EXHIBIT (4)(b)
EXECUTION COPY
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AMENDED AND RESTATED RIGHTS AGREEMENT
between
THE XXXXXXXX AND XXXXXXXX COMPANY
and
MELLON INVESTOR SERVICES LLC
as Rights Agent
--------------------------------------------------------------------------------
Dated as of April 18, 2001
TABLE OF CONTENTS
PAGE
SECTION 1. CERTAIN DEFINITIONS....................................................................................2
SECTION 2. APPOINTMENT OF RIGHTS AGENT...........................................................................10
SECTION 3. ISSUANCE OF RIGHT CERTIFICATES........................................................................11
SECTION 4. FORM OF RIGHT CERTIFICATES............................................................................14
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.....................................................................15
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR
STOLEN RIGHT CERTIFICATES.........................................................................16
SECTION 7. EXERCISE OF RIGHTS PURCHASE PRICE; EXPIRATION DATE OF RIGHTS..........................................17
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES....................................................21
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.........................................................22
SECTION 10. PREFERRED SHARE RECORD DATE..........................................................................24
SECTION 11. ADJUSTMENT TO PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS..........................25
SECTION 12. CERTIFICATION OF CERTAIN ADJUSTMENTS.................................................................40
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.................................40
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES..............................................................47
SECTION 15. RIGHTS OF ACTION.....................................................................................49
SECTION 16. AGREEMENT OF RIGHT HOLDERS...........................................................................49
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER....................................................51
SECTION 18. CONCERNING THE RIGHTS AGENT..........................................................................51
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT............................................53
SECTION 20. DUTIES OF RIGHTS AGENT...............................................................................54
SECTION 21. CHANGE OF RIGHTS AGENT...............................................................................57
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES...................................................................59
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SECTION 23. REDEMPTION...........................................................................................59
SECTION 24. NOTICE OF CERTAIN EVENTS.............................................................................61
SECTION 25. NOTICES..............................................................................................62
SECTION 26. SUPPLEMENTS AND AMENDMENTS...........................................................................63
SECTION 27. SUCCESSORS...........................................................................................64
SECTION 28. DETERMINATIONS AND ACTIONS TAKEN BY THE BOARD OF DIRECTORS...........................................64
SECTION 29. BENEFITS OF THIS AGREEMENT...........................................................................65
SECTION 30. GOVERNING LAW........................................................................................65
SECTION 31. COUNTERPARTS.........................................................................................66
SECTION 32. DESCRIPTIVE HEADINGS.................................................................................66
SECTION 33. SEVERABILITY.........................................................................................66
SECTION 34. EXCHANGE.............................................................................................66
Exhibit A - Form of Certificate of Amendment to Amended Articles of
Incorporation
Exhibit B - Form of Right Certificate
Exhibit C - Form of Summary of Rights
ii
AMENDED AND RESTATED RIGHTS AGREEMENT
-------------------------------------
AMENDED AND RESTATED RIGHTS AGREEMENT dated as of April 18, 2001 (the
"Agreement") between The Xxxxxxxx and Xxxxxxxx Company, an Ohio corporation (the
"Company"), and Mellon Investor Services LLC, a New Jersey limited liability
company (successor to Xxxxx Fargo Bank Minnesota, N.A., a national banking
association), as rights agent (the "Rights Agent").
WITNESSETH
----------
WHEREAS, on April 18, 2001 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company (the "Board") authorized and declared a
dividend distribution of one (1) right (a "Right") for each share of the
Company's Class A Common Shares, no par value per share (the "Class A Shares"),
and one-twentieth (1/20th) of a Right for each share of the Company's Class B
Common Shares, no par value per share (the "Class B Shares"), outstanding as of
the Close of Business (as hereinafter defined) on May 6, 2001 (the "Record
Date"), each Right initially representing the right to purchase one
one-thousandth (1/1000th) of a share (a "Unit") of the Company's Series B
Participating Preferred Shares (the "Preferred Shares", as defined hereinafter)
upon the terms and subject to the conditions hereinafter set forth; and
authorized the issuance of one (1) Right (subject to adjustment) with respect to
each Class A Share and one-twentieth (1/20th) of a Right (subject to adjustment)
with respect to each Class B Share that shall become outstanding between the
Record Date and the earlier of the Distribution Date (as hereinafter defined) or
the Expiration Date (as hereinafter defined) and, to the extent provided in
Section 22 hereof, with respect to each such share issued after the Distribution
Date and prior to the Expiration Date; and
WHEREAS, the Company desires to set forth certain terms and conditions
governing the Rights;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter defined)
who or which, together with all Affiliates (as hereinafter defined) and
Associates (as hereinafter defined) of such Person, shall be the Beneficial
Owner (as hereinafter defined) of securities of the Company constituting a
Substantial Block (as hereinafter defined); PROVIDED, HOWEVER, that an
Acquiring Person shall not include an Exempt Person (as hereinafter
defined).
Notwithstanding the foregoing, (A) no Person shall become an
Acquiring Person solely as the result of an acquisition of Class A Shares
by the Company that, by reducing the number of shares outstanding,
increases the proportionate number of Class A Shares beneficially owned by
a Person to equal or exceed a Substantial Block of the Class A Shares then
outstanding; provided, however, that if such Person becomes the Beneficial
Owner of a Substantial Block of Class A Shares solely by reason of
purchases of Class A Shares by the Company and shall, after such purchases
by the Company, become the Beneficial Owner of any additional Class A
Shares which has the effect of increasing such Person's percentage
ownership of the then-outstanding Class A Shares by any means whatsoever,
then such Person shall be deemed to be an Acquiring Person, and (B) if the
Board of Directors determines that a Person who would otherwise be an
Acquiring
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Person has become such inadvertently (including, without limitation,
because (1) such Person was unaware that it beneficially owned a
Substantial Block of Class A Shares or (2) such Person was aware of
the extent of such Beneficial Ownership but such Person acquired
Beneficial Ownership of such Class A Shares without the intention to
change or influence the control of the Company) and such Person
divests itself as promptly as practicable of a sufficient number of
Class A Shares so that such Person would no longer be an Acquiring
Person, then such Person shall not be deemed to be, or have been, an
Acquiring Person for any purposes of this Agreement, and no Share
Acquisition Date shall be deemed to have occurred. All questions as to
whether a Person who would otherwise be an Acquiring Person has become
such inadvertently shall be determined by the Board.
(b) "Adjustment Spread" shall have the meaning set forth in Section
34(a)(ii) hereof.
(c) "Adjustment Units" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934 as in effect as of the date
hereof.
(e) "Agreement" shall have the meaning set forth in the first
paragraph hereof.
(f) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is
3
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of any conversion, exchange or purchase
rights, warrants or options, or otherwise; PROVIDED, HOWEVER, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) 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) securities issuable upon the
exercise of Rights at any time prior to the occurrence of a Section
11(a)(ii) Event or a Section 13 Event (as such terms are hereinafter
defined); or (C) securities issuable from and after the occurrence of
a Section 11(a)(ii) Event or a Section 13 Event upon the exercise of
Original Rights or Rights acquired by such Person or any of such
Person's Affiliates or Associates pursuant to Section 11(i) hereof in
connection with any adjustment made with respect to any Original
Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has beneficial ownership of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," any
securities under this Section l(f)(ii) as a result of an agreement,
arrangement or understanding to vote such security which: (A) arises
solely by reason of the grant of a revocable proxy or consent to any
Person who
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shall have obtained such proxy or consent pursuant to and as a result
of a public proxy or consent solicitation subject to and conducted in
accordance with the applicable provisions of the Exchange Act and the
applicable rules and regulations thereunder and (B) also is not then
reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are "beneficially owned," directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing)
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in clause (A) of subparagraph (ii) of
this Section l(f)) or disposing of any securities of the Company;
provided, HOWEVER, that nothing in this Section l(f) shall cause a
Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities
acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of forty (40) days after
the date of such acquisition.
(g) "Board" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.
(h) "Business Day" shall mean any day other than a Saturday, Sunday or
day on which banking institutions in the State of Ohio or the state in
which the office of the Rights Agent is located are authorized or obligated
by law or executive order to close.
