EXHIBIT 4.1
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RIGHTS AGREEMENT
between
XXXXX FINANCIAL CORPORATION
and
XXXXX UNION BANK AND TRUST COMPANY
(Rights Agent)
Dated as of March 1, 2001
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions....................................................................1
Section 2. Appointment of Rights Agent............................................................5
Section 3. Issue of Right Certificates............................................................5
Section 4. Form of Right Certificates.............................................................7
Section 5. Countersignature and Registration......................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.........................10
Section 8. Cancellation and Destruction of Right Certificates....................................13
Section 9. Availability of Preferred Stock.......................................................13
Section 10. Preferred Stock Record Date...........................................................14
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights....................15
Section 12. Certificate of Adjusted Purchase Price or Number of Shares............................23
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..................24
Section 14. Fractional Rights and Fractional Shares...............................................26
Section 15. Rights of Action......................................................................28
Section 16. Agreement of Right Holders............................................................28
Section 17. Right Certificate Holder Not Deemed a Shareholder.....................................29
Section 18. Concerning the Rights Agent...........................................................29
Section 19. Merger or Consolidation or Change of Name of Rights Agent.............................30
Section 20. Duties of Rights Agent................................................................31
Section 21. Change of Rights Agent................................................................34
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Section 22. Issuance of New Right Certificates....................................................35
Section 23. Redemption............................................................................35
Section 24. Exchange..............................................................................36
Section 25. Notice of Certain Events..............................................................38
Section 26. Notices...............................................................................39
Section 27. Supplements and Amendments............................................................39
Section 28. Successors............................................................................40
Section 29. Benefits of this Agreement............................................................40
Section 30. Severability..........................................................................40
Section 31. Governing Law.........................................................................40
Section 32. Counterparts..........................................................................40
Section 33. Descriptive Headings..................................................................40
Section 34. Determinations and Actions by the Board of Directors..................................40
Exhibit A - Terms of Junior Participating Series A Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights Plan
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RIGHTS AGREEMENT
Rights Agreement (hereinafter "this Agreement"), dated as of March 1, 2001
between XXXXX FINANCIAL CORPORATION, an Indiana corporation (the "Company"), and
Xxxxx Union Bank and Trust Company (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has authorized and declared
a dividend of one preferred share purchase right (a "Right") for each share of
Common Stock (as hereinafter defined) of the Company outstanding as of the close
of business on March 9, 2001 (the "Record Date"), each Right representing the
right to purchase one one-hundredth of a share of Preferred Stock (as
hereinafter defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right with
respect to each share of Common Stock that shall become outstanding between the
Record Date and the Expiration Date (as such terms are hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the Common Stock
of the Company then outstanding, but shall not include the Company, the Xxxxxx
Family (as hereinafter defined), any employee benefit plan of the Company or of
any Affiliate of the Company, or any person or entity holding Common Stock for
or pursuant to the terms of any such plan. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of (a) an acquisition of
Common Stock by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 15% or more of the Common Stock of the Company then outstanding or (b) the
acquisition by such Person of newly-issued Common Stock directly from the
Company (it being understood that a purchase from an underwriter or other
intermediary is not directly from the Company); provided, however, that if a
person shall become the Beneficial Owner of 15% or more of the Common Stock
of the Company then outstanding by reason of share repurchases by the Company or
the receipt of newly-issued Common Stock directly from the Company and shall,
after such share repurchases or direct issuance by the Company, become the
Beneficial Owner of any additional Common Stock of the Company, then such Person
shall be deemed to be an "Acquiring Person"; provided further, however, that any
transferee from such Person who becomes the Beneficial Owner of 15% or more of
the Common Stock of the Company then outstanding shall nevertheless be deemed to
be an "Acquiring Person." Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph, has become such inadvertently, and such Person
divests as promptly as practicable (and in any event within ten business days
after notification by the Company) a sufficient number of shares of Common Stock
so that such Person would no longer be an Acquiring Person, as defined pursuant
to the foregoing provisions of this paragraph, then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of this Agreement.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act (as such term is hereinafter defined), as in effect on the date
of this Agreement; provided, however, that for purposes of this Agreement,
neither the Company, nor any employee benefit plan of the Company or of any
Affiliate of the Company, nor any person or entity holding Common Stock for or
pursuant to the terms of any such plan, shall be included as an affiliate of any
Person unless the context otherwise requires.
A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(a) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(b) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding, whether
written or oral (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these
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Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange; (B)
the sole or shared right to vote or dispose (including any such right
pursuant to any agreement, arrangement or understanding, whether written or
oral); provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2)
is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or (C) "beneficial ownership" (as
determined pursuant to Rule 13d-3 (or any successor rule) of the General
Rules and Regulations under the Exchange Act); or
(c) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding, whether written or oral (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the
proviso to clause (B) of subparagraph (b) of this definition) or disposing
of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used with
reference to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in Indiana are authorized or
obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M.,
Columbus, Indiana time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Columbus, Indiana time, on the next
succeeding Business Day.
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"Common Stock" when used with reference to the Company shall
mean the shares of common stock, no par value per share, of the Company. "Common
Stock" when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest voting power of such
other Person or the equity securities or other equity interest having power to
control or direct the management of such other Person.
"Distribution Date" shall have the meaning set forth in
Section 3 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Expiration Date" shall have the meaning set forth in Section
7 hereof.
"Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
"Xxxxxx Family" shall mean any and all of Xxxxxxx X. Xxxxxx,
Chairman of the Company as of the date hereof, and his father, Xxxxx Xxxxxx, and
members of their immediate families (including parents, siblings and children)
and any descendants and spouses of any of the foregoing individuals, any trusts
for the benefit of the foregoing individuals and the trustees thereof, and any
of their respective Associates and Affiliates (other than the Company and its
subsidiaries).
"Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
"Preferred Stock" shall mean shares of preferred stock,
without par value, of the Company, designated "Junior Participating Series A
Preferred Stock" and having the rights and preferences set forth in the Form of
Certificate of Designations, Preferences and Rights of Junior Participating
Series A Preferred Stock attached to this Agreement as Exhibit A.
"Purchase Price" shall have the meaning set forth in Section 4
hereof.
"Redemption Date" shall have the meaning set forth in Section
7 hereof.
"Right Certificate" shall have the meaning set forth in
Section 3 hereof.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Stock Acquisition Date" shall mean the first date of public
announcement or other disclosure (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
promulgated under the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
"Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly, by
such Person.
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"Triggering Event" shall mean any event described in Section
11(a)(ii) or Section 13(a) hereof.
Any determination or interpretation required in connection with any of the
definitions contained in this Section 1 shall be made by the Board of Directors
of the Company in their good faith judgment, which determination shall be final
and binding on the Rights Agent.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date or (ii) the close of business on the
fifteenth business day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than the Company, the
Xxxxxx Family, any employee benefit plan of the Company or of any Affiliate of
the Company or any entity holding Common Stock for or pursuant to the terms of
any such plan) of, or of the first public announcement of the intention of any
Person (other than the Company, the Xxxxxx Family, any employee benefit plan of
the Company or of any Affiliate of the Company or any entity holding Common
Stock for or pursuant to the terms of any such plan) to commence, a tender or
exchange offer the consummation of which would result in any Person becoming the
Beneficial Owner of Common Stock aggregating 15% or more of the then outstanding
Common Stock (including any such date which is after the date of this Agreement
and prior to the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Stock registered in the names of the holders thereof (which certificates
shall also be deemed to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in connection with
the transfer of the underlying Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if
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requested, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Stock as of the close of business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each share of Common Stock so held. As
of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights Plan, in
substantially the form of Exhibit C hereto (the "Summary of Rights Plan"), by
first class, postage-prepaid mail, to each record holder of Common Stock as of
the close of business on the Record Date (other than any Acquiring Person or any
Associate or Affiliate of any Acquiring Person), at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Stock outstanding as of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates registered in the names of the holders
thereof together with the Summary of Rights Plan, and registered holders of
Common Stock shall also be the registered holders of the associated Rights.
Until the Distribution Date (or the Expiration Date), the transfer of any
certificate for Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights Plan, shall also constitute the transfer of the
Rights associated with the Common Stock represented thereby. Upon surrender to
the transfer agent for the Common Stock of any such certificates for transfer or
reissuance, the Company may, but need not, cause the transfer agent to affix a
legend on any new certificates representing such Common Stock to the effect and
in the form set forth in Section 3(c) below.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or delivered from the
Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates representing such Common
Stock shall also be deemed to be certificates for Rights. Certificates
representing both Common Stock and Rights in accordance with this Section 3
which are executed and delivered (whether the shares of Common Stock represented
thereby are originally issued, delivered from the Company's treasury or are
presented for transfer) by the Company (including, without limitation,
certificates representing reacquired Common Stock referred to in the last
sentence of this paragraph (c)) after the Record Date but prior to the earlier
of the Distribution Date or the Expiration Date shall have impressed on, printed
on, written on or otherwise affixed to them a legend substantially equivalent to
the following:
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THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN XXXXX
FINANCIAL CORPORATION (THE "COMPANY") AND XXXXX UNION BANK AND TRUST
COMPANY, DATED AS OF MARCH 1, 2001 (THE "RIGHTS AGREEMENT"), THE TERMS
OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH
RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER
BE EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER
OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT, AS IN EFFECT ON
THE DATE OF MAILING, WITHOUT CHARGE PROMPTLY AFTER RECEIPT OF A
WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS
OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, SHALL
BECOME NULL AND VOID.
Until the Distribution Date, the Rights associated with the Common Stock shall
be evidenced by the certificates representing the associated Common Stock alone,
and the transfer of any such certificate shall also constitute the transfer of
the Rights associated with the Common Stock represented thereby. In the event
that the Company purchases or acquires any Common Stock after the Record Date
but prior to the Distribution Date, any Rights associated with such Common Stock
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Stock which are no longer
outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase Preferred Stock and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or quotation system
on which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the
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Right Certificates shall entitle the holders thereof to purchase such number of
one one-hundredths of a share of Preferred Stock as shall be set forth therein
at the price per one one-hundredth of a share of Preferred Stock set forth
therein (the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes an Acquiring Person, or (iii) a
transferee of an Acquiring Person (or such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding, whether written or oral,
regarding the transferred Rights or (B) a transfer which is part of a plan,
arrangement or understanding, whether written or oral, which has as a primary
purpose or effect avoidance of Section 7(e) hereof, and any Right Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this
sentence, shall contain (to the extent feasible and otherwise reasonably
identifiable as such) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.
The provisions of Section 7(e) shall apply whether or not any Right Certificate
actually contains the foregoing legend.
