been authenticated, any
successor Rights Agent may authenticate 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.
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If at any time the name of the Rights Agent shall be changed and at such
time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate 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 22. 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 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, by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. Notwithstanding the foregoing
provisions of this Section 22, in no event shall the resignation or removal of
a Rights Agent be effective until a successor Rights Agent shall have been
appointed and accepted such appointment. 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 registered holder of a Right
Certificate (or, prior to the Distribution Date, of Common Shares), then the
Rights Agent or any registered holder of a Right Certificate (or, prior to the
Distribution Date, of Common Shares) 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 either (A)
a corporation organized and doing business under the laws of the United States
or of any state of the United States, in good standing, authorized under such
laws to exercise corporate trust or stock transfer powers, and subject to
supervision or examination by federal or state authority and which has at the
time of its appointment a Rights Agent as combined capital and surplus of at
least $50 million or (B) an affiliate of such a corporation. 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 for the Company 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 22, 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 23. 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 per share and the number or kind or class of
shares
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or other securities purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.
Section 24. REDEMPTION.
(a) The Rights may be redeemed by action of the Board of Directors of the
Company pursuant to paragraph (b) of this Section 24, or may be redeemed and
exchanged by action of the Board of Directors of the Company pursuant to
Section 25 herein, but 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 the time any Person becomes an Acquiring Person redeem all but not
less than all the then outstanding Rights at a redemption price of one cent
($0.01) per Right then outstanding, appropriately adjusted to reflect any
adjustment in the number of Rights outstanding pursuant to Section 12(i) herein
(such redemption price being hereinafter referred to as the "Redemption
Price"). Any such 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, PROVIDED, however that
no such authorization may occur for a period of ninety (90) days after the date
of a change (resulting from a proxy or consent solicitation) in a majority of
the Directors in office at the commencement of such solicitation, PROVIDED,
FURTHER, that if any Person who is or was a participant in such solicitation
has stated (or if upon the commencement of such solicitation, a majority of the
Board of Directors of the Company has determined in good faith) that such
Person (or any of its Affiliates or Associates) has taken or intends to take,
or may consider taking, any action that would result in such Person becoming an
Acquiring Person, then the Rights may be so redeemed only if there are
Continuing Directors (as hereinafter defined) in office and such redemption is
authorized by a majority of such Continuing Directors. "Continuing Director"
shall mean (i) any member of the Board of Directors of the Company who, while
such Person is a member of the Board is not an Acquiring Person, or an
Affiliate or an Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and was a member of the
Board prior to the Record Date, or (ii) any Person who subsequently becomes a
member of the Board who, while such Person is a member of the Board, is not an
Acquiring Person, or an Affiliate or an Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, if
such Person's nomination for election or election to the Board is recommended
or approved by a majority of the Continuing Directors.
(c) The right of the registered holders of Right Certificates to exercise
the Right evidenced thereby or, if the Distribution Date has not theretofore
occurred, the inchoate right of the registered holders of Rights to exercise
the same shall, without notice to such holders or to the Rights Agent and
without further action, terminate and be of no further force or effect
effective as of the time of adoption by the Board of Directors of the Company
of a resolution authorizing and directing the redemption of the Rights pursuant
to paragraph (b) of this Section 24 (or, alternatively, if the Board of
Directors qualified such action as to time, basis or conditions, then at such
time, on such basis and with such conditions as the Board of Directors may have
established pursuant to such paragraph (b));
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thereafter, the only right of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any
redemption resolution pursuant to paragraph (b) of this Section 24; 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 adoption of
any redemption resolution pursuant to paragraph (b) of this Section 24, the
Company shall give notice of such redemption to the Rights Agent and to the
holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agents 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 shall state the method by which the
payment of the Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or Associates may
acquire (other than, in the case of such Affiliates and Associates, in their
capacity as holders of Common Shares of the Company), redeem or purchase for
value any Rights at any time in any manner other than as specifically set forth
in this Section 24 or in Section 25 herein, and other than in connection with
the purchase of Common Shares prior to the Distribution Date.