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(i) "Certificate of Amendment" shall mean the Certificate of Amendment
to Amended Articles of Incorporation setting forth the express terms and
provisions of the Preferred Shares, a form of which is attached hereto as
Exhibit A.
(j) "Class A Shares" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(k) "Class B Shares" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(l) "Close of Business" on any given date shall mean 5:00 P.M.,
Dayton, Ohio time, on such date; PROVIDED, HOWEVER, that if such date is
not a Business Day, it shall mean 5:00 P.M., Dayton, Ohio time, on the next
succeeding Business Day.
(m) "Common Shares" when used with reference to the Company shall mean
the Class A Shares and the Class B Shares or any other shares of capital
stock of the Company into which such stock shall be reclassified or
changed. "Common Shares" when used with reference to any Person that is
organized in corporate form, other than the Company, shall mean the capital
stock or other equity security with the greatest voting power, or the
equity securities or other equity interest having power to control or
direct the management, of such Person or, if such Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person and which has issued any such outstanding capital
stock, equity securities or equity interest. "Common Shares" when used with
reference to any Person that is not be organized in corporate form shall
mean units of beneficial interest which (i) shall represent the right to
participate generally in the profits and losses of such Person (including,
without limitation, any flow-through tax benefits resulting from an
ownership interest in such
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Person) and (ii) shall be entitled to exercise the greatest voting power of
such Person or, in the case of a limited partnership, shall have the power
to remove the general partner or partners.
(n) "Company" shall have the meaning set forth in the first paragraph
of this Agreement.
(o) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(p) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(q) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(r) "Equivalent Preference Shares" shall have the meaning set forth in
Section 11(b) hereof.
(s) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(t) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary
(as hereinafter defined) of the Company, and (iii) any employee benefit
plan or employee stock plan of the Company or of any Subsidiary of the
Company or any Person organized, appointed, established or holding Common
Shares by, for or pursuant to, the terms of any such plan.
(u) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(v) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
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(w) "NASDAQ" shall mean the National Association of Securities Dealers
Automated Quotations.
(x) "Original Rights" shall mean Rights which were acquired by a
Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a), 3(c) or Section 22 hereof.
(y) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, association, unincorporated
organization, trust or other entity, as well as any syndicate or group
deemed to be a person under Section 14(d)(2) of the Exchange Act, and shall
include any successor (by merger or otherwise) of such entity.
(z) "Preferred Shares" shall mean the Series B Participating Preferred
Shares, no par value per share, of the Company having the voting powers,
designation, preferences and rights and qualifications, limitations and
restrictions set forth in the Certificate of Amendment, a form of which is
attached hereto as Exhibit A.
(aa) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(bb) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof as adjusted pursuant to Section 11(a)(ii) and Section 13(a) hereof.
(cc) "Record Date" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(dd) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(ee) "Right" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.
(ff) "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
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(gg) "Rights Agent" shall have the meaning set forth in the first
paragraph of this Agreement.
(hh) "Rights Dividend Declaration Date" shall have the meaning set
forth in the WHEREAS clause at the beginning of this Agreement.
(ii) "Schedule 13G Filer" shall mean any Person who satisfies both of
the criteria set forth in Rule 13d-1(b)(1)(i) and Rule 13d-1(b)(1)(ii) of
the General Rules and Regulations under the Exchange Act as in effect on
the date of this Agreement, and who has reported such ownership on Schedule
13G (or any comparable or successor report) under the Exchange Act, in each
case, as determined by the Board.
(jj) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(kk) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ll) "Section 13 Event" shall have the meaning set forth in Section
13(a) hereof.
(mm) "Section 34(a)(i) Exchange Ratio" has the meaning set forth in
Section 34(a)(i) hereof.
(nn) "Section 34(a)(ii) Exchange Ratio" has the meaning set forth in
Section 34(a)(ii) hereof.
(oo) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(pp) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(qq) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed
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pursuant to Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(rr) "Subsidiary" shall mean, with respect to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient, in the absence of
contingencies, to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
beneficially owned, or otherwise controlled, by such Person and any
Affiliate of such Person.
(ss) "Substantial Block" shall mean 15% or more in number of the
outstanding Class A Shares; PROVIDED, however, that, for any Schedule 13G
Filer (as defined herein), a "Substantial Block" shall mean 20% or more in
number of the outstanding Class A Shares.
(tt) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(uu) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(vv) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(ww) "Unit" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time act as Co-Rights Agent or appoint such Co-Rights
Agents as it may deem necessary or
10
desirable. Any actions which may be taken by the Rights Agent pursuant to the
terms of this Agreement may be taken by any such Co-Rights Agent. The Rights
Agent shall have no duty to supervise, and shall not be liable for the acts or
omissions of any such Co-Rights Agent.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the earlier of the Close of Business on (i) the tenth
Business Day (or, if such tenth Business Day occurs before the Record Date, the
Close of Business on the Record Date) after the Stock Acquisition Date or (ii)
the tenth Business Day (or, if such tenth Business Day occurs before the Record
Date, the Close of Business on the Record Date), or such specified or
unspecified later date as may be determined by action of the Board, after the
date that a tender or exchange offer by any Person (other than an Exempt Person)
is first published, sent or given within the meaning of Rule 14d-4(a) of the
General Rules and Regulations under the Exchange Act, if, upon consummation
thereof, such Person, together with its Affiliates and Associates, would be the
Beneficial Owner of a Substantial Block (irrespective of whether any shares are
actually purchased pursuant to such offer) (the earlier of the dates set forth
in clauses (i) and (ii) above being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the Common Shares of the Company
registered in the names of the holders of the Common Shares of the Company
(which certificates for Common Shares of the Company shall be deemed also to be
certificates for Rights) and not by separate Right Certificates and (y) each
Right or fraction thereof will be transferable only in connection with the
transfer of the underlying Common Shares (including a transfer by the Company).
As promptly as practicable after the Distribution Date, the Rights Agent will
send, by first-class, postage-prepaid mail, to each record holder of the Common
Shares of the Company as of the Close of Business on the Distribution Date, as
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shown by the records of the Company, at the address of such holder shown on such
records, one or more certificates for Rights, in substantially the form of
Exhibit B hereto (each such certificate, a "Right Certificate"), evidencing one
(1) Right for each Class A Share and one-twentieth (1/20th) of a Right for each
Class B Share so held, subject to adjustment as provided herein and to the
provisions of Section 14(a) hereof. As of and after the Close of Business on the
Distribution Date, the Rights will be evidenced solely by the Right
Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder of its Common Shares
as of the Close of Business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for the Common
Shares outstanding as of the Close of Business on the Record Date, until the
earlier of the Close of Business on the Distribution Date or the Expiration
Date, the Rights will be evidenced by such certificates for the Common Shares
together with the Summary of Rights and the registered holders of the Common
Shares shall also be the registered holders of the associated Rights. Until the
earlier of the Close of Business on the Distribution Date or the Expiration
Date, the surrender for transfer of any of the certificates for the Common
Shares of the Company in respect of which Rights have been issued, with or
without a copy of the Summary of Rights attached, shall also constitute the
transfer of the Rights associated with the Common Shares evidenced by such
certificates.
(c) Rights shall be issued in respect of all Common Shares of the
Company which shall become outstanding after the Record Date but prior to the
earlier of the Close of Business on the Distribution Date and the Expiration
Date, and, to the extent provided in Section
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22 hereof, in respect of Common Shares of the Company issued after the Close of
Business on the Distribution Date and prior to the Expiration Date. Certificates
for Common Shares of the Company that shall become outstanding or be transferred
after the Record Date but prior to the earlier of the Close of Business on the
Distribution Date and the Expiration Date shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Amended and Restated Rights
Agreement between The Xxxxxxxx and Xxxxxxxx Company (the "Company") and
Mellon Investor Services LLC (successor to Xxxxx Fargo Bank Minnesota,
N.A.), as Rights Agent, dated as of April 18, 2001, as the same shall
be amended from time to time (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of 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 within five days after receipt of a
written request therefor. Under certain circumstances, as provided in
the Rights Agreement, Rights beneficially owned by an Acquiring Person
or any Associate or Affiliate thereof (as such terms are defined in the
Rights Agreement), whether by or on behalf of such Person or by any
subsequent holder, may become null and void. The Rights shall not be
exercisable, and shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the issuance to such
holder, or the exercise by such holder, of the Rights in such
jurisdiction shall not have been obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until the
earlier of the Close of Business on the Distribution Date and the Expiration
Date, the Rights associated with the Common Shares of the Company evidenced by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificates shall also constitute the
surrender for transfer of the Rights associated with the Common Shares of the
Company evidenced by such certificates.