Section 5. Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Company by its Chairman, President, any of its Vice
Presidents, or its Treasurer, either manually or by facsimile signature and
shall be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall
8
be duly countersigned by the Rights Agent and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who shall have signed
any of the Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased to
be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its office designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e), 14
and 24 hereof, at any time after the close of business on the Distribution Date,
and at or prior to the Close of Business on the Expiration Date, any Right
Certificate or Right Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of shares of Preferred Stock (or,
following a Triggering Event, Common Stock, other securities or property, as the
case may be) as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate accompanied by such documents as the Rights Agent may
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deem appropriate and the Company shall have been provided with such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 4 and 7 hereof,
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder
of any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the Purchase Price with respect to each surrendered Right for
the total number of shares of Preferred Stock (or other securities or property,
as the case may be) as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on March 1, 2011 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date"), (the earliest of (i) or (ii) being herein
referred to as the "Expiration Date") or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right shall initially be
$100, shall be subject to adjustment from time to time as provided in Sections
11 and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
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(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate on
the reverse side of the Right Certificate duly executed, accompanied by such
documents as the Rights Agent may deem appropriate, payment of the Purchase
Price for the shares (or other securities or property, as the case may be) to be
purchased and an amount equal to any applicable transfer tax required to be paid
by the holder of such Right Certificate in accordance with Section 9 hereof by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Stock (or make available, if the Rights Agent is
the transfer agent of the Preferred Stock) certificates for the number of shares
of Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the Preferred Stock issuable upon exercise of the Rights
with a depositary agent, requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a share of Preferred
Stock as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash and/or distribute
other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or property are
available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered holder of
such Right Certificate or to his or her duly authorized assigns, subject to the
provisions of Section 14 hereof.
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(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes an Acquiring Person, or (iii) a transferee of an Acquiring Person (or
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming an Acquiring Person and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding, whether written or oral, regarding the transferred
Rights or (B) a transfer which the Board of Directors otherwise concludes in
good faith is part of a plan, arrangement or understanding (whether written or
oral) which has as a primary purpose or effect the avoidance of this Section
7(e), shall become null and void without any further action, and any holder of
such Rights shall thereupon have no rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise, from and
after the occurrence of a Triggering Event. The Company shall use all reasonable
efforts to insure that the provisions of this Section 7(e) hereof are complied
with, but shall have no liability to any holder of Rights for the inability to
make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless the certificate
contained in the form of election to purchase set forth on the reverse side of
the Right Certificate surrendered for such exercise shall have been completed
and signed by the registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
(g) Notwithstanding any statement to the contrary contained
in this Agreement or in any Right Certificate, if the Distribution Date or the
Stock Acquisition Date shall occur prior to the Record Date, the provisions of
this Agreement, including (without limitation) Sections 3 and 11(a)(ii), shall
be applicable to the Rights upon their issuance to the same extent such
provisions would have been applicable if the Record Date were the date of this
Agreement.
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Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, cause such canceled Right Certificates to be destroyed, and in such
case cause a certificate of destruction to be delivered to the Company.
Section 9. Availability of Preferred Stock.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued preferred
stock (and, following the occurrence of a Triggering Event, Common Stock to the
extent feasible and/or other securities) or any preferred stock (and, following
the occurrence of a Triggering Event, Common Stock to the extent feasible and/or
other securities) held in its treasury, the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock to the extent
feasible and/or other securities) that will be sufficient to permit the exercise
in full of all outstanding Rights.
(b) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities), subject to payment of
the Purchase Price, be duly and validly authorized and issued and fully paid and
nonassessable shares.
(c) Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section 7 or pursuant
to the provisions contemplated by Section 11(a)(ii) hereof (a) unless and until
any regulatory approvals required for the issuance and/or sale of Preferred
Stock or Common Stock upon such exercise have been obtained, (b) in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained or (c) if the exercise thereof, or the issuance and/or sale of the
Preferred Stock or Common Stock to be purchased
13
upon such exercise, shall not be permitted under the Company's Restated Articles
of Incorporation, as may hereafter be further amended, or any applicable law or
administrative or judicial regulation or order.
(d) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Stock (or Common Stock and/or other securities,
as the case may be) upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Stock (or Common Stock and/or other securities, as the case may be) in a name
other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or to deliver any certificates or
depositary receipts for Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for Preferred Stock (or Common Stock and/or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the shares or securities
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares or securities on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Stock
(or Common Stock and/or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other
14
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of shares of Preferred Stock covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred
Stock payable in Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares of Preferred Stock or (D) issue any shares of
its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, he or she
would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of
one Right. If an event occurs which would require an adjustment under
both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the
event any Person becomes an Acquiring Person, each holder of a Right,
except as provided below and in Section 7(e) hereof, shall thereafter
have a right to receive, upon exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable, in accordance with the terms of this Agreement and in
lieu of shares of Preferred Stock, such number of shares of
15
Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the then current
per share market price of the Company's Common Stock (determined
pursuant to Section 11(d) hereof) on the date of the occurrence of
such event. In the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company shall not
take any action which would eliminate or diminish the benefits
intended to be afforded by the Rights.
(iii) In lieu of issuing Common Stock of the Company
in accordance with Section 11(a)(ii) hereof, the Company may, in the
sole discretion of the Board of Directors, elect to (and, in the event
that the Board of Directors has not exercised the exchange right
contained in Section 24 hereof and there are not sufficient issued but
not outstanding and authorized but unissued shares of Common Stock to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall) take all such action
as may be necessary to authorize, issue or pay, upon the exercise of
the Rights, cash (including by way of a reduction of the Purchase
Price), property, other securities or any combination thereof having
an aggregate value equal to the value of the Common Stock of the
Company which otherwise would have been issuable pursuant to Section
11(a)(ii), which aggregate value shall be determined by a majority of
the Board of Directors. For purposes of the preceding sentence, the
value of the Common Stock shall be determined pursuant to Section
11(d) hereof and the value of any equity securities which a majority
of the Board of Directors determines to be a "common stock equivalent"
(including the Preferred Stock, in such ratio as the Board of
Directors shall determine) shall be deemed to have the same value as
the Common Stock. Any such election by the Board of Directors must be
made and publicly announced within 60 days following the date on which
the event described in Section 11(a)(ii) shall have occurred.
