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SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
October 20, 1998
between
FIRST TENNESSEE NATIONAL CORPORATION
and
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
as Rights Agent
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SHAREHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
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ARTICLE I
DEFINITIONS
1.1 Definitions...........................................................2
ARTICLE II
THE RIGHTS
2.1 Summary of Rights....................................................16
2.2 Legend on Common Stock Certificates..................................17
2.3 Exercise of Rights; Separation of Rights.............................18
2.4 Adjustments to Exercise Price; Number of
Rights...............................................................22
2.5 Date on Which Exercise is Effective..................................25
2.6 Execution, Authentication, Delivery and
Dating of Rights Certificates........................................26
2.7 Registration, Registration of Transfer
and Exchange.........................................................27
2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates.........................................................29
2.9 Persons Deemed Owners................................................30
2.10 Delivery and Cancellation of Certificates............................31
2.11 Agreement of Rights Holders..........................................31
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in..............................................................33
3.2 Flip-over............................................................38
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ARTICLE IV
THE RIGHTS AGENT
4.1 General..............................................................39
4.2 Merger or Consolidation or Change of Name of
Rights Agent.........................................................40
4.3 Duties of Rights Agent...............................................42
4.4 Change of Rights Agent...............................................46
ARTICLE V
MISCELLANEOUS
5.1 Redemption...........................................................48
5.2 Expiration...........................................................49
5.3 Issuance of New Rights Certificates..................................49
5.4 Supplements and Amendments...........................................50
5.5 Fractional Shares....................................................51
5.6 Rights of Action.....................................................52
5.7 Holder of Rights Not Deemed a Shareholder............................52
5.8 Notice of Proposed Actions...........................................53
5.9 Notices..............................................................54
5.10 Suspension of Exercisability.........................................55
5.11 Costs of Enforcement.................................................55
5.12 Successors...........................................................56
5.13 Benefits of this Agreement...........................................56
5.14 Determination and Actions by the Board of
Directors, etc.......................................................56
5.15 Descriptive Headings.................................................57
5.16 Governing Law........................................................57
5.17 Counterparts.........................................................57
5.18 Severability.........................................................58
EXHIBITS
Exhibit A Form of Rights Certificate
(Together with Form of
Election to Exercise)
Exhibit B Articles of Amendment
designating Series of
Participating Preferred Stock
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SHAREHOLDER PROTECTION RIGHTS AGREEMENT
SHAREHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to time,
this "Agreement"), dated as of October 20, 1998, between First Tennessee
National Corporation, a Tennessee corporation (the "Company"), and First
Tennessee Bank National Association, a national banking association, as Rights
Agent (the "Rights Agent", which term shall include any successor Rights Agent
hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each share of Common
Stock (as hereinafter defined) held of record as of the close of business on
November 2, 1998 (the "Record Time") and (b) as provided in Section 2.4,
authorized the issuance of one Right in respect of each share of Common Stock
issued after the Record Time and prior to the Separation Time (as hereinafter
defined), and, to the extent provided in Section 5.3, each share of Common Stock
issued after the Separation Time;
WHEREAS, subject to the terms and conditions hereof, each Right
entitles the holder thereof, after the
Separation Time, to purchase securities or assets of the Company (or, in certain
cases, securities of certain other entities) pursuant to the terms and subject
to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms
have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of
10% or more of the outstanding shares of Common Stock; provided, however, that
the term "Acquiring Person" shall not include any Person (i) who is the
Beneficial Owner of 10% or more of the outstanding shares of Common Stock on the
date of this Agreement or who shall become the Beneficial Owner of 10% or more
of the
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outstanding shares of Common Stock solely as a result of an acquisition by the
Company of shares of Common Stock, until such time hereafter or thereafter as
any of such Persons shall become the Beneficial Owner (other than by means of a
stock dividend or stock split) of any additional shares of Common Stock, (ii)
who becomes the Beneficial Owner of 10% or more of the outstanding shares of
Common Stock but who acquired Beneficial Ownership of shares of Common Stock
without any plan or intention to seek or affect control of the Company, if such
Person promptly enters into an irrevocable commitment to divest, and thereafter
promptly divests (without exercising or retaining any power, including voting,
with respect to such shares), sufficient shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) so that
such Person ceases to be the Beneficial Owner of 10% or more of the outstanding
shares of Common Stock or (iii) who Beneficially Owns shares of Common Stock
consisting solely of one or more of (A) shares of Common Stock Beneficially
Owned pursuant to the grant or exercise of an option granted to such Person (an
"Option Holder") by the Company in connection with an agreement to merge with,
or acquire, the Company entered into prior to a Flip-in Date, (B) shares of
Common Stock (or securities convertible into, exchangeable
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into or exercisable for Common Stock), Beneficially Owned by such Option Holder
or its Affiliates or Associates at the time of grant of such option, (C) shares
of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) acquired by Affiliates or Associates of such
Option Holder after the time of such grant which, in the aggregate, amount to
less than 1% of the outstanding shares of Common Stock and (D) shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock) which are held by such Person in trust accounts, managed accounts
and the like or otherwise held in a fiduciary capacity, that are Beneficially
Owned by third persons who are not Affiliates or Associates of such Person or
acting together with such Person to hold such shares, or which are held by such
Person in respect of a debt previously contracted. In addition, the Company, any
wholly-owned Subsidiary of the Company and any employee stock ownership or other
employee benefit plan of the Company or a wholly-owned Subsidiary of the Company
shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 under the Exchange Act, as such Rule is in effect on
the date of this Agreement.