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Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof) shall be in
substantially the form of 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 and which do not alter the rights, duties
or obligations of the Rights Agent, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Right Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders thereof
to purchase such number of Units as shall be set forth therein, as the same may
from time to time be adjusted as provided herein, at the price per Unit set
forth therein, as the same may from time to time be adjusted as provided herein
(such exercise price per Unit, the "Purchase Price").
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
hereof that evidences Rights beneficially owned by (i) an Acquiring Person or
any Associate or Affiliate of such Acquiring Person, (ii) a transferee of any
such Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from such Acquiring Person (or such
14
Associate or Affiliate) to holders of equity interests in such Acquiring Person
(or such Associate or Affiliate) or to any Person with whom such Acquiring
Person (or such Associate or Affiliate) has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of the provisions 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)
the following legend:
The Rights evidenced 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, under certain circumstances as provided
in the Rights Agreement, this Right Certificate and the Rights evidenced
hereby may become null and void as provided in Section 7(e) of the Rights
Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or any Vice President, either manually
or by facsimile, engraved, stamped or printed signature, and by the Treasurer or
any Assistant Treasurer or the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile, engraved, stamped or printed
signature. The Right Certificates shall be countersigned, manually or by
facsimile, by the Rights Agent and shall not be valid for any purpose unless so
countersigned. Although any officer of the Company whose manual or facsimile
signature is affixed to any Right Certificate ceases to be such officer before
the Right Certificate is delivered, such Right Certificate shall be effective in
all respects when countersigned by the Rights Agent and delivered; 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
15
Company to sign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date (and, if the Rights Agent is not
the transfer agent with respect to the Common Shares, receipt by the Rights
Agent of all relevant information), the Rights Agent will keep or cause to be
kept, at its office or offices designated as the appropriate place for surrender
of Right Certificates upon exercise or transfer, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each Right Certificate, the
certificate number and the date of each Right Certificate.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section
14 hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to 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
such number of Units (or other securities, cash or assets, as the case may be)
as the Right Certificate or Right Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) 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 or offices of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be
16
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate or Right Certificates until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate or Right Certificates
and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14 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 from the holders of Right Certificates of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of such 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 valid Right Certificate and of indemnity or security satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, the Company will execute and deliver a new Right Certificate
of like tenor to the, Rights Agent for countersignature and delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
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 including, without limitation, the restrictions on
exercisability set forth in Section 9(d), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time on or after the Close of
17
Business on the Distribution Date upon surrender of the Right Certificate, with
the form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase
Price for the total number of Units (or other securities, cash or assets, as the
case may be) as to which such surrendered Rights are exercised, prior to the
earliest of (i) the Close of Business on May 6, 2011 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof or (iii) the time at which the Rights expire pursuant to Section 13(d)
hereof (the earliest of the dates set forth in clauses (i), (ii) and (iii) being
herein referred to as the "Expiration Date").
(b) The initial Purchase Price for each Unit shall be $105.00 and shall
be subject to adjustment from time to time as provided in Section 11 and Section
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate evidencing exercisable Rights,
with the form of election to purchase and certificate duly executed, accompanied
by payment (in cash, or by certified bank check or money order payable to the
order of the Company), with respect to the Rights so exercised, of the Purchase
Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) for
each Unit (or other securities, cash or assets, as the case may be) to be
purchased and an amount equal to any applicable tax or charge required to be
paid by the holder of the Rights pursuant hereto (in cash, or by certified check
or money order payable to the order of the Company), the Rights Agent shall,
subject to Section 7(f) hereof, (i) promptly (A) requisition from any transfer
agent of the Preferred Shares (or make available, if the Rights Agent is the
transfer agent for such shares) a certificate for the number of Units to be
purchased
18
(and the Company hereby irrevocably authorizes and directs its transfer agent to
comply with all such requests), or (B) if the Company shall have elected under
Section 14(b) hereof to deposit the total number of Preferred Shares issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts evidencing interests in such number of
Units as are to be purchased (in which case certificates for the Preferred
Shares evidenced by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company hereby authorizes and directs the
depositary agent to comply with such request, (ii) if and 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) promptly after
receipt of such Preferred Shares 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) if and when appropriate, after receipt thereof, promptly
deliver any such cash to be paid in lieu of issuance of fractional shares to or
upon the order of the registered holder of such Right Certificate; PROVIDED,
HOWEVER, that in the case of a purchase of securities other than Preferred
Shares, the Rights Agent shall promptly take the appropriate actions with
respect to such securities to be purchased as shall as nearly as practicable
correspond to the actions described in the foregoing clauses (i) through (iv).
In the event that the Company is obligated to issue other securities of the
Company (including Common Shares), pay cash or distribute assets pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash or assets are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right, but shall
not be obligated, to require prior to the occurrence of a Section 11(a)(ii)
Event or a Section
19
13 Event that, upon any exercise of Rights, such number of Rights be exercised
so that only whole Preferred Shares would be issued.
(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, 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, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, the Right
beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of
such Acquiring Person or (ii) a transferee of any such Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee (A) after such
Acquiring Person becomes such or (B) prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (1) a transfer
(whether or not for consideration) from such Acquiring Person (or such Associate
or Affiliate) to holders of equity interests in such Acquiring Person (or such
Associate or Affiliate) or to any Person with whom such Acquiring Person (or
such Associate or Affiliate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (2) a transfer which the Board
has determined is part of a plan, arrangement or understanding 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 no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall notify the Rights Agent promptly
of any determination by the Board pursuant to Section 7(e)(ii)(B)(2) and shall
use reasonable efforts to insure that the provisions of Section 4(b) hereof and
this
20
Section 7(e) are complied with, but neither the Company nor the Rights Agent
shall have any liability to any holder of Right Certificates or other Person as
a result of the Company's failure to make any determinations with respect to an
Acquiring Person or any of the Affiliates, Associates or transferees thereof
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 of any Right Certificate upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) properly completed and signed the certificate contained in
the form of assignment or election to purchase set forth on the reverse side of
the Right Certificate surrendered for such assignment or exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) of the Rights evidenced by such Right Certificate or
Affiliates or Associates thereof as the Company and the Rights Agent shall
reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
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 cancelled Right
Certificates to the Company, or shall, at the written request of the Company and
after any Securities and Exchange Commission required retention period, destroy
such cancelled
21
Right Certificates and, in such case, shall deliver a certificate of destruction
thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it shall cause to be reserved
and kept available out of its authorized and unissued Preferred Shares (and, if
necessary, out of its authorized and unissued Common Shares or other securities
or out of its authorized and issued shares held in its treasury), the number of
Preferred Shares (and, if necessary, Common Shares of the Company or other
securities) that, as provided in this Agreement (including without limitation
Section 11(a)(iii) hereof), will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) The Company covenants and agrees to take all such action as may be
necessary to insure that all Preferred Shares (and, if necessary, Common Shares
of the Company or other securities) delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable.
(c) The Company covenants and agrees that, except as set forth in
Section 6 hereof, 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 certificates evidencing Preferred
Shares (or Common Shares of the Company or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required to pay
any tax or charge 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 evidencing interests in a number of
Preferred Shares (or Common Shares of the
22
Company or other securities, as the case may be) in a name other than that of,
the registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or deliver any certificates evidencing Preferred Shares (or
Common Shares of the Company or other securities, as the case may be) or
depositary receipts evidencing interests in Preferred Shares in a name other
than that of the registered holder upon the exercise of any Rights until any
such tax or charge shall have been paid (any such tax or charge being payable by
the holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax or charge is
due.