Section 25. MANDATORY REDEMPTION AND EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, issue Preferred Shares or
Common Shares of the Company in mandatory redemption of, and in exchange for,
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to the provisions of
Section 12(a)(ii) hereof) at an exchange ratio of one Unit of a Preferred Share
or one Common Share for each Right which is then exercisable pursuant to the
provisions of Section 12(a)(ii) hereof. Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such redemption and
exchange at any time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any such
Subsidiary, or any trustee of or fiduciary with respect to any such plan when
acting in such capacity), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Voting Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the mandatory redemption and exchange of any Rights pursuant to
subsection (a) of this Section 25, (which action may be conditioned on the
occurrence of one or more events or on the existence of one or more facts or
may be effective at some future time) 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 such
number of Preferred Shares or Common Shares as is provided in paragraph (a) of
this Section 25. The Company shall promptly give public notice of any such
redemption and exchange; PROVIDED, HOWEVER, that the failure to give, or any
defect in, such notice shall not affect the validity of such redemption and
exchange. The Company promptly shall mail a notice of any such redemption and
exchange to the Rights Agent and to all the holders of such Rights
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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
mandatory redemption and exchange shall state the method by which the
redemption and exchange of the Preferred Shares or Common Shares for Rights
will be effected and, in the event of any partial redemption and exchange, the
number of Rights which will be redeemed and exchanged. Any partial redemption
and exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become null and void pursuant to the provisions of
Section 12(a)(ii) hereof) held by each holder of Rights.
Section 26. NOTICE OF CERTAIN EVENTS. If the Company shall, on or after
the Distribution Date, propose (a) to pay any dividend or other distribution
payable in stock of any class of the Company or any Subsidiary of the Company
to the holders of its Preferred Shares, (b) to offer to the holders of its
Preferred Shares rights, options or warrants to subscribe for or to purchase
any additional Preferred Shares or shares of stock of any class or any other
securities, rights, options or warrants, (c) to make any other distribution to
the holders of its Preferred Shares (other than a regular quarterly cash
dividend), (d) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries
(determined as provided in Section 14 herein) to, any other Person (other than
the Company or a Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries), (f) to
effect the liquidation, dissolution or winding up of the Company or (g) if the
Rights have theretofore become exercisable with respect to Common Shares
pursuant to Section 12(a)(ii) herein, to declare or pay any dividend or other
distribution on the Common Shares payable in Common Shares or in stock of any
other class of the Company or any Subsidiary of the Company or to effect a
subdivision or combination of the Preferred Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) then, in each such
case, the Company shall give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 28 hereof, notice of such proposed
action, which shall specify the date of authorization by the Board of Directors
of the Company of, and record date for, such stock dividend or such
distribution of rights or warrants or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, winding up,
subdivision or combination is to take place and the date of participation
therein by the holders of the Preferred Shares of the Company if any such date
is to be fixed. Such notice shall be so given in the case of any action covered
by clause (a), (b), (c) or (g) above at least 20 days prior to the record date
for determining holders of the Preferred Shares of the Company, for purposes of
such action, and in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Preferred Shares of the Company, whichever shall
be the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a Right Certificate,
in accordance with Section 28 hereof, a notice of the occurrence of such
30
33
event, which shall specify the event and the consequences of the event to
holders of Rights under Section l2(a)(ii) hereof.
Section 27. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Garden Ridge Corporation
00000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Secretary
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:
Xxxxx Xxxxxx Shareholder Services, L.L.C.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxx
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 Rights
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 29. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of Right Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, to make any other provisions
in regard to matters or questions arising hereunder, or to add, delete, modify
or otherwise amend any provision, which the Company may deem necessary or
desirable, including without limitation, extending the Final Expiration Date
and, provided that at the time of such amendment or supplement the Distribution
Date has not occurred, the period during which the Rights may be redeemed;
PROVIDED, HOWEVER, that, from and after such time as any Person becomes an
Acquiring Person, any such amendment shall not materially and adversely affect
the interests of the holders of Right Certificates. Without limiting the
foregoing, the Board of Directors of the Company may by resolution, adopted at
any time prior to such time as any Person becomes an Acquiring Person, amend
this Agreement to lower the threshold set forth in the definitions of Acquiring
Person and
31
34
Distribution Date herein to a percentage not less than the greater of (i) any
percentage greater than the largest percentage of the outstanding Voting Shares
then known to the Company to be beneficially owned by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any trustee of or fiduciary
with respect to any such plan when acting in such capacity), and (ii) 10%.