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"Agreement" shall have the meaning set forth in the preamble.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Exchange Act, as such Rules are in effect on the date of this Agreement, as well
as any securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner", or to have "Beneficial Ownership" of, or to
"Beneficially Own", any security (i) solely because such security has been
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered security is accepted
for payment or exchange or (ii) solely because such Person or any of such
Person's Affiliates or Associates has or shares
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the power to vote or direct the voting of such security pursuant to a revocable
proxy given in response to a public proxy or consent solicitation made to more
than ten holders of shares of a class of stock of the Company registered under
Section 12 of the Exchange Act and pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act, except if such power
(or the arrangements relating thereto) is then reportable under Item 6 of
Schedule 13D under the Exchange Act (or any similar provision of a comparable or
successor report). Notwithstanding the foregoing, no officer or director of the
Company shall be deemed to Beneficially Own any securities of any other Person
by virtue of any actions such officer or director takes in such capacity. For
purposes of this Agreement, in determining the percentage of the outstanding
shares of Common Stock with respect to which a Person is the Beneficial Owner,
all shares as to which such Person is deemed the Beneficial Owner shall be
deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the city of Memphis are generally
authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m. Memphis time
on such date or, if such date is not
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a Business Day, 5:00 p.m. Memphis time on the next succeeding Business Day.
"Common Stock" shall mean the shares of Common Stock, par value $0.625
per share, of the Company.
"Company" shall have the meaning set forth in the preamble.
"Election to Exercise" shall have the meaning set forth in Section
2.3(d) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Ratio" shall have the meaning set forth in Section 3.1(c)
hereof.
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the Exercise Price
shall equal $150.
"Expansion Factor" shall have the meaning set forth in Section 2.4(a)
hereof.
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"Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time and (iii) December 31, 2009.
"Flip-in Date" shall mean the tenth business day after any Stock
Acquisition Date or such earlier or later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Flip-in
Date that would otherwise have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean (i) in the
case of a Flip-over Transaction or Event described in clause (i) of the
definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-over Transaction or Event and (ii) in
the case of a Flip-over Transaction or Event referred to in clause (ii) or (iii)
of the definition thereof, the Person receiving the greatest portion of the (A)
assets or (B) operating income or cash flow being transferred in such Flip-over
Transaction or Event, provided in all cases if such Person is a subsidiary of a
corporation, the parent corporation shall be the Flip-Over Entity.
"Flip-over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power
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in respect of the election of directors (or other persons similarly responsible
for direction of the business and affairs) of the Flip-Over Entity.
"Flip-over Transaction or Event" shall mean a transaction or series of
transactions after a Flip-in Date in which, directly or indirectly, (i) the
Company shall consolidate or merge or participate in a share exchange with any
other Person if, at the time of the consolidation, merger or share exchange or
at the time the Company enters into any agreement with respect to any such
consolidation, merger or share exchange, the Acquiring Person Controls the Board
of Directors of the Company and either (A) any term of or arrangement concerning
the treatment of shares of capital stock in such consolidation, merger or share
exchange relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of the Common Stock or (B) the Person
with whom the transaction or series of transactions occurs is the Acquiring
Person or an Affiliate or Associate of the Acquiring Person, (ii) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer) assets (A) aggregating more than 50% of the assets
(measured by either book value or fair market value) or (B) generating more than
50% of the operating income or cash flow, of the
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Company and its Subsidiaries (taken as a whole) to any Person (other than the
Company or one or more of its wholly owned Subsidiaries) or to two or more such
Persons which are Affiliates or Associates or otherwise acting in concert, if,
at the time of the entry by the Company (or any such Subsidiary) into an
agreement with respect to such sale or transfer of assets, the Acquiring Person
Controls the Board of Directors of the Company, or (iii) any Acquiring Person
shall (A) sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, to, from, or with, as the case may be, the
Company or any of its Subsidiaries, over any period of 12 consecutive calendar
months, assets (x) having an aggregate fair market value of more than
$15,000,000 or (y) on terms and conditions less favorable to the Company than
the Company would be able to obtain through arm's-length negotiations with an
unaffiliated third party, (B) receive any compensation for services from the
Company or any of its Subsidiaries, other than compensation for full-time
employment as a regular employee at rates in accordance with the Company's (or
its Subsidiaries') past practices, (C) receive the benefit, directly or
indirectly (except proportionately as a shareholder), over any period of 12
consecutive calendar months, of any loans, advances, guarantees, pledges,
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insurance, reinsurance or other financial assistance or any tax credits or other
tax advantage provided by the Company or any of its Subsidiaries involving an
aggregate principal amount in excess of $5,000,000 or an aggregate cost or
transfer of benefits from the Company or any of its Subsidiaries in excess of
$5,000,000 or, in any case, on terms and conditions less favorable to the
Company than the Company would be able to obtain through arm's-length
negotiations with a third party, or (D) increase by more than 1% its
proportionate share of the outstanding shares of any class of equity securities
or securities convertible into any class of equity securities of the Company or
any of its Subsidiaries as a result of any acquisition from the Company (with or
without consideration), any reclassifica tion of securities (including any
reverse stock split), or recapitalization, of the Company, any merger or consol
idation of the Company or any other transaction or series of transactions
(whether or not with or into or otherwise involving an Acquiring Person). For
purposes of the foregoing description, the term "Acquiring Person" shall include
any Acquiring Person and its Affiliates and Associates, counted together as a
single Person. An Acquiring Person shall be deemed to Control the Company's
Board of Directors when, following a Flip-in Date, the
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persons who were directors of the Company (or persons nominated and/or appointed
as directors by vote of a majority of such persons) before the Stock Acquisition
Date shall cease to constitute a majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Section
2.4 hereof shall have caused the closing prices used to determine the Market
Price on any Trading Days during such period of 20 Trading Days not to be fully
comparable with the closing price on such date, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on any
date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, in either case as
reported in the principal consolidated transaction reporting system with respect
to
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securities listed or admitted to trading on the New York Stock Exchange, Inc.