(d) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event or a Section 13 Event in which the consideration to be delivered
by the Company upon exercise of the Rights has been determined in accordance
with this Agreement, or as soon as is required by law following the Distribution
Date, as the case may be, 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 earlier of (A) the date as of
which the Rights are no longer exercisable for such securities or (B) the
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights. The Company
may, acting by resolution of its Board, temporarily suspend, for a period of
time not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(d), the exercisability of the Rights in
order to prepare and file such registration statement and permit it
23
to become effective. Upon any such suspension, the Company shall promptly notify
the Rights Agent thereof and issue a public announcement stating that the
exercisability of the Rights has been suspended, as well as a public
announcement (with prompt notice thereof to the Rights Agent) at such time as
the suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained, the exercise thereof shall not be permitted under applicable law
or a registration statement shall not have been declared effective.
(e) So long as the Preferred Shares (and, where applicable, any Common
Shares of the Company or other securities) issuable and deliverable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all Preferred Shares reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.
Section 10. PREFERRED SHARE RECORD DATE. Each Person in whose name any
certificate for a number of Preferred Shares (or Common Shares of the Company 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
Preferred Shares (or Common Shares of the Company or other securities, as the
case may be) evidenced 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 all applicable taxes or charges) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date on
which the Company's transfer books for the Preferred Shares (or Common Shares of
the Company or other securities,
24
as the case may be) are closed, such Person shall be deemed to have become the
record holder of such shares (fractional or otherwise) on, and such certificate
shall be dated, the next succeeding Business Day on which the Company's transfer
books for the Preferred Shares (or Common Shares of the Company or other
securities, as the case may be) are open; and PROVIDED FURTHER, HOWEVER, that if
delivery of the Units is delayed as a result of a failure to register such Units
pursuant to Section 9(c), such Persons shall be deemed to have become the record
holders of such Units only when such Units first become deliverable. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a shareholder of the Company with respect
to shares for which the Rights shall be exercisable, except as provided in
Section 17 hereof.
Section 11. ADJUSTMENT TO PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price and the number and kind of shares, or
fractions thereof, subject to purchase upon the exercise of 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 or distribution on the Preferred
Shares payable in Preferred Shares, (B) subdivide or split the outstanding
Preferred Shares into a greater number of shares, (C) combine or
consolidate the outstanding Preferred Shares into a smaller number of
shares or effect a reverse split of the outstanding Preferred Shares or (D)
issue any Preferred Shares in a reclassification of the capital stock of
the Company (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 Section 7(e) hereof and this
Section 11(a), the Purchase Price in effect at the
25
time of the record date for such dividend or distribution or of the
effective date of such subdivision, combination or reclassification, and
the number of Units issuable per Right on such date, shall be adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the aggregate
number of Units which, if such Right had been exercised immediately prior
to such date and exercised at a time when the transfer books for the
Preferred Shares were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event (a "Section 11(a)(ii) Event") that any Person (other
than an Exempt Person), alone or together with its Affiliates and
Associates (other than an Exempt Person), shall, at any time after the date
of this Agreement, become the Beneficial Owner of a Substantial Block,
unless the event causing such threshold to be crossed is an acquisition of
beneficial ownership of Class A Shares pursuant to a tender or exchange
offer for all outstanding Class A Shares at a price and on terms determined
by the Board, after receiving advice from one or more investment banking
firms, to be (A) a price which is fair to the holders of Class A Shares
(taking into account all factors which the Board deems relevant, including,
without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize
maximum value) and (B) otherwise in the best interests of the
26
Company and its shareholders, then, promptly following the first occurrence
of any such Section 11(a)(ii) Event, proper provision shall be made to
adjust the Rights so that each holder of a Right, except as provided below
and in Section 7(e) hereof, shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of Units as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number
of Units for which a Right was exercisable immediately prior to the first
occurrence of such Section 11(a)(ii) Event, whether or not such Right was
then exercisable, and (y) dividing that product (which product, following
such first occurrence, as the same may be adjusted as provided herein,
shall thereafter be referred to as the "Purchase Price" for each Right
(regardless of the number of Units purchasable upon the exercise of a
Right) and for all purposes of this Agreement) by 50% of the Current Market
Price of one Unit on the date of such first occurrence (such number of
Units being hereinafter referred to as the "Adjustment Units").
(iii) In lieu of issuing Units in accordance with Section 11(a)(ii)
hereof, the Company, acting by resolution of its Board, may, and, in the
event that the number of Preferred Shares which is authorized by the
Company's Amended Articles of Incorporation but not outstanding or reserved
for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit exercise in full of the Rights in accordance with
Section 11(a)(ii) hereof, the Company, acting by resolution of its Board,
shall (A) determine the excess of (1) the value of the Adjustment Units
issuable upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price attributable to each Right (such excess being hereinafter
referred to as the "Spread") and (B) with respect to
27
each Right (subject to Section 7(e) hereof), make adequate provision to
substitute for the Adjustment Units, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common
Shares or other equity securities of the Company, (4) debt securities of
the Company, (5) other assets or (6) any combination of the foregoing
which, when added to any Units issued upon such exercise, have an aggregate
value equal to the Current Value, where such aggregate value has been
determined by action of the Board based upon the advice of a nationally
recognized investment banking firm selected by the Board; PROVIDED,
HOWEVER, if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the
date on which the Company's right of redemption pursuant to Section 23
hereof, as such date may be amended pursuant to Section 26 hereof, expires
(the later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring payment of
the Purchase Price, Units or Common Shares of the Company (to the extent
available) and then, if necessary, cash, which shares or cash have an
aggregate value equal to the Spread. If, after the occurrence of a Section
11(a)(ii) Event, the number of Preferred Shares that is authorized by the
Company's Amended Articles of Incorporation but not outstanding or reserved
for issuance for purposes other than upon exercise of the Rights are not
sufficient to permit exercise in full of the Rights in accordance with
Section 11(a)(ii) hereof and the Company, acting by resolution of its
Board, shall determine in good faith that it is likely that sufficient
additional Preferred Shares could be authorized for issuance upon exercise
in full of the Rights, the thirty (30)
28
day period set forth above may be extended to the extent necessary, but not
beyond the Expiration Date or more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek shareholder
approval for the authorization of such additional shares (such period as it
may be extended, the "Substitution Period"). To the extent that the Company
determines that some action is to be taken pursuant to the first or second
sentence of this Section 11(a)(iii), the Company (x) shall provide, subject
to Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek such
shareholder approval for the authorization of additional shares or to
decide the appropriate form of distribution to be made pursuant to the
first sentence of this Section 11(a)(iii) and to determine the value
thereof. In the event of any such suspension, the Company shall promptly
notify the Rights Agent thereof and issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement (with prompt notice to the Rights Agent) at
such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of each Unit shall be the Current Market
Price of one Unit on the date of the first occurrence of the Section
11(a)(ii) Trigger Date.