Following the occurrence of the event described in Section 11(a)(ii),
a majority of the Board of Directors then in office may suspend the
exercisability of the Rights for a period of up to 60 days following
the date on which the event described in Section 11(a)(ii) shall have
occurred to the extent that such directors have not determined whether
to exercise the Company's right of election under this
16
Section 11(a)(iii). In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock (or shares having the same
rights, privileges and preferences as the Preferred Stock ("equivalent preferred
shares")) or securities convertible into Preferred Stock or equivalent preferred
shares at a price per share of Preferred Stock or equivalent preferred share (or
having a conversion price per share, if a security convertible into Preferred
Stock or equivalent preferred shares) less than the then current per share
market price of the Preferred Stock (as defined in Section 11(d)) on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of shares
of Preferred Stock outstanding on such record date plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of shares
of Preferred Stock and/or equivalent preferred shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of additional shares of Preferred Stock and/or
equivalent preferred shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent. Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
17
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Stock (including any
such distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then current per share market price of the Preferred Stock on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock and the denominator of which shall be
such current per share market price of the Preferred Stock; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder,
other than under Section 11(a)(iii) hereof, the "current per share
market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for the purpose of any computation under Section
11(a)(iii) hereof, the "current per share market price" of a Security
on any date shall be deemed to be the average of the daily closing
prices per share of such security for 30 consecutive Trading Days
immediately following such date; provided, however, that in the event
that the current per share market price of the Security is determined
during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares
(other than the Rights), or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30
consecutive
18
Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "current per share
market price" shall be appropriately adjusted to reflect the current
market price per share equivalent (ex-dividend) of such Security. The
closing price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to
trading on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by
the Nasdaq National Market ("NASDAQ") or such other system then in
use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Security, the fair
value of such Security on such date (as determined in good faith by
the Board of Directors of the Company) shall be used. The term
"Trading Day" shall mean a day on which the principal national
securities exchange or quotation system on which the Security is
listed or admitted to trading is open for the transaction of business
or, if the Security is not listed or admitted to trading on any
national securities exchange or quotation system, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Stock shall be
determined in accordance with the method set forth in Section
11(d)(i). If the shares of Preferred Stock are not publicly traded,
the "current per share market price" of the Preferred Stock shall be
conclusively deemed to be the current per share market price of the
Common Stock of the Company as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof), multiplied by
one hundred. If neither the shares of Common Stock of the Company nor
the shares of Preferred Stock are publicly held or so listed or
traded, "current per share market price" shall mean the fair value per
share as
19
determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-millionth of a share of Preferred
Stock or one ten-thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than Preferred Stock, thereafter the number of such other shares
so receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in this Section 11, and
the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-hundredths of
a share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Preferred Stock (calculated to the nearest one
one-millionth of a share of Preferred Stock) obtained by (i) multiplying (x) the
number of one one-hundredths of a share covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect
20
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one one-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least ten days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-hundredths of a share of Preferred Stock which were expressed in the
initial Right Certificates issued hereunder.
21
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth of the then par
value, if any, of the Preferred Stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such record
date of the Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any shares of Preferred Stock at less than
the current market price, issuance wholly for cash of shares of Preferred Stock
or securities which by their terms are convertible into or exchangeable for
Preferred Stock, dividends on Preferred Stock payable in Preferred Stock or
issuance of rights, options or warrants referred to hereinabove in Section
11(b), hereafter made by the Company to holders of its Preferred Stock shall not
be taxable to such shareholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock) into
a greater or lesser number of Common Stock, then in any such case (i) the number
of one one-hundredths of a share of Preferred Stock purchasable after such
event upon proper exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a share of Preferred Stock so purchasable
immediately prior to such event by a fraction, the numerator of which is the
number of
22
shares of Common Stock outstanding immediately before such event and the
denominator of which is the number of shares of Common Stock outstanding
immediately after such event, and (ii) each share of Common Stock outstanding
immediately after such event shall have issued with respect to it that number of
Rights which each share of Common Stock outstanding immediately prior to such
event had issued with respect to it. The adjustments provided for in this
Section 11(n) shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is effected.
(o) So long as the shares issuable upon the exercise of
the Rights may be listed on any national securities exchange or included in a
national quotation system, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares reserved for
such issuance to be listed on such exchange or included in such quotation system
upon official notice of issuance upon such exercise.
(p) The Company shall use its best efforts to (i) file, as
soon as practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the Expiration Date. The Company will also take such action, if any, as may be
appropriate under the blue sky laws of the various states. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file such registration
statement or in order to comply with such blue sky laws. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Stock or the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained and may assume that no adjustment has been made
unless and until it shall have received such certificate.
23
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) If after the Stock Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other Person, (y)
any Person shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving corporation of such
merger and, in connection with such merger, all or part of the Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons other than the Company
or one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price multiplied
by the number of one one-hundredths of a share of Preferred Stock for which a
Right is then exercisable, in accordance with the terms of this Agreement and in
lieu of shares of Preferred Stock, such number of validly authorized and issued,
fully paid, non-assessable and freely tradeable shares of Common Stock of the
Principal Party (as hereinafter defined), free and clear of all liens, rights of
call or first refusal, encumbrances or other adverse claims, as shall equal the
result obtained by (A) multiplying the then current Purchase Price by the number
of one one-hundredths of a share of Preferred Stock for which a Right is then
exercisable (or, if such Right is not then exercisable for a number of one
one-hundredths of a share of Preferred Stock, the number of such fractional
shares for which it was exercisable immediately prior to an event described
under Section 11(a)(ii) hereof) and dividing that product by (B) 50% of the then
current per share market price of the Common Stock of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, or otherwise, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its shares of Common Stock in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to assure that the
provisions
24
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter deliverable upon the exercise
of the Rights.