or, if the securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the securities are not listed or admitted to
trading on any national securities exchange or quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the securities selected by the Board of
Directors of the Company; provided, however, that if on any such date the
securities are not listed or admitted to trading on a national securities
exchange or traded in the over-the-counter market, the closing price per share
of such securities on such date shall mean the fair value per share of
securities on such date as determined in good faith by the Board of Directors of
the Company, after consultation with a
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nationally recognized investment banking firm, and set forth in a certificate
delivered to the Rights Agent.
"Option Holder" shall have the meaning set forth in the definition of
Acquiring Person.
"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange Act of
1934, as such Rule is in effect on the date of this Agreement), corporation or
other entity.
"Preferred Stock" shall mean the series of Participating Preferred
Stock, no par value of the Company created by Articles of Amendment in
substantially the form set forth in Exhibit B hereto appropriately completed.
"Record Time" shall have the meaning set forth in the Recitals.
"Redemption Price" shall mean an amount equal to one-tenth of one cent,
$0.001.
"Redemption Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1 hereof.
"Right" shall have the meaning set forth in the Recitals.
"Rights Agent" shall have the meaning set forth in the Preamble.
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"Rights Certificate" shall have the meaning set forth in Section 2.3(c)
hereof.
"Rights Register" shall have the meaning set forth in Section 2.7(a)
hereof.
"Separation Time" shall mean the close of business on the earlier of
(i) the tenth business day (or such later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Separation
Time that would otherwise have occurred) after the date on which any Person
commences a tender or exchange offer which, if consummated, would result in such
Person's becoming an Acquiring Person and (ii) the Flip-in Date; provided, that
if the foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time and provided further, that if any
tender or exchange offer referred to in clause (i) of this paragraph is
cancelled, terminated or otherwise withdrawn prior to the Separation Time
without the purchase of any shares of Common Stock pursuant thereto, such offer
shall be deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that a Person has become an Acquiring
Person.
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"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities or
a majority of the equity interest is Beneficially Owned, directly or indirectly,
by such Person.
"Trading Day," when used with respect to any securities, shall mean a
day on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal national securities
exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange but are reported on NASDAQ, a NASDAQ
business day or, if such securities are not reported on NASDAQ, a Business Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record Time,
the Company will mail a letter summarizing the terms of the Rights to each
holder of record
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of Common Stock as of the Record Time, at such holder's address as shown by the
records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the Common
Stock issued after the Record Time hereof but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of October 20,
1998 (as such may be amended from time to time, the "Rights Agreement"),
between First Tennessee National Corporation (the "Company") and First
Tennessee Bank National Association, as Rights Agent, the terms of which
are hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may become exercisable for securities or assets of the Company or
securities of another entity, may be exchanged for shares of Common Stock
or other securities or assets of the Company, may expire, may become void
(if they are "Beneficially Owned" by an "Acquiring Person" or an Affiliate
or Associate thereof, as such terms are defined in the Rights Agreement, or
by any transferee of any of the foregoing) or may be evidenced by separate
certificates and may no longer be evidenced by this certificate. The
Company will mail or arrange for the mailing of a copy of the Rights
Agreement to the holder of this certificate without charge within five days
after the receipt of a written request therefor.
Certificates representing shares of Common Stock that were issued and
outstanding at the Record Time shall evidence one
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Right for each share of Common Stock evidenced thereby notwithstanding the
absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to Sections
3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each Right will
entitle the holder thereof, after the Separation Time and prior to the
Expiration Time, to purchase, for the Exercise Price, one one-hundredth of a
share of Preferred Stock; provided, however, that the Rights shall not be
exercisable prior to the earlier of (i) the redemption of the rights issued
pursuant to the Shareholder Protection Rights Agreement, dated as of September
7, 1989, between the Company and the Rights Agent, as amended, and (ii) the
close of business on September 18, 1999.
(b) Until the Separation Time, (i) no Right may be exercised and (ii)
each Right will be evidenced by the certificate for the associated share of
Common Stock (together, in the case of certificates issued prior to the Record
Time, with the letter mailed to the record holder thereof pursuant to Section
2.1) and will be transferable only together with, and will be transferred by a
transfer (whether with or without such letter) of, such associated share.
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(c) Subject to the terms and conditions hereof, after the Separation
Time and prior to the Expiration Time, the Rights (i) may be exercised and (ii)
may be transferred independent of shares of Common Stock. Promptly following the
Separation Time, the Rights Agent will mail to each holder of record of Common
Stock as of the Separation Time (other than any Person whose Rights have become
void pursuant to Section 3.1(b)), at such holder's address as shown by the
records of the Company (the Company hereby agreeing to furnish copies of such
records to the Rights Agent for this purpose), (x) a certificate (a "Rights Cer
tificate") in substantially the form of Exhibit A hereto appropriately
completed, representing the number of Rights held by such holder at the
Separation Time and having 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 law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any national securities
exchange or quotation system on which the Rights may from time to time be listed
or traded, or to conform to usage, and (y) a disclosure statement describing the
Rights.