(b) In the event that the Company shall at any time after the date of
this Agreement fix a record date for the issuance of rights, options or warrants
to all holders of Preferred Shares entitling them (for a period expiring within
forty-five (45) calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having substantially the same rights,
privileges and preferences as the Preferred Shares ("Equivalent Preference
Shares")) or securities convertible into Preferred Shares or Equivalent
Preference Shares at a
29
price per Preferred Share or Equivalent Preference Share (or having a conversion
price per share, if a security convertible into Preferred Shares or Equivalent
Preference Shares) less than the Current Market Price per Preferred Share 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, of which the numerator shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares or Equivalent Preference Shares which the aggregate
subscription or purchase price of the total number of Preferred Shares or
Equivalent Preference Shares so to be offered (or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Market Price, and of which the denominator shall be the number
of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares or Equivalent Preference Shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
by delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. Such adjustments shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not issued, 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.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving
30
corporation or any reclassification of the Preferred Shares) of evidences of
indebtedness, cash or assets (other than a regular periodic cash dividend or a
dividend or distribution payable in Preferred Shares) or subscription or other
rights, options 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, of which the numerator shall be the Current Market
Price per Preferred Share on such record date, less the fair market value (as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes) of the portion of the assets, cash or evidences of indebtedness so to
be distributed or of such subscription or other rights, options or warrants
applicable to one Preferred Share, and of which the denominator shall be such
Current Market Price per Preferred Share; provided that the Purchase Price shall
not be reduced below zero. 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
computations made pursuant to Section 11(a)(iii) hereof), the "Current Market
Price" per share of Preferred Stock on any date shall be deemed to be the
average of the daily closing prices per Preferred Share for the thirty (30)
consecutive Trading Days (as such term is defined in the last sentence of this
Section 11(d)(i)) immediately prior to such date and for the purposes of
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per Preferred Share on any date shall be deemed to be the average of the
daily closing prices per Preferred Share for the ten (10) consecutive Trading
Days immediately following such date;
31
provided, however, that in the event that the Current Market Price per Preferred
Share is determined during a period following the announcement by the Company of
(a) a dividend or distribution on the Preferred Shares payable in Preferred
Shares or securities convertible into Preferred Shares (other than the Rights)
or (b) any subdivision, split, combination, consolidation, reverse stock split
or reclassification of the Preferred Shares and prior to the expiration of the
requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth
above, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination, consolidation or
reclassification, as the case may be, then, and in each such case, the Current
Market Price shall be appropriately adjusted to reflect ex-dividend trading. The
closing price for any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Preferred Shares are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Preferred
Shares are listed or admitted to trading or, if the Preferred Shares are not
listed or admitted trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ or such other system then in
use, or, if on any such date the Preferred Shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in Preferred Shares selected by the
Board. If the Current Market Price per Preferred Share cannot be determined in
the manner provided above or if the Preferred Shares are not publicly held or
32
not so listed or traded, the Current Market Price per Preferred Share shall be
deemed to be an amount equal to 1,000 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and recapitalizations
with respect to the Preferred Shares or Class A Shares of the Company occurring
after the date of this Agreement) multiplied by the Current Market Price per
Class A Share. If neither the Class A Shares nor the Preferred Shares are
publicly held or so listed or traded, the Current Market Price per Preferred
Share shall mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all purposes of this
Agreement, the Current Market Price of one Unit shall be equal to the Current
Market Price of one Preferred Share divided by 1,000. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares are listed or admitted to trading is open for the transaction of
business or, if the shares are not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the Current Market
Price per Class A Share shall be determined in the same manner as set forth for
the Preferred Shares of the Company in Section 11(d)(i) hereof (other than the
fourth to last, third to last and penultimate sentences thereof). If the Current
Market Price per Class A Share cannot be determined in the manner provided
above, or if the Class A Shares are not publicly held or listed or traded in a
manner described in Section 11(d)(i) hereof, Current Market Price per share
shall mean the fair value per share as determined by a nationally recognized
investment banking firm selected by the Board, or, if no such investment banking
firm is in the good faith judgment of the Board available to make such
determination, in good faith by the Board whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
33
(e) Except as hereinafter provided, 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 cumulated and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent (other than calculations of the Current Market Price per Unit, which shall
be made to the nearest one-thousandth of a cent) or to the nearest one-millionth
of a Preferred Share or one-thousandth of a Class A Share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment or (ii)
the Expiration Date.
(f) If, as a result of the operation of 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 Shares,
thereafter the Purchase Price and 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 Shares contained in Sections 11(a), (b), (c), (d), (e),
(g), (h), (i), (j), (k), (l) and (m), inclusive, and the provisions of Sections
7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares shall apply on
like terms to any such other shares; PROVIDED, HOWEVER, that the Company shall
not be liable for its inability to reserve and keep available for issuance upon
exercise of the Rights pursuant to Section 11(a)(ii) a number of Preferred
Shares greater than the number then authorized by the Company's Amended Articles
of Incorporation but not outstanding or reserved for any other purpose.
34
(g) All Rights originally issued by the Company or transferred
subsequent to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of Units
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and Section 11(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 Units
(calculated to the nearest one-millionth of a Preferred Share) obtained by (i)
multiplying (A) the number of Units covered by a Right immediately prior to such
adjustment of the Purchase Price by (B) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price; PROVIDED, HOWEVER, that if the Purchase Price is adjusted to
zero, then no adjustment shall be made pursuant to the foregoing part of this
Section 11(h) and each Right outstanding immediately prior to the making of such
adjustment shall evidence the right to acquire that number of Units or such
other securities or assets determined in good faith by the Board.
(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 Units purchasable upon the exercise of a Right. Each
of the Rights outstanding after such adjustment in the number of Rights shall be
exercisable for the number of Units 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
35
nearest ten-thousandth of a Right) 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 and promptly notify the Rights Agent of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least 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, any
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 to be so distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Units issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per Unit and the number of Units
36
which were expressed in the initial Right Certificates issued hereunder, but
shall evidence the Purchase Price or number of Units as adjusted or changed.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of one Unit, the Company
shall use its best efforts to 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 Units 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 (and shall promptly notify the
Rights Agent of any such election) until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of the
number of Units and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of Units 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 (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, in the
event of (i) any reclassification of stock of the Company, (ii) any
recapitalization, reorganization or partial liquidation of the Company, (iii)
any consolidation or subdivision of the Preferred Shares, (iv) any issuance of
Preferred Shares (or securities which by their terms are convertible into or
exchangeable for Preferred Shares) wholly for cash at less than the Current
Market Price or (v)
37
any stock dividends or issuance of rights, options or warrants referred above in
this Section 11 or any similar transaction, the Company shall be entitled to
make such further adjustments in the Purchase Price, in addition to those
adjustments expressly required by the other paragraphs of this Section 11, as
and to the extent that the Board in its sole discretion shall determine to be
necessary or appropriate in order for the holders of the Rights in such event to
be treated equitably and in accordance with the purpose and intent of this
Agreement or, subject to the preceding provisions of this Section 11(m), in
order that any such event shall not, in the opinion of counsel for the Company,
result in the shareholders of the Company being subject to any United States
federal income tax liability by reason thereof.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in an action which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof) or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof) if (x) at the time of or immediately after
such consolidation, merger or sale, there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(a) hereof shall
38
have received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as otherwise provided herein or permitted by Section 23 or
Section 26 hereof, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event the Company shall at any time after the Record Date and prior to the
Distribution Date (i) declare a dividend or distribution on any of its Common
Shares payable in Common Shares of the Company or (ii) subdivide or split any of
its outstanding Common Shares into a greater number of shares, (iii) combine or
consolidate any of its outstanding Common Shares into a smaller number of shares
or effect a reverse split of any of its outstanding Common Shares or (iv) issue
any of its Common Shares by reclassification or otherwise than by payment of
dividends or distributions in Common Shares, then in any such case, (x) the
number of Units purchasable after such event upon proper exercise of each Right
shall be adjusted such that the aggregate number of Units so purchasable by the
holder of each Class A Share and/or each Class B Share, as the case may be,
immediately after such event shall equal the number of Units purchasable by such
holder immediately prior to such event and (y) action shall be taken (if the
Board determines that action is required) such that the number of Rights
associated with each Common Share of the Company outstanding immediately or
issued or delivered after such event shall equal that number of Rights
associated with each Common Share of the Company outstanding immediately prior
to such event. The adjustments provided for in this Section 11(p) shall be made
39
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected. If an event occurs which would require
an adjustment under Section 11(a)(ii) and this Section 11(p), the adjustments
provided for in this Section 11(p) shall be in addition and prior to any
adjustment required pursuant to Section 11(a)(ii).