(b) "Principal Party" shall mean:
(i) In the case of any transaction described in (x) or
(y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the surviving entity of
such merger or consolidation (including the Company if applicable);
and
(ii) in the case of any transaction described in (z) of
the first sentence in Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case described in clauses (b)(i) and
(b)(ii): (1) if the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; (2) in case such Person is a
Subsidiary, directly or indirectly, or more than one Person, the Common Stock of
two or more of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value; and (3) in case such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in (1)
and (2) shall apply to each of the chains of ownership having an interest in
such joint venture as if such party were a "Subsidiary" of both or all of such
joint venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have
sufficient number of shares of Common Stock authorized to permit the full
exercise of the Rights and prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as
25
practicable after the date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under
the Securities Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act; and
(iii) take such actions as may be necessary or
appropriate under the blue sky laws of the various states.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that one of the
transactions described in this Section 13(a) shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii) hereof, the Rights
which have not theretofore been exercised shall thereafter become exercisable in
the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there may
be paid to the registered holders of the Right Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right. For the purposes
of this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market,
26
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair value of
the Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions
of a share of Preferred Stock (other than fractions which are integral multiples
of one one-hundredths of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share of Preferred Stock). Fractions of a share of Preferred Stock in integral
multiples of one one-hundredth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-hundredth of a share of Preferred Stock, the
Company may pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For the purposes of this Section 14(b), the current market
value of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price of a share of Preferred Stock (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of a share of Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one share of Common Stock. For purposes
of this Section 14(c), the current market value of one share of Common Stock
shall be the closing price of one share of Common
27
Stock (as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right
expressly waives his or her right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his or her own behalf and for
his or her own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his or her right to exercise the Rights evidenced by such Right Certificate in
the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with appropriate forms and
certificates fully executed;
(c) the Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby
28
(notwithstanding any notations of ownership or writing on the Right Certificates
or the associated Common Stock certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or any other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of one one-hundredths of a
share of Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
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 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder,
if other than the Secretary of the Company, and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements (including any taxes other than income taxes) incurred in the
administration and execution of this Agreement and the exercise and performance
of his, her or its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold him, her or it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in
29
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability arising,
directly or indirectly, therefrom.
The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by him, her or it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Stock or Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered; any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned, and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such
30
cases such Right Certificates shall have the full force provided in the Right
Certificates and in the Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
satisfactory to it (who may be legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability or responsibility to
the Company or to any holder of any Right Certificate in respect of any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of his, her or its duties
under this Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or
suffering or omitting action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, any Vice Chairman, the President, any Vice President, the
Treasurer or the Secretary (unless the Secretary is the Rights Agent) of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company only for, and shall indemnify and hold harmless the Company from and
against, any and all losses, liabilities, costs, damages and expenses (including
attorneys' fees) arising out of or in connection with, the Rights Agent's
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except the Rights Agent's
countersignature thereof); nor shall the Rights Agent be responsible for any
breach
31
by the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall the Rights Agent be responsible for any change
in the exercisability of the Rights (including the Rights becoming void pursuant
to Section 7(e) hereof) or any adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided for in Section 3, 11, 13, 23 or
24, or the ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate furnished pursuant to Section
12 describing a change or adjustment); nor shall the Rights Agent by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or Common Stock to
be issued pursuant to this Agreement or any Right Certificate or as to whether
any shares of Preferred Stock or Common Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of the Rights Agent's duties
hereunder from any one of the Chairman, any Vice Chairman, President, any
Executive Vice President, any Senior Vice President, any Vice President, the
Secretary (unless the Secretary is the Rights Agent) or the Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and the Rights Agent shall not be liable for any action taken
or suffered by the Rights Agent in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Agreement
and the date on and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action taken
by, or omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application (which
date shall not be less than five Business Days after the date such application
is given, unless any such officer shall have consented in writing to an earlier
date) unless, prior to taking any such action (or the effective date in the case
of an omission),
32
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or its Subsidiaries or become
pecuniarily interested in any transaction in which the Company or its
Subsidiaries may be interested, or contract with or lend money to the Company or
its Subsidiaries or otherwise act as fully and freely as though the Rights Agent
were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or its
Subsidiaries or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in the Rights Agent or perform any duty hereunder
either individually or by or through the Rights Agent's attorneys or agents, and
the Rights Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise, transfer, split-up, combination or exchange,
the certificate attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise, transfer,
split-up, combination or exchange without first consulting with the Company.
(k) The Rights Agent shall not be under any duty or
responsibility to insure compliance with any applicable federal or state
securities laws in connection with the issuance, transfer or exchange of Right
Certificates.
(l) The Rights Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more holders of Right
Certificates shall furnish the Rights Agent with security and indemnity to
the Rights Agent's satisfaction for any costs and expenses which may be
incurred.