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(d) Subject to the terms and conditions hereof, Rights may be exercised
on any Business Day after the Separation Time and prior to the Expiration Time
by submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any transfer tax
or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for shares or depositary receipts (or both) in a name other than
that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d), and subject to the terms
and conditions hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent stock certificates evidencing such number of
shares or other securities to be purchased (the Company hereby irrevocably
authorizing its transfer agents to comply with all such requisitions) and
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(B) if the Company elects pursuant to Section 5.5 not to issue certificates
representing fractional shares, requisition from the depositary selected by the
Company depositary receipts representing the fractional shares to be purchased
or requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 and (ii) after receipt of such
certificates, depositary receipts and/or cash, deliver the same to or upon the
order of the registered holder of such Rights Certificate, registered (in the
case of certificates or depositary receipts) in such name or names as may be
desig nated by such holder.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent
to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly authorized,
executed, issued and delivered and fully
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paid and nonassessable; (ii) take all such action as may be necessary to comply
with any applicable requirements of the Securities Act of 1933 or the Exchange
Act, and the rules and regulations thereunder, and any other applicable law,
rule or regulation, in connection with the issuance of any shares upon exercise
of Rights; and (iii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided, that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the event
the Company shall at any time after the Record Time and prior to the Separation
Time (i) declare or pay a dividend on Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares of Common Stock, (x) the Exercise Price in
effect after such adjustment will be equal to the Exercise
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Price in effect immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of one share of
Common Stock immedi ately prior to such dividend, subdivision or combination
would hold thereafter as a result thereof and (y) each Right held prior to such
adjustment will become that number of Rights equal to the Expansion Factor, and
the adjusted number of Rights will be deemed to be distributed among the shares
of Common Stock with respect to which the original Rights were associated (if
they remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than in
a transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share. To the
extent provided in Section 5.3, Rights shall be issued by the
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Company in respect of shares of Common Stock that are issued or sold by the
Company after the Separation Time.
(b) In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Common Stock (other than as set forth
in Section 2.4(a)) whether by dividend, in a reclassification or
recapitalization (including any such transaction involving a merger,
consolidation or share exchange), or otherwise, the Company shall make such
adjustments, if any, in the Exercise Price, number of Rights and/or securities
or other property purchasable upon exer cise of Rights as the Board of Directors
of the Company, in its sole discretion, may deem to be appropriate under the
circumstances in order to adequately protect the interests of the holders of
Rights generally, and the Company and the Rights Agent shall amend this
Agreement as necessary to provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this Section
2.4 shall be calculated to the nearest cent. Whenever an adjustment to the
Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for
-24-
such adjustment and (ii) promptly file with the Rights Agent and with each
transfer agent for the Common Stock a copy of such certificate.
(d) Rights certificates shall represent the securities purchasable
under the terms of this Agreement, including any adjustment or change in the
securities purchasable upon exercise of the Rights, even though such
certificates may continue to express the securities purchasable at the time of
issuance of the initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, -------- however, that if the date of such
surrender and payment is a ------- date upon which the stock transfer books of
the Company are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall
-25-
be dated, the next succeeding Business Day on which the stock transfer books of
the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or one of its Executive Vice
Presidents, 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 Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or fac simile 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 countersignature and delivery of such Rights
Certificates.
Promptly after the Separation Time, the Company will notify the Rights
Agent of such Separation Time and will deliver Rights Certificates executed by
the Company to the Rights Agent for counter-signature, and, subject to Section
3.1(b), the Rights Agent shall manually countersign and deliver such Rights
Certificates to the holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certif-
-26-
icate shall be valid for any purpose unless manually countersigned by the Rights
Agent.
(b) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After the
Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and trans fers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) and (d), the Company will exe
cute, and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder's instruc-
-27-
tions, one or more new Rights Certificates evidencing the same aggregate number
of Rights as did the Rights Certifi cate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights issued
upon any registration of transfer or exchange of Rights Certificates shall be
the valid obligations of the Company, and such Rights shall be entitled to the
same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condi tion to the issuance of any new Rights
Certificate under this Section 2.7, 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.
(d) The Company shall not be required to register the transfer or
exchange of any Rights after such Rights have become void under Section 3.1(b),
been exchanged under Section 3.1(c) or been redeemed under Section 5.1.
-28-
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If
any mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company
shall execute and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evi dence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may
-29-
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.
(d) Every new Rights Certificate issued pursuant to this Section 2.8 in
lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and, subject to Section 3.1(b) shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, including the payment of the
Redemption Price and neither the Company nor the Rights Agent shall be affected
by any
-30-
notice to the contrary. As used in this Agreement, unless the context otherwise
requires, the term "holder" of any Rights shall mean the registered holder of
such Rights (or, prior to the Separation Time, the associated shares of Common
Stock).
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
surrendered upon exercise or for registration of transfer or exchange shall, if
surrendered to any person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly can celled by the Rights Agent.