Section 12. CERTIFICATION OF CERTAIN ADJUSTMENTS. Whenever an
adjustment is made as provided in Sections 11 and/or 13 hereof, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for its Common Shares and
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate (or, if prior to the Distribution Date, to
each holder of a certificate evidencing Common Shares) in accordance with
Section 25 hereof. Notwithstanding the foregoing sentence, the failure of the
Company to prepare such certificate or statement or make such filings or
mailings shall not affect the validity of, the force or effect of, or the
requirement for making any such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment contained
therein and shall have no duty with respect to, and shall not be deemed to have
knowledge of, any adjustment unless and until it shall received such
certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event (a "Section 13 Event") that, directly or indirectly,
at any time following the Stock Acquisition Date:
(x) the Company shall consolidate or otherwise combine with, or merge
with or into, any other Person or Persons (other than a Subsidiary of the
Company in a
40
transaction which complies with Section 11(o) hereof) and the Company shall
not be the continuing or surviving corporation of such consolidation,
combination or merger;
(y) any Person or Persons (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall consolidate or
otherwise combine with, or merge with or into, the Company and the Company
shall be the continuing or surviving corporation of such consolidation,
combination or merger and, in connection therewith, all or part of the
outstanding Class A Shares shall be changed into or exchanged for stock or
other securities of any other Person or of the Company or cash or any other
property; or
(z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole and calculated, with respect to the assets reflected
therein, on the basis of the Company's most recent regularly prepared
financial statement) to any other Person or Persons (other than the Company
or any Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof), PROVIDED, HOWEVER, that this clause
(z) of Section 13(a) shall not apply to the proportional distribution by
the Company of assets (including securities) of the Company or any of its
Subsidiaries to all holders of the Company's Common Shares on the basis set
forth for such distributions in the Amended Articles of Incorporation;
then, and in each such case (except as may be contemplated by Section 13(d)
hereof), proper provision shall be made so that:
41
(i) each holder of a Right (except as provided in Section 7(e) hereof)
shall, on or after the later of (A) the date of the first occurrence of any
such Section 13 Event or (B) the date of the expiration of the period
within which the Rights may be redeemed pursuant to Section 23 hereof (as
the same may be amended as provided in Section 26 hereof), have the right
to receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradable Common
Shares of the Principal Party, not subject to any liens, encumbrances,
rights of call, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of Units for which a Right was exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of such Units for which a Right
was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to the
first occurrence of a Section 11(a)(ii) Event), and (2) dividing that
product (which, following the first occurrence of a Section 13 Event, shall
be referred to as the "Purchase Price" for each Right (regardless of the
number of Units purchasable upon the exercise of a Right) and for all
purposes of this Agreement) by 50% of the Current Market Price per Common
Share of such Principal Party on the date of consummation of such Section
13 Event;
(ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement;
42
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event;
(iv) the Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of Common Shares) in
connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Common
Shares thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event;
PROVIDED, HOWEVER, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction
analogous to any of the events described in Section 11 hereof in respect of such
Principal Party, each holder of a Right shall thereupon be entitled to receive,
upon exercise of a Right and payment of the Purchase Price, such cash, shares,
rights, warrants or other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the Common
Shares of the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of its Common Shares) as may be necessary (in a manner analogous to
the applicable adjustments provided for in Section 11 hereof) to permit the
subsequent exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants or other property.
(b) "Principal Party" shall mean
43
(i) in the case of any transaction described in clause (x) or clause
(y) of the first sentence of Section 13(a) hereof, (A) the Person that is
the issuer of the securities into which Common Shares of the Company are
converted in such merger, consolidation or other combination, or, if there
is more than one such issuer, the issuer of the Common Shares which have
the greatest market value or (B) if no securities are so issued, the Person
that is the other party to the merger, consolidation or other combination
and survives said merger (or, if there is more than one such Person, the
Person the Common Shares of which have the greatest market value) or, if
the Person that is the other party to the merger does not survive the
merger, the Person that does survive the merger (including the Company if
it survives); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be determined,
whichever of such Persons as is the issuer of Common Shares having the
greatest market value;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary of another Person the Common Shares of which
are and have been so registered, "Principal Party" shall refer to such other
Person; (2) if such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Shares of two or more of which are and have been so
registered,
44
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Shares having the greatest aggregate market value; and (3) if the Common
Shares of such Person are not and have not been so registered and 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) above 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 ventures 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 Section 13 Event unless prior
thereto the Principal Party shall have a sufficient number of authorized Common
Shares which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed in
accordance with their terms and that such Section 13 Event shall not result in a
default by the Principal Party under this Agreement as the same shall have been
assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof and
further providing that, as soon as practicable on or after the date of any
Section 13 Event 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 (A) to
cause such registration statement to (1) become effective as soon as
practicable after such filing and (2) remain effective
45
(with a prospectus at all times meeting the requirements of the Securities
Act) until the Expiration Date and (B) to similarly comply with applicable
state securities laws;
(ii) use its best efforts to list (or continue the listing of) the
Rights and the securities issuable upon exercise of the Rights on a
national securities exchange;
(iii) 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 (or any
successor form) under the Exchange Act; and
(iv) use its best efforts to obtain waivers of any rights of first
refusal or preemptive rights in respect of the Common Shares of the
Principal Party subject to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers prior to the exercise of the Rights.
In the event that a Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter be exercisable in the manner described in
Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to the contrary, this
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) hereof if (i) such transaction is consummated with
a Person or Persons (or a wholly-owned subsidiary of any such Person or Persons)
who acquired Class A Shares of the Company pursuant to a tender offer or
exchange offer for all outstanding Class A Shares which complies with the
exception provided for in Section 11(a)(ii) hereof, (ii) the price per share for
the Class A Shares offered in such transaction is not less than the respective
price per Class A Share paid to
46
all holders of the Class A Shares whose Class A Shares were purchased pursuant
to such tender offer or exchange offer and (iii) the form of consideration being
offered to the remaining holders of the Class A Shares pursuant to such
transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company may, but shall not be required to, issue fractions of
Rights (other than fractions which are integral multiples of one-twentieth of a
Right) or to distribute Right Certificates which evidence fractional Rights
(other than fractions which are integral multiples of one-twentieth of a Right).
If the Company shall determine not to issue such fractional Rights, in lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights 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 of the Rights for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange,
47
the last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights. 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 shall be used.
(b) The Company may, but shall not be required to, issue fractions of
Preferred Shares (other than fractions which are integral multiples of
one-twentieth of a Unit) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one-twentieth of a Unit). Interests in fractions
of Preferred Shares which are integral multiples of one-twentieth of a Unit 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 of the rights, privileges and preferences to which they
are entitled as beneficial owners of the Preferred Shares. In the event the
Company elects not to issue fractions of Preferred Shares that are not integral
multiples of one-twentieth of a Unit, the Company shall pay to the registered
holders of Right Certificates at the time such Right Certificates are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one Unit. For purposes of this Section 14(b), the current market
value of one Unit shall be the closing price of one Unit (as determined pursuant
to Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
48
(c) The holder of a Right by the acceptance of the Rights expressly
waives such holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, except the rights of action vested in the Rights Agent under this
Agreement, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Shares of the Company); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of Common Shares of the
Company), without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, of Common Shares of the
Company), may, on such holder's own behalf and for such holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such holder's right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by
accepting such Right, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Close of Business on the earlier of the Distribution
Date or the Expiration Date, the Rights shall be evidenced by the
certificates for Common Shares of
49
the Company registered in the name of the holders of such shares (which
certificates for Common Shares of the Company shall also constitute
certificates for Rights) and Rights will be transferable only in connection
with the transfer of Common Shares of the Company;
(b) after the Close of Business on the Distribution Date, the Right
Certificates will be transferable only on the registry books of the Rights
Agent if surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates duly
executed and accompanied by any tax or governmental charge imposed in
accordance with Section 6(a) hereof;
(c) subject to Section 6(a) and Section 7(f) hereof, 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
Share certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Share certificate
made by anyone other than the Company, the Rights Agent or the transfer
agent for the Common Shares) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence in Section 7(e)
hereof, shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary neither
the Company nor the Rights Agent shall have any liability to any holder of
a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling
50
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such
obligation; PROVIDED, HOWEVER, the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as
soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder of any Right or Right Certificate, as such, shall be entitled to vote,
receive dividends or other distributions or be deemed for any purpose the holder
of the number of Units or any other securities of the Company which may at any
time be issuable on the exercise of the Rights evidenced 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 24 hereof),
or to receive dividends, distributions or subscription rights, or to exercise
preemptive rights or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof and the Units or other securities shall have been issued in respect
thereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in
51
the administration, execution and future amendment of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, judgment, fine, penalty, claim, demand, settlement, cost or expense
incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, as each is finally determined by a court of competent
jurisdiction, for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including,
without limitation, the costs and expenses of defending against any claim of
liability in the premises. The indemnity provided herein shall survive the
termination of this Agreement, the resignation or removal of the Rights Agent
and the expiration of the Rights. The reasonable costs and expenses incurred by
the Rights Agent in enforcing the right of indemnification provided herein shall
be paid by the Company; provided, however, that the Company shall not be
responsible for any such costs or expenses unless it is finally determined by a
court of competent jurisdiction that the Rights Agent is entitled to
indemnification pursuant to this Section 18.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Right Certificate
or certificate for Preferred Shares or for other securities of the Company or
any other Person, 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. Anything in this Agreement to the contrary notwithstanding,
in no event shall the Rights Agent be liable for special, indirect, incidental,
punitive or consequential loss or damage of any kind whatsoever (including but
not
52
limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage. Any liability of the Rights Agent under this
Agreement will not exceed an amount equal to three times the amount of annual
fees to be paid by the Company to the Rights Agent during the year in which such
liability arose.