(m) The Rights Agent shall not be liable for failure to
perform any duties except as specifically set forth herein and no implied
covenants or obligations shall be read into this
33
Agreement against the Rights Agent whose duties and obligations are ministerial
and shall be determined solely by the express provisions hereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock or Preferred Stock by registered or certified mail, and if
following a Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock or Preferred Stock by registered or certified mail, and if
following a Distribution Date, to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his or her Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation or bank organized and doing business under the laws of
the United States or of any other state of the United States, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock or Preferred Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however,
34
or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its
option, prior to the Distribution Date and thereafter at any time prior to such
time as any Person becomes an Acquiring Person, redeem all but not less than all
the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of the Rights
by the Board of Directors may be made effective at such time on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. If redemption of the Rights is to be effective as of a future date,
the Rights shall continue to be exercisable, subject to Section 7 hereof, until
the effective date of the redemption, provided that nothing contained herein
shall preclude the Board of Directors from subsequently causing the Rights to be
redeemed at a date earlier than the previously scheduled effective date of the
redemption. The Company may, at its option, pay the Redemption Price in cash,
Common Stock (based on the current per share market price of the Common Stock at
the time of redemption) or any other form of consideration deemed appropriate by
the Board of Directors.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights (or at the effective time
of such redemption established by the Board of Directors of the Company pursuant
to paragraph (a) of this Section 23), and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after such action of the
Board of Directors ordering the redemption of the Rights or, if later, the
35
effectiveness of the redemption of the Rights pursuant to the last sentence of
paragraph (a), the Company shall mail a notice of redemption to all the holders
of the then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. The Company may, at
its option, discharge all of its obligations with respect to the Rights by (i)
issuing a press release announcing the manner of redemption of the Rights, (ii)
depositing with a bank or trust company having a capital and surplus of at least
$100 million, funds necessary for such redemption, in trust, to be applied to
the redemption of the Rights so called for redemption and (iii) arranging for
the mailing of the Redemption Price to the registered holders of the Rights;
then, and upon such action, all outstanding Rights Certificates shall be null
and void without further action by the Company. Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in this
Section 23, in Section 24 hereof, or in connection with the purchase of Common
Stock prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time after a Triggering Event, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for Common
Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, the Xxxxxx Family, any employee benefit plan of
the Company or any Affiliate of the Company, or any entity holding Common Stock
for or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only
36
right thereafter of a holder of such Rights shall be to receive that number of
shares of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or equivalent preferred
shares, as such term is defined in Section 11(b) hereof) for Common Stock
exchangeable for Rights, at the initial rate of one one-hundredth of a share of
Preferred Stock (or equivalent preferred share) for each share of Common Stock,
as appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Stock pursuant to the terms thereof, so that the fraction of a share
of Preferred Stock delivered in lieu of each share of Common Stock shall have
the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares
of Common Stock or Preferred Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock or Preferred Stock for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractions
of shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of Common
Stock, the Company shall pay to the registered holders of the Right Certificates
with regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this paragraph (e),
the current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant
37
to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose at any time after
the Distribution Date (i) to pay any dividend payable in stock of any class to
the holders of its Preferred Stock or to make any other distribution to the
holders of its Preferred Stock (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preferred Stock rights or warrants to
subscribe for or to purchase any additional Preferred Stock or shares of stock
of any class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding Preferred Stock), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to, any other
Person, (v) to effect the liquidation, dissolution or winding up of the Company,
or (vi) to declare or pay any dividend on the Common Stock payable in Common
Stock or to effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of dividends in Common
Stock), then, in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Stock and/or Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of the Preferred Stock for purposes of such action, and
in the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Stock and/or Preferred Stock, whichever shall be the
earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice shall
38
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Xxxxx Financial Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Xxxxx Union Bank and Trust Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Secretary
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company. Notices or demands sent by mail shall be deemed given or
made three business days after the date they are sent.
Section 27. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights.
39
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Stock).
Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Indiana and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 34. Determinations and Actions by the Board of Directors. 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 the Company or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, interpretations and determinations
(including, for purposes of clause (ii) below, all omissions with respect to the
40
foregoing) which are done or made by the Board in good faith, shall (i) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Right Certificates and all other parties, and (ii) not subject the Board of
Directors to any liability to the holders of the Right Certificates.
41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
Attest: XXXXX FINANCIAL CORPORATION
By: /s/ XXXXXXX X. XXXXX By: /s/ XXXXXXX X. XXXXXX
--------------------------- ------------------------------------
Xxxxxxx X. Xxxxx, Secretary Xxxxxxx X. Xxxxxx, Chairman
XXXXX UNION BANK AND TRUST COMPANY
Witness: By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------
Xxxxxxx X. Xxxxxxxx, Senior Vice
President - Investments
/s/ XXXXX X. XXXXXX
-------------------------------
Xxxxx X. Xxxxxx, Assistant
Secretary
42
EXHIBIT A TO RIGHTS AGREEMENT
-----------------------------
XXXXX FINANCIAL CORPORATION
TERMS OF JUNIOR PARTICIPATING
SERIES A PREFERRED STOCK
5.31 By resolution adopted on March 1, 2001, the Board of Directors of
Xxxxx Financial Corporation (the "Company"), has established and designated
a series of Preferred shares to be called the Junior Participating Series A
Preferred Stock, to consist of 400,000 shares having the following terms:
5.31.1 Designation and Amount. There shall be a series of Preferred Stock
of the Company which shall be designated as "Junior Participating Series A
Preferred Stock" without par value (hereinafter called "Junior Preferred
Stock"), and the number of shares constituting such series shall be 400,000.
Such number of shares may be increased or decreased by resolution of the Board
of Directors and by the filing of an amendment to the Restated Articles of
Incorporation pursuant to the provisions of the Indiana Business Corporation Law
stating that such increase or reduction has been so authorized; provided,
however, that no decrease shall reduce the number of shares of Junior Preferred
Stock to a number less than that of the shares then outstanding plus the number
of shares issuable upon exercise of outstanding rights, options or warrants or
upon conversion of outstanding securities issued by the Company.