The Company may at any time deliver to the Rights Agent for cancellation any
Rights Certificates previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Rights Certificates
so delivered shall be promptly cancelled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for any Rights
Certificates cancelled as provided in this Section 2.10, except as expressly
permitted by this Agreement. The Rights Agent shall destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting
the same consents and agrees with the
-31-
Company and the Rights Agent and with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated share of
Common Stock;
(b) after the Separation Time, the Rights Cer tificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void; and
-32-
(e) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration Time a
Flip-in Date shall occur, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise thereof
in accordance with the terms hereof (but subject to Section 5.10), that number
of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on or
after such Stock Acquisition Date an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred with respect to
the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
-33-
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person present ing the same will
not complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial Owners and their Affiliates and Associates) as the Company shall
reasonably request, then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or Associate
thereof or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced thereby to be void and not transferable or exercisable.
(c) To the extent permitted by law, the Board of Directors of the
Company may, at its option, at any time after a Flip-in Date elect to exchange
all (but not less than all) the then outstanding Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 3.1(b)) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted in order to protect the interests of
-34-
holders of Rights generally in the event that after the Separation Time an event
of a type analogous to any of the events described in Section 2.4(a) or (b)
shall have occurred with respect to the Common Stock (such exchange ratio, as
adjusted from time to time, being hereinafter referred to as the "Exchange
Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of shares of Common Stock equal to
the Exchange Ratio. Promptly after the action of the Board of Directors electing
to exchange the Rights, the Company shall give notice thereof (specifying the
steps to be taken to receive shares of Common Stock in exchange for Rights) to
the Rights Agent and the holders of the Rights (other than Rights that have
become void pursuant to Section 3.1(b)) outstanding immediately prior thereto by
mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon the
exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall for
all purposes
-35-
be deemed to have become the holder of record of the shares represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of any
applicable taxes and other governmental charges payable by the holder was made;
provided, however, that if the date of such surrender and payment is a date upon
which the stock transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the stock transfer
books of the Company are open.
(d) Whenever the Company shall become obligated under Section 3.1(a) or
(c) to issue shares of Common Stock upon exercise of or in exchange for Rights,
the Company, at its option, may substitute therefor shares of Preferred Stock,
at a ratio of one one-hundredth of a share of Pre ferred Stock for each share of
Common Stock so issuable.
(e) In the event that there shall not be suffi cient authorized but
unissued shares of Common Stock or Preferred Stock of the Company to permit the
exercise or exchange in full of the Rights in accordance with Section 3.1(a) or
(c), and the Company elects not to, or is otherwise unable to, make the exchange
referred to in
-36-
Section 3.1(c), the Company 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 Stock Acquisition Date to which it is a party,
that each Right shall thereafter constitute the right to receive, (x) at the
Company's option, either (A) in return for the Exercise Price, debt or equity
securities or other assets (or a combination thereof) having a fair value equal
to twice the Exercise Price, or (B) without payment of consideration (except as
otherwise required by applicable law), debt or equity securities or other assets
(or a combination thereof) having a fair value equal to the Exercise Price, or
(y) if the Board of Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Flip-in Date times the Exchange Ratio in
effect on the Flip-in Date, where in any case set forth in (x) or (y) 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.
-37-
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-over Transaction or Event unless and until it shall have entered into a
supplemental agreement with the Flip-over Entity, for the benefit of the holders
of the Rights, providing that, upon consummation or occurrence of the Flip-over
Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-over Stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-over Stock) and (ii) the Flip-over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to this Agreement. The provisions
-38-
of this Section 3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof in connection therewith, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-over Transaction or Event if at the time thereof there are any rights,
warrants or securities outstanding or any other arrangements, agreements or
instruments that would eliminate or otherwise diminish in any material respect
the benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights Agent to act as
agent for the Company in accor dance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the admin
istration and execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also
-39-
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 to be
done 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.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights Certificate, certificate
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direc tion, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
4.2 Merger or Consolidation or Change of Name of Rights Agent. (a) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent
-40-
or any successor Rights Agent is a party, or any corporation succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent,
will 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 4.4 hereof. In case
at the time such successor Rights Agent succeeds to the agency created by this
Agreement any of the Rights Certifi xxxxx have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates have not been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
will have the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certifi xxxxx shall have been countersigned but not
delivered, the
-41-
Rights Agent may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may countersign
such Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agree ment upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel will 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 deems it necessary or desirable that any fact or matter be proved
or established by the Company prior to taking or suffering any action here
under, such fact or matter (unless other evidence in respect
-42-
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a person believed by the
Rights Agent to be the Chairman of the Board, the President or any Vice
President and by the Treasurer or any Assistant Treasurer or the Secretary or
any Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate will 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 will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due author-
-43-
ization, execution and delivery hereof by the Rights Agent) or in respect of the
validity or execution of any certifi cate for securities purchasable upon
exercise of Rights or Rights Certificate (except its countersignature thereof);
nor will it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor will it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 3.1(b) hereof) or any adjustment
required under the provisions of Section 2.4, 3.1 or 3.2 hereof or responsible
for the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights after receipt of the certificate contemplated
by Section 2.4 describing any such adjustment); nor will it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any securities purchasable upon exercise of Rights or any Rights
or as to whether any securities purchasable upon exercise of Rights will, when
issued, be duly and validly authorized, executed, issued and delivered and fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed,
-44-
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 per forming 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 per formance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Executive Vice President or the Secretary or any Assistant
Secretary or the Treasurer or any Assistant Treasurer of the Company, and to
apply to such persons for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered by it in good faith
in accordance with instructions of any such person.