So long as the Rights are listed on the New York Stock Exchange, the
Rights Agent, if its principal offices are located outside New York City, shall
maintain in the New York City area facilities for the servicing of the Rights in
the area of Manhattan located south of Xxxxxxxx Street. Such facilities may
consist of either an office or agency where transactions in the Rights are
serviced directly or a "drop" where Common Share certificates, Right
Certificates and other instruments relating to transactions in Rights may be
received for redelivery to an office or agency outside New York City, all in
accordance with the provisions of Section 6 of the Listed Company Manual of the
New York Stock Exchange.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; PROVIDED, HOWEVER, that such Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21
hereof. The purchase of all or substantially all of the Rights Agent's assets
employed in the performance of transfer agent activities shall be deemed a
merger or consolidation for purposes of this Section 19. In case at the time
such successor
53
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 any predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, 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 (which may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability
54
with respect to any action taken, suffered or omitted by it in good faith and in
accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including without limitation the identity of any Acquiring Person and the
determination of any Current Market Price) be proved or established by the
Company prior to taking, suffering or omitting any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President or any Vice President and by the Secretary or any Assistant
Secretary of the Company or the Treasurer or any Assistant Treasurer and
delivered to the Rights Agent; and such certificate shall be full authorization
and protection to the Rights Agent, and the Rights Agent shall incur no
liability in respect of any action taken, suffered or omitted in good faith by
it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct, as each is finally determined by a
court of competent jurisdiction.
(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 or be required to verify the same (except as to its
countersignature on the Right Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability for, nor be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof
55
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be liable or responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be liable or responsible for any adjustment required
under the provisions of Section 11 or Section 13 or liable or responsible for
the manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after actual notice of
any such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares, Common Shares of the Company or other securities to be issued
pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares, Common Shares of the Company or other securities will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
President, the Chief Financial Officer and the Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with its duties,
and such advice or instructions shall be full authorization or protection to the
Rights Agent and the Rights Agent shall not be liable for any action taken,
suffered or omitted by it in good faith in accordance with instructions of any
such officer.
56
(h) The Rights Agent and any shareholder, affiliate, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
it reasonably believes that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' prior notice in writing mailed to the Company and to each
transfer agent of the Common Shares of the Company and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' prior 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
57
Shares of the Company and the Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit such
holder's Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a Person organized and
doing business under the laws of the United States or of any state of the United
States so long as such Person is in good standing, is authorized under such laws
to exercise shareholder services powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an Affiliate of a Person described in clause (a) above. 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 here under 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 its Common Shares and the
Preferred Shares, and mail a notice thereof to the registered holders of the
Right Certificates. Failure to give any notice
58
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares of stock or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date
(other than upon exercise of a Right) and prior to the redemption of the Rights
or the Expiration Date, the Company (a) shall, with respect to Common Shares so
issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, granted or awarded as of the Distribution Date, or upon the
exercise, conversion or exchange of securities, notes or debentures issued by
the Company as of the Distribution Date, and (b) may, in any other case, if
deemed necessary or appropriate by the Board, issue Right Certificates
evidencing the appropriate number of Rights in connection with such issuance or
sale; PROVIDED, HOWEVER, that (i) no such Right Certificate shall be issued if
and to the extent that the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Right Certificate would be issued and
(ii) no such Right Certificate shall be issued if and to the extent that
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. REDEMPTION.
59
(a) The Board may, at its option, at any time prior to the earlier of
(x) the Close of Business on the tenth Business Day following the day on which
the Stock Acquisition Date occurs (or, if the Stock Acquisition Date shall have
occurred prior to the Record Date, the Close of Business on the tenth Business
Day following the day on which the Record Date occurs) or (y) the Close of
Business on the Final Expiration Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $0.01 per Right (payable in
cash, Class A Shares (based on the Current Market Price of the Class A Shares at
the time of redemption) or any other form of consideration deemed appropriate by
the Board), as such amount may be 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").
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board ordering the redemption of
the Rights, without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held. As
soon as practicable after the action of the Board ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent and
the holders of the then outstanding Rights by mailing such notice to each such
holder at its last address as it appears upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the transfer
agent for the Common Shares of the Company. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
60
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
Section 24. NOTICE OF CERTAIN EVENTS. In case the Company shall
propose, at any time after the Distribution Date:
(a) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular periodic dividend out of earnings or
retained earnings of the Company);
(b) to offer to the holders of Preferred Shares options, rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights or options;
(c) to effect any reclassification of the Preferred Shares (other than
a reclassification including only the subdivision of outstanding Preferred
Shares) or any recapitalization or reorganization of the Company;
(d) to effect any of the transactions referred to in Section 11(a)(ii)
or Section 13 of this Agreement; or
(e) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to each holder of a
Right, to the extent feasible and in accordance with Section 25 hereof, a notice
of such proposed action, which shall specify the date on which such dividend,
distribution, offer, reclassification, recapitalization, reorganization, Section
11(a)(ii) or Section 13 transaction, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of Preferred
Shares, if any such date is to be fixed, and, in the case of a transaction
referred to in clause (d) above, the consequences of the event to the holders of
the Rights under Section 11(a)(ii) and Section 13 hereof, as the case may
61
be. In case of the occurrence of a Section 11(a)(ii) Event or a Section 13
Event, or if the Rights otherwise become exercisable for Common Shares or other
securities, all references in this Section 24 to Preferred Shares shall be
deemed thereafter to refer also to Common Shares or other securities issuable in
respect of the Rights. Such notice shall be so given at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Shares or Preferred Shares,
whichever shall be the earlier. Upon the consummation of such transaction, the
Company (or its successor or assign) shall similarly give notice thereof to each
holder of the Rights, to the extent feasible. The failure to give notice
required by this Section 24 or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote upon any such action.
Section 25. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
The Xxxxxxxx and Xxxxxxxx Company
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
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:
Mellon Investor Services LLC
0 Xxxxxxx Xxxxxx
00
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, if prior
to the Distribution Date, to each holder of a certificate representing Common
Shares of the Company) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement in any respect whatsoever (including, without limitation, any
extension of the period in which the Rights may be redeemed) without the
approval of any holders of certificates representing Common Shares of the
Company. From and after the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of certificates representing Common Shares of the Company or of
Right Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder or (iv) to change or supplement or make any other provisions in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate thereof); PROVIDED, HOWEVER,
that this Agreement may not be supplemented or amended to lengthen,
63
pursuant to clause (iii) of this sentence, (A) whether before or after the
Distribution Date a time period relating to when the Rights may be redeemed or
to modify the ability (or inability) of the Board to redeem the Rights, in
either case at such time as the Rights are not then redeemable or (B) after the
Distribution Date, any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, or the benefits
to, the holders of Rights (other than an Acquiring Person or an Affiliate or
Associate thereof). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment unless the Rights Agent shall have determined in
good faith that such supplement or amendment would adversely affect its rights,
duties, liabilities or obligations under this Agreement. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price or the number of Units for
which a Right is exercisable. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Shares.
Section 27. 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 28. DETERMINATIONS AND ACTIONS TAKEN BY THE BOARD OF DIRECTORS.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of outstanding Class A Shares of which any Person is
the Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The
Board shall have the exclusive power and authority to administer
64
this Agreement and to exercise all rights and powers specifically granted to
such Board, 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, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board or the Company in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Right Certificates and all other parties and (y) not subject the Board to any
liability to the holders of the Rights and Right Certificates.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of Common Shares of the Company) 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, registered holders of Common Shares of the Company).
Section 30. GOVERNING LAW. This Agreement and each Right and Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Ohio 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, except that the rights and
obligations of the Rights Agent under this Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
65
Section 31. 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 32. 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 33. 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, (a) such invalid, void or
unenforceable term, provision, covenant or restriction shall nevertheless be
valid, legal and enforceable to the extent, if any, provided by such court or
authority and (b) 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; PROVIDED, HOWEVER, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth Business Day following the date of such
determination by the Board.