5.31.2 Dividends and Distributions.
(a) The holders of shares of Junior Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash to
holders of record on the first business day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Junior Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, one hundred times the aggregate per share amount of all cash dividends,
and one hundred times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock (hereinafter defined) or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock, no par value per share, of the Company (the "Common Stock") since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Junior Preferred Stock. In the event the Company shall
at any time (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case, the amount to which holders of shares of Junior Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying each such amount by a fraction, the
numerator of which is the number of shares of Common Stock
A-1
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(b) The Company shall declare a dividend or distribution on
the Junior Preferred Stock as provided in paragraph (a) above at the time it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock).
(c) No dividend or distribution (other than a dividend payable
in shares of Common Stock) shall be paid or payable to the holders of shares of
Common Stock unless, at the same time as such payment is made with respect to
the Common Stock or prior thereto, all accrued but unpaid dividends to the date
of such dividend or distribution shall have been paid to the holders of shares
of Junior Preferred Stock.
(d) Dividends shall begin to accrue and be cumulative on
outstanding shares of Junior Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Junior Preferred Stock,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Junior Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Junior Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Junior Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date fixed for the
payment thereof.
5.31.3 Voting Rights. Each share of Junior Preferred Stock shall entitle
the holder thereof to one hundred votes on all matters submitted to a vote of
the shareholders of the Company. Except as otherwise provided herein or by law,
the holders of shares of Junior Preferred Stock and the holders of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Company.
5.31.4 Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock as provided in Section
5.31.2 are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Junior Preferred Stock
outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock;
A-2
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Preferred Stock,
except dividends paid ratably on the Junior Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Preferred Stock,
provided that the Company may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock
of the Company ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Junior Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Junior Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(b) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (a) of this Section, purchase
or otherwise acquire such shares at such time and in such manner.
5.31.5 Liquidation, Dissolution or Winding Up.
(a) Upon any voluntary or involuntary liquidation, dissolution
or winding up of the Company, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock unless, prior thereto,
the holders of Junior Participating Series A Preferred Stock shall have received
for each whole share the greater of (i) $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, or (ii) one hundred times the aggregate per share
amount received by holders of Common Stock (the "Series A Liquidation
Preference").
(b) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Junior Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences.
5.31.6 Consolidation, Merger, etc. In case the Company shall enter into any
consolidation, merger, share exchange, combination or other transaction in which
the shares of Common Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case the shares of
Junior Preferred Stock shall at the same time be similarly exchanged or
A-3
converted in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to one hundred times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is converted or
exchanged. In the event the Company shall at any time (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or conversion of shares of
Junior Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
5.31.7 Redemption. The shares of a Junior Preferred Stock shall not be
redeemable by the Company. The preceding sentence shall not limit the ability of
the Company to purchase or otherwise deal in such shares of stock to the extent
permitted by law.
5.31.8 Fractional Shares. Junior Preferred Stock may be issued in fractions
of a share which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Junior
Preferred Stock.
A-4
EXHIBIT B TO RIGHTS AGREEMENT
-----------------------------
[Form of Right Certificate]
Certificate No. R-__________ __________ Rights
NOT EXERCISABLE AFTER MARCH 1, 2011 OR EARLIER IF THE RIGHTS EXPIRE
UNDER CERTAIN CIRCUMSTANCES OR ARE REDEEMED BY THE COMPANY. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS
SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY
THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.]1
Right Certificate
XXXXX FINANCIAL CORPORATION
This certifies that _______________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of March 1, 2001 (the "Rights Agreement"),
between XXXXX FINANCIAL CORPORATION, an Indiana corporation (the "Company"), and
Xxxxx Union Bank and Trust Company, as Rights Agent (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 p.m. (Central Time) on
March 1, 2011, or notice of redemption or exchange at the office of the Rights
Agent (or its successors as Rights Agent) designated for such purpose, one
one-hundredth of a fully paid non-assessable share of Junior Participating
Series A Preferred Stock without par value (the "Preferred Stock") of the
Company at a purchase price of $____ per one one-hundredth of a share (the
"Purchase Price") upon presentation and surrender of this Right Certificate with
the appropriate Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of March 1, 2001, based on the Preferred Stock
--------
1 The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
B-1
as constituted at such date. Capitalized terms not defined in this Right
Certificate that are defined in the Rights Agreement shall have the meanings
ascribed to them in the Rights Agreement.
Upon the occurrence of a Triggering Event, if the Rights evidenced by this
Right Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) under certain circumstances specified in the
Rights Agreement, a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of any such Triggering
Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of Preferred Stock or other securities, which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under certain circumstances specified in such Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal corporate trust office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of shares of Preferred Stock as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right at any time prior to such time as any Person becomes an
Acquiring Person.
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock, which may at the
election of the Company be evidenced by depository receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained
B-2
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 Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of _______________, _____
ATTEST: XXXXX FINANCIAL CORPORATION
__________________________________ By:_____________________________________
Name: Name:
Title: Secretary Title:
Countersigned:
__________________________________
By:_______________________________
Authorized Signature
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Right Certificate.)
FOR VALUE RECEIVED _____________________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _____________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Date:_________________, ____
________________________________________
Signature
Signature Guaranteed:
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement)
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated:_______________, ____ ________________________________________
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
B-4
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise Rights represented by the Right
Certificate.)