(h) The Rights Agent and any shareholder, direc tor, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, 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 Agree ment. Nothing herein shall preclude the Rights
Agent from
-45-
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accor dance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights
-46-
Agent. If the Company fails to make such appointment within a period of 30 days
after such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder of
any Rights (which holder shall, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then the holder of any Rights may
apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the laws of the
United States or any state of the United States, in good standing, which is
authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000. After
appointment, the successor Rights Agent will 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 predeces sor 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,
-47-
act or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Company will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail a
notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this Section 4.4, 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.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company may, at its
option, at any time prior to the close of business on the Flip-in Date, elect to
redeem all (but not less than all) the then outstanding Rights at the Redemption
Price and the Company, at its option, may pay the Redemption Price either in
cash or shares of Common Stock or other securities of the Company deemed by the
Board of Directors, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to
-48-
redeem the Rights states that the redemption will not be effective until the
occurrence of a specified future time or event, upon the occurrence of such
future time or event), without any further action and without any notice, the
right to exercise the Rights will terminate and each Right will thereafter
represent only the right to receive the Redemption Price in cash or securities,
as determined by the Board of Directors. Promptly after the Rights are redeemed,
the Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice in accordance with
Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged or
redeemed, as provided in Section 3.1 or 5.1 hereof, respectively.
5.3 Issuance of New Rights Certificates. Not withstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in
-49-
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock by the Company following the
Separation Time and prior to the Expiration Time pursuant to the terms of
securities convertible or redeemable into shares of Common Stock or to options,
in each case issued or granted prior to, and outstanding at, the Separation
Time, the Company shall issue to the holders of such shares of Common Stock,
Rights Certificates representing the appropriate number of Rights in connection
with the issuance or sale of such shares of Common Stock; provided, however, in
each case, (i) no such Rights Certificate shall be issued, if, and to the extent
that, the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or to the
Person to whom such Rights Certificates would be issued, (ii) no such Rights
Certificates shall be issued if, and to the extent that, appropriate adjustment
shall have otherwise been made in lieu of the issuance thereof, and (iii) the
Company shall have no obligation to distribute Rights Certificates to any
Acquiring Person or Affiliate or Associate of an Acquiring Person or any
transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights Agent may
from time to time supplement or amend
-50-
this Agreement without the approval of any holders of Rights (i) in any respect
prior to the close of business on the Flip-in Date, (ii) to make any changes
following the close of business on the Flip-in Date which the Company may deem
necessary or desirable and which shall not materially adversely affect the
interests of the holders of Rights generally or (iii) in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be inconsistent with any other provisions herein or otherwise defective. The
Rights Agent will duly execute and deliver any supplement or amendment hereto
requested by the Company which satisfies the terms of the preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue certificates
representing fractional shares upon exercise or redemption of Rights, the
Company shall, in lieu thereof, in the sole discretion of the Board of
Directors, either (a) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) pay to the
registered holder of
-51-
such Rights the appropriate fraction of the Market Price per share in cash.
5.6 Rights of Action. Subject to the terms of this Agreement (including
Sections 3.1(b) and 5.14), rights of action in respect of this Agreement, other
than rights of action vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any Rights, without the
consent of the Rights Agent or of the holder of any other Rights, may, on such
holder's own behalf and for such holder's own benefit and the benefit of other
holders of Rights, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, such
holder's right to exercise such holder's Rights in the manner provided in such
holder's Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and 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.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as such, of
any Rights shall be entitled to vote,
-52-
receive dividends or be deemed for any purpose the holder of shares or any other
securities which may at any time be issuable on the exercise of such Rights, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 5.8 hereof),
or to receive dividends or subscription rights, or otherwise, until such Rights
shall have been exercised or exchanged in accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose after
the Separation Time and prior to the Expiration Time (i) to effect or permit a
Flip-over Transaction or Event or (ii) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right, in accordance with Section 5.9 hereof, a notice of such
proposed action, which shall specify the date on which such Flip-over
Transaction or Event, liquidation, dissolution, or winding up is to take place,
and such notice shall be so
-53-
given at least 20 Business Days prior to the date of the taking of such proposed
action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
First Tennessee National Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Treasurer
Any notice or demand authorized or required by this Agree ment to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
First Tennessee Bank National Association
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Manager Corporate Trust Services
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or
-54-
made if delivered or sent by first-class mail, postage prepaid, addressed to
such holder at the address of such holder as it appears upon the registry books
of the Rights Agent or, prior to the Separation Time, on the registry books of
the transfer agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice.
5.10 Suspension of Exercisability. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to
Section 3.1 or to comply with federal or state securities laws, the Company may
suspend the exercisability of the Rights for a reasonable period in order to
take such action or comply with such laws. In the event of any such suspension,
the Company shall issue as promptly as practicable a public announcement stating
that the exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provi sions of this Agreement
shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the Company or
any other Person the securities of
-55-
which are purchasable upon exercise of Rights fails to fulfill any of its
obligations pursuant to this Agreement, then the Company or such Person will
reimburse the holder of any Rights for the costs and expenses (including legal
fees) incurred by such holder in actions to enforce such holder's rights
pursuant to any Rights or this Agreement.
5.12 Successors. All the covenants and provi sions 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.
5.13 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
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement and this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 Determination and Actions by the Board of Directors, etc. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and
-56-
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (y) not subject the Board of Directors of
the Company to any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF TENNESSEE
AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY
WITHIN SUCH STATE.