Notwithstanding any other provision hereof, the Rights Agent's consent
must be obtained regarding any amendment or supplement pursuant to this Section
29 which alters the Rights Agent's rights or duties.
Section 30. 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 31. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of the Rights.
Section 32. SEVERABILITY. If any term, provision, covenant, or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 33. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State, provided, however, that the rights and
obligations of the Rights Agent shall be governed by and construed in
accordance with the State of New York.
Section 34. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 35. DESCRIPTIVE 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.
32
35
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.
GARDEN RIDGE CORPORATION
Attest:
By: /s/ XXXX XXXXXXX By: /s/ XXXX X. XXXXXXXXX
Title: Executive Assistant Title: Chief Financial Officer
XXXXX XXXXXX SHAREHOLDER
SERVICES, L.L.C., As Rights Agent
Attest:
By: /s/ XXXXXXX X. XXXXXXX By: /s/ XXXXX X. XXXX
Title: Vice President Title: Assistant Vice President
33
36
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- _______________ Rights
NOT EXERCISABLE AFTER JUNE 3, 2007 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED
IN SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID.
GARDEN RIDGE CORPORATION
This certifies that ______________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of June 4, 1997 (the "Rights
Agreement"), between Garden Ridge Corporation, a Delaware corporation (the
"Company"), and Xxxxx Xxxxxx Shareholder Services, L.L.C. (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 the Final Expiration Date
(as such term is defined in the Rights Agreement), at the Corporate Trust
Office of the Rights Agent (or at the office of its successor as Rights Agent),
one Unit (as that term is defined in the Rights Agreement, initially being one
one-thousandth (1/1000th)) of a fully paid nonassessable Series A Junior
Participating Preferred Share, having a par value of $0.01 (the "Preferred
Shares"), of the Company, at a purchase price of Fifty Dollars ($50.00) per
Unit of a Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of Units of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of June 17, 1997, based on the Preferred Shares as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of Units of a Preferred Share 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
37
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 Corporate Trust Office of the Rights
Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the Corporate Trust 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
Preferred 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
$0.01 per Right or (ii) may be exchanged by the Company in whole or in part for
Preferred Shares or Common Shares of the Company.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth (1/1000th) of a Preferred Share), but in lieu
thereof a cash payment will be made as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any manner submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in the 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 entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
38
WITNESS the facsimile signatures of the proper officers of the Company
and is corporate seal.
Dated as of
ATTEST: GARDEN RIDGE CORPORATION
_______________________ By: __________________________________
Secretary President
Date of Authentication:
This is one of the Right Certificates referred to in the within-mentioned
Rights Agreement.
Xxxxx Xxxxxx Shareholder Services, L.L.C., as Rights Agent
By: ______________________________
Authorized Signatory
39
[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 Right
Certificate on the books of the within-named Company, with full power of
substitution.
Dated as of ____________, _______.
-----------------------------------
Signature
Signature Guarantee:
Signatures must be guaranteed.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
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
40
[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 GARDEN RIDGE CORPORATION:
The undersigned hereby irrevocably elects to exercise Rights represented
by this Right Certificate to purchase the Preferred Shares (or other securities
issuable upon the exercise of such Rights) and requests that certificates for
such Preferred Shares (or other securities) 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)
--------------------------------------------------------------------------------
Date as of ______, _____.
----------------------------------------
Signature
41
[Form of Reverse Side of Right Certificate - continued]
Signature Guaranteed:
Signatures must be guaranteed.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
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
The signature in the foregoing Form of Assignment or Form of Election to
Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of Assignment
or 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.