To: XXXXX FINANCIAL CORPORATION
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number:____________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:
Please insert social security
or other identifying number:____________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
Dated:_______________, 20__ ________________________________________
Signature
Signature Guaranteed:
B-5
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated:_______________, 20__ ___________________________________
Signature
NOTICE
------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-6
EXHIBIT C TO RIGHTS AGREEMENT
-----------------------------
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE
SUMMARY OF RIGHTS PLAN
----------------------
On March 1, 2001, the Board of XXXXX FINANCIAL CORPORATION (the "Company")
declared a dividend distribution of one Right for each outstanding share of
common stock, no par value per share (the "Common Stock"), of the Company to
shareholders of record at the close of business on March 9, 2001 (the "Record
Date"). Except as described below, each Right, when exercisable, entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Junior Participating Series A Preferred Stock, without par value (the "Preferred
Stock"), at a price of $100 per one one-hundredth share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and Xxxxx Union
Bank and Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Right Certificates will be
distributed. Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons, other
than Xxxx Xxxxxx, the Company's Chairman, and his family, has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date") or (ii) 15
business days (or such later date as may be determined by action of the Board of
Directors of the Company (the "Board of Directors") prior to the time that any
person becomes an Acquiring Person) following the commencement of (or a public
announcement of an intention to make) a tender or exchange offer if, upon
consummation thereof, such person or group would be the beneficial owner of 15%
or more of such outstanding shares of Common Stock (the earlier of such dates
being called the "Distribution Date"), the Rights will be evidenced by the
Common Stock certificates together with a copy of this Summary of Rights Plan
and not by separate certificates.
The Rights Agreement also provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Stock. Until the
Distribution Date (or earlier redemption, expiration or termination of the
Rights), the transfer of any certificates for Common Stock, with or without a
copy of this Summary of Rights Plan, will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificates. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Stock as of the close of business on the Distribution Date and,
thereafter, such separate Right Certificates alone will evidence the Rights.
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The Rights are not exercisable until the Distribution Date and will expire
at the earliest of (i) March 1, 2011 (the "Final Expiration Date"), (ii) the
redemption of the Rights by the Company as described below, and (iii) the
exchange of all Rights for Common Stock as described below.
In the event that any person (other than the Company, the Xxxxxx Family or
any person receiving newly-issued shares of Common Stock directly from the
Company) becomes the beneficial owner of 15% or more of the then outstanding
shares of Common Stock, each holder of a Right will thereafter have the right to
receive, upon exercise at the then current exercise price of the Right, Common
Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right. The
Rights Agreement contains an exemption for any issuance of Common Stock by the
Company directly to any person (for example, in a private placement or an
acquisition by the Company in which Common Stock is used as consideration), even
if that person would become the beneficial owner of 15% or more of the Common
Stock, provided that if such person acquires any additional shares of Common
Stock that transaction would not be exempt.
In the event that, at any time following the Stock Acquisition Date, the
Company is acquired in a merger or other business combination transaction or 50%
or more of the Company's assets or earning power are sold, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon exercise at the then current exercise price of the Right, common
stock of the acquiring or surviving company having a value equal to two times
the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of any of the
events set forth in the preceding two paragraphs (the "Triggering Events"), any
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will immediately
become null and void.
The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights, are subject
to adjustment from time to time to prevent dilution, among other circumstances,
in the event of a stock dividend on, or a subdivision, split, combination,
consolidation or reclassification of, the Preferred Stock or the Common Stock,
or a reverse split of the outstanding shares of Preferred Stock or the Common
Stock.
At any time after the acquisition by a person or group of affiliated or
associated persons (other than the Xxxxxx Family) of beneficial ownership of 15%
or more of the outstanding Common Stock and prior to the acquisition by such
person or group of 50% or more of the outstanding Common Stock, the Board of
Directors may exchange the Rights (other than Rights owned by such person or
group, which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. The Company will not be required to issue fractional shares
of Preferred Stock or Common Stock (other than fractions in multiples of one
one-hundredth of a share of Preferred Stock) and, in lieu thereof, an
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adjustment in cash may be made based on the market price of the Preferred Stock
or Common Stock on the last trading date prior to the date of exercise.
At any time after the date of the Rights Agreement until the time that a
person becomes an Acquiring Person, the Board of Directors may redeem the Rights
in whole, but not in part, at a price of $.01 per Right, subject to adjustment
(the "Redemption Price"), which may (at the option of the Company) be paid in
cash, shares of Common Stock or other consideration deemed appropriate by the
Board of Directors. Upon the effectiveness of any action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the Redemption Price.
Issuance of Preferred Stock or Common Stock upon exercise of the Rights
will be subject to any necessary regulatory approvals. Until a Right is
exercised, the holder thereof, as such, will have no rights as a shareholder of
the Company under the plan, including, without limitation, the right to vote or
to receive dividends.
The provisions of the Rights Agreement may be amended by the Company,
except that any amendment adopted after the time that a person becomes an
Acquiring Person may not adversely affect the interests of holders of Rights.
As of March 1, 2001 there were 21,152,653 shares of Common Stock
outstanding and approximately 6,616,938 shares of Common Stock reserved for
issuance under employee benefit plans or pursuant to conversion of convertible
securities. Each outstanding share of Common Stock at the close of business on
March 9, 2001 will receive one Right. Four hundred thousand (400,000) shares of
Preferred Stock will be reserved for issuance in the event of exercise of the
Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on the Rights being redeemed or a substantial
number of Rights being acquired, and under certain circumstances the Rights
beneficially owned by such a person or group may become void. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors because, if the Rights would become exercisable as a result
of such merger or business combination, the Board of Directors may, at its
option, at any time prior to the time that any Person becomes an Acquiring
Person, redeem all (but not less than all) of the then outstanding Rights at the
Redemption Price.
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement.
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