5.17 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
-57-
original, and all such counterparts shall together constitute but one and the
same instrument.
5.18 Severability. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unen forceable, such term or provision shall be ineffective as to
such jurisdiction to the extent of such invalidity or unen forceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
FIRST TENNESSEE NATIONAL
CORPORATION
By: /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Chairman, President and
Chief Executive Officer
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
-58-
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT
THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR
AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL
BE VOID.
Rights Certificate
FIRST TENNESSEE NATIONAL CORPORATION
This certifies that ____________________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Protection Rights Agreement, dated as of October
20, 1998 (as amended from time to time, the "Rights Agreement"), between First
Tennessee National Corporation, a Tennessee corporation (the "Company"), and
First Tennessee Bank National Association, a national banking association as
Rights Agent (the "Rights Agent", which term shall include any successor Rights
Agent under the Rights Agreement), to purchase from the Company at any time
after the Separation Time (as such term is defined in the Rights Agreement) and
prior to the close of business on
December 31, 2009, one one-hundredth of a fully paid share of Participating
Preferred Stock, no par value (the "Preferred Stock"), of the Company (subject
to adjustment as provided in the Rights Agreement) at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate
with the Form of Election to Exercise duly executed at the principal office of
the Rights Agent in Memphis, Tennessee. The Exercise Price shall initially be
$150 per Right and shall be subject to adjustment in certain events as provided
in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities of the Company
other than Preferred Stock or assets of the Company, all as provided in the
Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates.
-2-
Copies of the Rights Agreement are on file at the principal office of the
Company and are available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor evidencing an aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Rights Certificate or Rights Certificates surrendered.
If this Rights Certificate shall be exercised in part, the registered holder
shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced
by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.001 per Right or (b)
exchanged by the Company under certain circumstances, at its option, for one
share of Common Stock or one one-hundredth of a share of Preferred Stock per
Right (or, in certain cases, other securities or assets of the Company), subject
in each case to adjustment in certain events as provided in the Rights
Agreement.
-3-
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of any
securities 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 shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
-4-
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Date: ____________
ATTEST: FIRST TENNESSEE NATIONAL
CORPORATION
By
--------------------------- -------------------------------
Secretary
Countersigned:
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By
----------------------------------
Authorized Signature
-5-
06 89-5P [Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED _____________________________ hereby sells, assigns
and transfers unto ________________________________________________ this Rights
(Please print name and address of transferee)
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint _______________ Attorney, to transfer
the within Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated: _______________, ____
Signature Guaranteed:
-------------------------
Signature (Signature must
correspond to name as written
upon the face of this Rights
Certificate in every
particular, without alteration
or enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee Medallion program), pursuant to
SEC Rule 17Ad-15.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
-------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced by such Rights Certificate to be void and not transferable or
exercisable.
-2-
07 89-5P [To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise
the Rights Certificate.)
TO: FIRST TENNESSEE NATIONAL CORPORATION
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the shares of Participating Preferred Stock issuable
upon the exercise of such Rights and requests that certificates for such shares
be issued in the name of:
-----------------------------------------
Address:
-----------------------------------------
-----------------------------------------
Social Security or Other Taxpayer
Identification Number:
-----------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
-----------------------------------------
Address:
-----------------------------------------
-----------------------------------------
Social Security or Other Taxpayer
Identification Number:
-----------------------------------------
Dated: _______________, ____
Signature Guaranteed:
-------------------------
Signature (Signature must
correspond to name as written
upon the face of the
attached Rights Certificate in
every particular, without
alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee Medallion program), pursuant to
SEC Rule 17Ad-15.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by the attached
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
-------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the attached Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
-2-
EXHIBIT B
ARTICLES OF AMENDMENT
TO CHARTER OF
FIRST TENNESSEE NATIONAL CORPORATION
Pursuant to the provisions of Sections 00-00-000, 00-00-000 and
00-00-000 of the Tennessee Business Corporation Act, the undersigned corporation
adopts the following Articles of Amendment to its Charter:
1. The name of the corporation is First Tennessee National Corporation.
2. The amendment adopted is as follows:
Article 10 of the Corporation's Charter is hereby amended by adding
the following at the end thereof:
There is hereby established a series of Preferred Stock, no par value,
of the Corporation, with the designation and certain powers, preferences
and other rights of the shares of such series, and certain qualifications,
limitations and restrictions thereon, hereby fixed as follows:
(i) The distinctive serial designation of this series shall be
"Participating Preferred Stock" (hereinafter called "this Series").
Each share of this Series shall be identical in all respects with the
other shares of this Series except as to the dates from and after
which dividends thereon shall be cumulative.
(ii) The number of shares in this Series shall initially be ,
which number may from time to time be increased (but not above the
total number of shares of Preferred Stock then authorized) or
decreased (but not below the number then outstanding) by the Board of
Directors. Shares of this Series purchased by the Corporation shall be
cancelled and shall revert to authorized but unissued shares of
Preferred Stock undesignated as to series. Shares of this
Series may be issued in fractional shares, which fractional shares
shall entitle the holder, in proportion to such holder's fractional
share, to all rights of a holder of a whole share of this Series.