42
EXHIBIT B
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
GARDEN RIDGE CORPORATION
Pursuant to Section 151 of the General Corporation Law of the State of
Delaware
GARDEN RIDGE CORPORATION, a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Restated Certificate of Incorporation of
the said Corporation, the said Board of Directors on June 3, 1997 adopted the
following resolution creating a series of 100,000 shares of Preferred Stock
designated as "Series A Junior Participating Preferred Stock":
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of the
Restated Certificate of Incorporation, a series of Preferred Stock, par
value $.01 per share, of the Corporation be and hereby is created, and
that the designation and number of shares thereof and the voting and
other powers, preferences and relative, participating, optional or other
rights of the shares of such series and the qualifications, limitations
and restrictions thereof are as follows:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
1. DESIGNATION AND AMOUNT. There shall be a series of Preferred Stock
that shall be designated as "Series A Junior Participating Preferred Stock,"
and the number of shares constituting such series shall be 100,000. Such number
of shares may be increased or decreased by resolution of the Board of
Directors; provided, however, that no decrease shall reduce the number of
shares of Series A Junior Participating Preferred Stock to less than the number
of shares then issued and outstanding plus the number of shares issuable upon
exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Corporation.
2. DIVIDENDS AND DISTRIBUTIONS.
a. Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating
43
Preferred Stock, in preference to the holders of shares of any class or series
of stock of the Corporation ranking junior to the Series A Junior Participating
Preferred Stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the 15th day of March, June, September and
December of each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a share of Series A
Junior Participating Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $10 or (b) the Adjustment Number (as
defined below) times the aggregate per share amount of all cash dividends, and
the Adjustment Number times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock, par
value $.01 per share, of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Participating Preferred Stock. The
"Adjustment Number" shall initially be 1,000. In the event the Corporation
shall at any time after June 3, 1997 (the "Rights Declaration Date") (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
b. The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in Paragraph A above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the net
subsequent Quarterly Dividend Payment Date, a dividend of $10 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
c. Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of
holders of shares of Series A Junior Participating Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly
44
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Junior Participating Preferred Stock
in an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of Series A Junior
Participating Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
3. VOTING RIGHTS. The holders of shares of Series A Junior Participating
Preferred Stock shall have the following voting rights:
a. Each share of Series A Junior Participating Preferred Stock
shall entitled the holder thereof to a number of votes equal to the Adjustment
Number on all matters submitted to a vote of the stockholders of the
Corporation.
b. Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
c. i. If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the occurrence of such contingency shall xxxx the beginning
of period (herein called a "default period") that shall extend until such time
when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been declared
and paid or set apart for payment. During each such default period, all holders
of Preferred Stock (including holders of the Series A Junior Participating
Preferred Stock) upon which these or like voting rights have been conferred and
are exercisable (the "Voting Preferred Stock") with dividends in arrears in an
amount equal to six quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two Directors.
ii. During any default period, such voting rights of the
holders of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3.C or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the right
of the holders of any other series of Voting Preferred Stock, if any, to
increase, in certain cases, the authorized number of Directors shall be
exercised unless the holders of ten percent in number of shares of Voting
Preferred Stock outstanding shall be present in person or by proxy. The absence
of a quorum of the holders of Common Stock shall not affect the exercise by the
holders of Voting Preferred Stock of such voting right. At any meeting at which
the holders of Voting Preferred Stock shall exercise such voting right
initially during an existing default period, they shall have the right, voting
as a class, to elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two Directors, or, if such right is exercised
at an annual meeting, to elect two Directors. If the
45
number that may be so elected at any special meeting does not amount to the
required number, the holders of the Voting Preferred Stock shall have the right
to make such increase in the number of Directors as shall be necessary to
permit the election of them of the required number. After the holders of the
Voting Preferred Stock shall have exercised their right to elect Directors in
any default period and during the continuance of such period, the number of
Directors shall not e increased or decreased except by vote of the holders of
Voting Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to or PARI PASSU with the Series A Junior
Participating Preferred Stock.
iii. Unless the holders of Voting Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent of the total
number of shares of Voting Preferred Stock outstanding, irrespective of series,
may request the calling of a special meeting of the holders of Voting Preferred
Stock, which meeting shall thereupon be called by the Chairman of the Board,
the President, a Vice President or the Secretary of the Corporation. Notice of
such meeting and of any annual meeting at which holders of Voting Preferred
Stock are entitled to vote pursuant to this paragraph C(iii) shall be given to
each holder of record of Voting Preferred Stock by mailing a copy of such
notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or, in default of the
calling of such meeting within 60 days after such order or request, such
meeting may be called on similar notice by any stockholder or stockholders
owning in the aggregate not less than ten percent of the total number of shares
of Voting Preferred Stock outstanding. Notwithstanding the provisions of this
paragraph C(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next annual meeting
of the stockholders.