(iii) The holders of full or fractional shares of this Series
shall be entitled to receive, when and as declared by the Board of
Directors, but only out of funds legally available therefor,
dividends, (A) on each date that dividends or other distributions
(other than dividends or distributions payable in Common Stock of the
Corporation) are payable on or in respect of Common Stock comprising
part of the Reference Package (as defined below), in an amount per
whole share of this Series equal to the aggregate amount of dividends
or other distributions (other than dividends or distributions payable
in Common Stock of the Corporation) that would be payable on such date
to a holder of the Reference Package and (B) on the last day of March,
June, September and December in each year, in an amount per whole
share of this Series equal to the excess (if any) of $______* over the
aggregate dividends paid per whole share of this Series during the
three month period ending on such last day. Each such dividend shall
be paid to the holders of record of shares of this Series on the date,
not exceeding seventy days preceding such dividend or distribution
payment date, fixed for the purpose by the Board of Directors in
advance of payment of each particular dividend or distribution.
Dividends on each full and each fractional share of this Series shall
be cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional share
originally issued after a dividend record
--------------------
* Insert an amount equal to 1/4 of 1% of the Exercise Price divided by the
number of shares purchasable upon exercise of one Right (i.e., a guaranteed
1% dividend). Where a Right is exercisable for one-hundredth of a share,
this simplifies to one-fourth the Exercise Price.
-2-
date and on or prior to the dividend payment date to which such record
date relates shall not be entitled to receive the dividend payable on
such dividend payment date or any amount in respect of the period from
such original issuance to such dividend payment date.
The term "Reference Package" shall initially mean 100 shares of
Common Stock, par value $.625 per share ("Common Stock"), of the
Corporation. In the event the Corporation shall at any time after the
close of business on _________, 19__* (A) declare or pay a dividend on
any Common Stock payable in Common Stock, (B) subdivide any Common
Stock or (C) combine any Common Stock into a smaller number of shares,
then and in each such case the Reference Package after such event
shall be the Common Stock that a holder of the Reference Package
immediately prior to such event would hold thereafter as a result
thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of
full cumulative dividends, as herein provided on this Series.
So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking
junior to this Series as to dividends and upon liquidation) shall be
declared or paid or set aside for payment or other distribution
declared or made upon the Common Stock or upon any other stock ranking
junior to this Series as to dividends or upon liquidation, nor shall
any Common Stock nor any other stock of the Corporation ranking junior
to or on a parity with this Series as to dividends or upon liquidation
--------------------
* For a certificate of designation relating to shares to be issued pursuant
to Section 2.3 of the Rights Agreement, insert the Separation Time. For a
certificate of designation relating to shares to be issued pursuant to
Section 3.1(d) of the Rights Agreement, insert the Flip-in Date.
-3-
be redeemed, purchased or otherwise acquired for any consideration (or
any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation (except
by conversion into or exchange for stock of the Corporation ranking
junior to this Series as to dividends and upon liquidation), unless,
in each case, the full cumulative dividends (including the dividend to
be due upon payment of such dividend, distribution, redemption,
purchase or other acquisition) on all outstanding shares of this
Series shall have been, or shall contemporaneously be, paid.
(iv) In the event of any merger, consolidation, reclassification
or other transaction in which the shares of Common Stock are exchanged
for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of this Series shall at the
same time be similarly exchanged or changed in an amount per whole
share equal to the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, that a
holder of the Reference Package would be entitled to receive as a
result of such transaction.
(v) In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, the
holders of full and fractional shares of this Series shall be
entitled, before any distribution or payment is made on any date to
the holders of the Common Stock or any other stock of the Corporation
ranking junior to this Series upon liquidation, to be paid in full an
amount per whole share of this Series equal to the greater of (A)
$__________* or (B) the aggregate amount distributed or to be
distributed prior to such date in connection with such liquidation,
dissolution or winding up to a holder of the Reference
--------------------
* Insert an amount equal to 100 times the Exercise Price in effect as of the
Separation Time.
-4-
Package (such greater amount being hereinafter referred to as the
"Liquidation Preference"), together with accrued dividends to such
distribu tion or payment date, whether or not earned or declared. If
such payment shall have been made in full to all holders of shares of
this Series, the holders of shares of this Series as such shall have
no right or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to the first
paragraph of this Section (v), no such distribution shall be made on
account of any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this
Series, ratably in proportion to the full distributable amounts for
which holders of all such parity shares are respectively entitled upon
such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then outstanding
shall be entitled to be paid out of assets of the Corporation
available for distribution to its shareholders all amounts to which
such holders are entitled pursuant to the first paragraph of this
Section (v) before any payment shall be made to the holders of Common
Stock or any other stock of the Corporation ranking junior upon
liquidation to this Series.
For the purposes of this Section (v), the consolidation or merger
of the Corporation with any other corporation shall not be deemed to
constitute a liquidation, dissolution or winding up of the
Corporation.
-5-
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of shareholders
required by law or by the Charter, as amended, of the Corporation,
each whole or fractional share of this Series shall, on any matter,
vote as a class with any other capital stock comprising part of the
Reference Package and voting on such matter and shall have the number
of votes thereon that a holder of the Reference Package would have.
3. The amendment was duly adopted by the board of directors without
shareholder action on [date]. No shareholder action was required.
4. The amendment shall be effective when filed by the Secretary of
State and is being submitted for filing pursuant to the Tennessee Business
Corporation Act.
FIRST TENNESSEE NATIONAL
CORPORATION
By:
------------------------------------
Name:
Title:
Date:
-6-