iv. In any default period, the holders of Common Stock, and
other classes of stock of the Corporation, if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Voting
Preferred Stock shall have exercised their right to elect two Directors voting
as a class, after the exercise of which right (x) the Directors so elected by
the holders of Voting Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except
as provided in paragraph C(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected by the holders of the
class of stock which elected the Director whose office shall have become
vacant. References in this paragraph C to Directors elected by the holders of a
particular class of stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing sentence.
v. Immediately upon the expiration of a default period, (x)
the right of the holders of Voting Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the holders of
Voting Preferred Stock as a class shall terminate, and (z) the number of
Directors shall be such number as may be provided for in the Restated
Certificate of Incorporation or Bylaws irrespective of any increase made
pursuant to the provisions of paragraph
46
C(ii) of this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the Restated Certificate of
Incorporation of Bylaws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled
by a majority of the remaining Directors.
d. Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
4. CERTAIN RESTRICTIONS
a. Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
i. declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Junior Participating Preferred Stock;
ii. declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Junior Participating Preferred Stock, except dividends paid ratably on the
Series A Junior Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
iii. redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (both as to
dividends and upon dissolution, liquidation or winding up) to the Series A
Junior Participating Preferred Stock; or
iv. redeem or purchase or otherwise acquire for consideration
any shares of Series A Junior Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series A Junior Participating Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
47
b. The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Paragraph A of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
5. REACQUIRED SHARES. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to any conditions and restrictions on issuance set forth
herein.
6. LIQUIDATION, DISSOLUTION OR WINDING UP.
a. Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Series A Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Series
A Liquidation Preference by (ii) the Adjustment Number. Following the payment
of the full amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A Junior
Participating Preferred Stock and Common Stock, respectively, holders of Series
A Junior Participating Preferred Stock and holders of shares of Common Stock
shall receive their ratable and proportionate shares of the remaining assets to
be distributed in the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis, respectively.
b. In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
that rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratable to the holders of Common Stock.
7. CONSOLIDATION, MERGER, ETC. In the case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any
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such case the shares of Series A Junior Participating Preferred Stock shall at
the same time be similarly exchanged or changed in an amount per share equal to
the Adjustment Number times the aggregate amount of stock, securities, cash/or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged.
8. REDEMPTION. The shares of the Series A Junior Participating Preferred
Stock shall not be redeemable.
9. RANKING. The Series A Junior Participating Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
10. AMENDMENT. At any time that any shares of Series A Junior
Participating Preferred Stock are outstanding, the Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.
11. FRACTIONAL SHARES. Series A Junior Participating Preferred Stock may
be issued in fractions of a share that shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, the undersigned have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this 9th day of June, 1997.
GARDEN RIDGE CORPORATION
By: /s/ XXXX X. XXXXX
Xxxx X. Xxxxx
President
Attest:
/s/ XXXX X. XXXXXXXXX
Xxxx X. Xxxxxxxxx
Secretary
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EXHIBIT C
GARDEN RIDGE CORPORATION
STOCKHOLDER RIGHTS PLAN
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On June 3, 1997, the Board of Directors of Garden Ridge Corporation (the
"Company"), authorized the issuance of one preferred share purchase right (a
"Right") with respect to each outstanding share of common stock, par value of
one cent ($0.01) (the "Common Shares"), of the Company to stockholders of
record at the close of business on June 17, 1997. Each Right entitles the
registered holder to purchase from the Company one Unit (as such term is
defined in the Rights Agreement, initially being one one-thousandth (1/1000th))
of a Preferred Share at a price of $50.00 per Unit of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated June 4, 1997, as amended and
restated on July 14, 1999 (as amended and restated, the "Rights Agreement"),
between the Company and Xxxxx Xxxxxx Shareholder Services, L.L.C., as Rights
Agent (the "Rights Agent").
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to all
Common Share certificates representing outstanding shares and no separate Right
Certificate will be distributed. The Rights will separate from the Common
Shares and a Distribution Date (as defined in the Rights Agreement) will occur
upon the earlier of (i) 10 Business Days following a public announcement that a
Person or group of affiliated or associated Persons (an "Acquiring Person") has
acquired beneficial ownership of 25% or more of the outstanding Voting Shares
(as defined in the Rights Agreement) of the Company, or (ii) 10 Business Days
following the commencement or announcement of an intention to commence a tender
offer or exchange offer the consummation of which would result in the
beneficial ownership by a Person or group of 25% or more of such outstanding
Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced by the certificates representing
Common Shares, (ii) the Rights will be transferred with and only with the
Common Shares, (iii) new Common Share certificates issued after June 17, 1997,
upon transfer or new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference, and (iv) the surrender for
transfer of any certificates for Common Shares outstanding as of June 17, 1997,
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 (the "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 thereafter
evidence the Rights.
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The Rights are not exercisable until the Distribution Date. The Rights
will expire on June 3, 2007 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
If an Acquiring Person were to acquire 25% or more of the Voting Shares
of the Company, each Right then outstanding (other than Rights beneficially
owned by the Acquiring Person which would become null and void) would become a
right to buy that number of Preferred Shares that at the time of such
acquisition would have a market value of two times the Purchase Price of the
Right. If, however, the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an Acquiring Person, has become such
inadvertently, and such Person divests a sufficient number of Voting Shares by
such deadline as the Board of Directors shall set, then such Person shall not
be deemed to be an Acquiring Person for any purposes of this Agreement.
If the Company were acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power were
sold, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value of two times the Purchase Price of the Right.
Upon exercise of a Right, the Company will have the option to sell Common
Shares of the Company having a market value equal to the Preferred Shares that
would be purchased upon exercise of a Right, instead of selling Preferred
Shares of the Company.
REGISTRATION AND LISTING OF COMMON SHARES. The offer and sale of the
Preferred Shares or other securities issuable upon exercise of the Rights will
be registered with the Securities and Exchange Commission but such registration
will not be effective until the Rights become exercisable. As described above,
however, the Rights will not be transferable separately from the Common Shares
until the Distribution Date.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of Preferred Shares or
other securities or property issuable upon exercise of the Rights, and the
Purchase Price payable, are subject to customary adjustments from time to time
to prevent dilution.
The number of outstanding Rights and the number of Preferred Shares or
other securities issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
EXCHANGE OPTION. At any time after the acquisition by a Person or group
of affiliated or associated Persons of beneficial ownership of 25% or more of
the outstanding Voting Shares of the Company and before the acquisition by a
Person or group of 50% or more of the outstanding Voting
51
Shares of the Company, the Board of Directors may, at its option, issue Common
Shares of the Company in mandatory redemption of, or in exchange for, all or
part of the then outstanding exercisable Rights (other than Rights owned by
such Acquiring Person or group which would become null and void) at an exchange
ratio of one Common Share for each Preferred Share for which each Right is then
exercisable, subject to adjustment.
REDEMPTION OF RIGHTS. At any time prior to the first public announcement
that a Person or group has become the beneficial owner of 25% or more of the
outstanding Voting Shares, the Board of Directors of the Company may redeem
all, but not less than all, of the then outstanding Rights at a price of $0.01
per Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be
to receive the Redemption Price.
NO RIGHTS AS STOCKHOLDER. Until a Right is exercised, the holder thereof,
as such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
AMENDMENT OF 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 amendment to extend the Final Expiration Date, and, provided a
Distribution Date has occurred, to extend the period during which the Rights
may be redeemed, except that after the Distribution Date no such amendment may
materially and adversely affect the interests of holders of the Rights.
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.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
June 10, 1997. A copy of the Rights Agreement is available free of charge from
the Company.
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LEGEND FOR STOCK CERTIFICATES
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN GARDEN RIDGE CORPORATION AND
XXXXX XXXXXX SHAREHOLDER SERVICES, L.L.C., DATED AS OF JUNE 4, 1997 (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
GARDEN RIDGE CORPORATION. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE
RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND
WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. GARDEN RIDGE CORPORATION WILL
MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT
CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. AS DESCRIBED IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO OR ACQUIRED BY ANY ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE THEREOF (EACH AS DEFINED IN THE RIGHTS AGREEMENT) SHALL,
UNDER CERTAIN CIRCUMSTANCES, BECOME NULL AND VOID.