Section 34. EXCHANGE.
(a) (i) The Company may, at its option, at any time after any Person
becomes an Acquiring Person, upon resolution adopted by the Board, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void
66
pursuant Section 7(e)) for Units at an exchange ratio of one Unit per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the Record Date (such exchange ratio being
hereinafter referred to as the "Section 34(a)(i) Exchange Ratio").
Notwithstanding the foregoing, the Company may not effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the shares of Class A Shares then outstanding.
(ii) The Company may, at its option, at any time after any Person
becomes an Acquiring Person, upon resolution adopted by the Board, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to Section 7(e)) for Units at an exchange
ratio specified in the following sentence, as appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the
Record Date. Subject to such adjustment, each Right may be exchanged for that
number of Units obtained by dividing the Adjustment Spread (as defined below) by
the then Current Market Price per Unit on the earlier of (i) the date on which
any Person becomes an Acquiring Person and (ii) the date on which a tender or
exchange offer by any Person (other than an Exempt Person) is first published or
sent or given within the meaning of Rule 14d-4(a) of the General Rules and
Regulations under the Exchange Act, or any successor rule, if upon consummation
thereof such Person would be the Beneficial Owner of a Substantial Block (such
exchange ratio being the "Section 34(a)(ii) Exchange Ratio"). The "Adjustment
Spread" shall equal (x) the aggregate market price on the date of such event of
the number of Adjustment Units minus (y) the Purchase Price. Notwithstanding the
foregoing, the Company may not effect such exchange at any time after any Person
(other than an Exempt Person), together with all Affiliates
67
and Associates of such Person, becomes the Beneficial Owner of 50% or more of
the Class A Shares then outstanding.
(b) Immediately upon the action of the Board ordering the exchange of
any Rights pursuant to Section 34(a), and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of Units
equal to the number of such Rights held by such holder multiplied by the Section
34(a)(i) Exchange Ratio or Section 34(a)(ii) Exchange Ratio, as the case may be.
The Company shall promptly give public notice of any such exchange (with notice
thereof to the Rights Agent); 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 that is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange shall state the method by which the exchange of Units for Rights
will be effected and, in the event of any partial exchange, the number of Rights
that will be exchanged. Any partial exchange shall be effected pro rata based on
the number of Rights (other than Rights that have become void pursuant to
Section 7(e)) held by each holder of Rights.
(c) In the event that the number of Preferred Shares that are
authorized by the Company's Amended Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit any exchange of Rights as contemplated
in accordance with this Section 34, the Company shall take all such action as
may be necessary to authorize additional Preferred Shares for issuance upon
exchange of the Rights or make adequate provision to substitute (1) cash, (2)
Common Shares or other
68
equity securities of the Company, (3) debt securities of the Company, (4) other
assets or (5) any combination of the foregoing, having an aggregate value equal
to the Adjustment Spread, where such aggregate value has been determined by the
Board.
(d) The Company may, but shall not be required to, issue fractions of
Units (other than fractions which are integral multiples of one-twentieth of a
Right) or to distribute certificates that evidence fractional Units. In lieu of
fractional Units (other than fractions which are integral multiples of
one-twentieth of a Right), the Company may pay to the registered holders of
Right Certificates at the time such Rights are exchanged as herein provided an
amount in cash equal to the same fraction of the current market value of one
Unit. For purposes of this Section 34(d), the current market value of one Unit
shall be the closing price of one Unit (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
69
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
Attest: THE XXXXXXXX AND XXXXXXXX COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------------- ---------------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxxxxx
Title: General Counsel and Secretary Title: President and Chief Executive Officer
Attest: MELLON INVESTOR SERVICES LLC,
as Rights Agent
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
---------------------------------------- ---------------------------------------
Name: Xxxx Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President Title: Assistant Vice President
CERTIFICATE OF AMENDMENT BY DIRECTORS TO
AMENDED ARTICLES OF INCORPORATION
OF
THE XXXXXXXX AND XXXXXXXX COMPANY
Ohio Charter Number: 007639
Pursuant to Section 1701.73 of the Ohio Revised Code
Xxxxx X. Xxxxxx, who is the Chairman of the Board of The
Xxxxxxxx and Xxxxxxxx Company, an Ohio corporation for profit (the
"Corporation"), does hereby certify that the following is a true and complete
copy of the resolution adopting an amendment to the Amended Articles of
Incorporation of the Corporation (the "Amended Articles of Incorporation") duly
adopted by the Board of Directors of the Corporation at its meeting held on the
18th day of April, 2001 pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of Section
1701.70(B)(1) of the Ohio Revised Code and Section 2.a. of Article FOURTH of the
Amended Articles of Incorporation:
RESOLVED, that Article FOURTH of the Amended Articles of
Incorporation of the Corporation be, and it hereby is, amended to add a
new Section 5 providing for a new series of preferred shares of the
Corporation and that the form of such amendment and the express terms
and provisions of the new series of preferred shares are as follows:
Section 5. Terms and Provisions of Series B Participating Preferred Shares.
a. DESIGNATION AND AMOUNT. There shall be established a
series of Preferred Shares which shall be designated as the "Series B
Participating Preferred Shares" and the number of shares constituting such
series shall be 2,000,000.
b. DIVIDENDS AND DISTRIBUTIONS.
(1) Subject to the provisions for adjustment set forth in
this Section 5.b. of this Article FOURTH, the holders of Series B Participating
Preferred Shares shall be entitled to receive, when and if declared by the
Board of Directors out of funds legally available for the purpose, dividends
on each Series B Participating Preferred Share equal to 1,000 (as adjusted from
time to time as provided in subparagraph (2) of this Section 5.b. of this
Article FOURTH, the "Class A Multiple") times the aggregate amount of dividends
or distributions declared (whether or not paid) from time to time per Class A
Common Share (other than to the extent that such dividends and distributions are
payable in Class A Common Shares); provided that, in the event the dividends and
distributions declared on each Series B Participating Preferred Share
outstanding during the period (a "Dividend Period") between any Dividend Payment
Date (as defined below) and the next subsequent Dividend Payment Date (or, in
the case of the first
Dividend Period, the period between the date of issuance of the first Series B
Participating Preferred Share or any fraction thereof and the next subsequent
Dividend Payment Date), do not in the aggregate equal at least $10 per Series B
Participating Preferred Share, then each Series B Participating Preferred Share
shall be entitled to receive, when and if declared by the Board of Directors out
of funds legally available for the purpose, dividends ("Minimum Dividends") on
each Series B Participating Preferred Share equal to the difference between $10
and the amount of any dividends or distributions declared on the Series B
Participating Preferred Shares during such Dividend Period. Minimum Dividends
shall be payable in cash on the Dividend Payment Date ending the applicable
Dividend Period. "Dividend Payment Dates" shall mean the dates determined by the
Board of Directors, which dates shall be no later than the last day of January,
April, June and September in each year.
(2) In the event the corporation shall at any time or from time to time
after May 6, 2001 (the "Rights Declaration Date") (a) declare any dividend or
distribution on the Class A Common Shares payable in Class A Common Shares, (b)
subdivide the outstanding Class A Common Shares, or (c) combine the outstanding
Class A Common Shares into a smaller number of shares, then in each such case
the Class A Multiple shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of Class A Common Shares outstanding
immediately after such event and the denominator of which is the number of Class
A Common Shares outstanding immediately prior to such event.
(3) The corporation shall declare a dividend or distribution on the
Series B Participating Preferred Shares as set forth in subparagraph (1) of this
Section 5.b. of this Article FOURTH prior to or simultaneously with a
declaration of any dividend or distribution on the Class A Common Shares (other
than a dividend or distribution payable in Class A Common Shares) or, in the
case of dividends payable on a Dividend Payment Date, prior to such Dividend
Payment Date.
(4) Dividends shall begin to accrue and be cumulative on each
outstanding Series B Participating Preferred Share from the date of issuance
thereof. Accrued and accumulated but unpaid dividends shall not bear interest.
Dividends paid on the Series B Participating Preferred Shares in an amount less
than the total amount of such dividends at the time accrued, accumulated 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 Series B Participating Preferred
Shares entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 60 days prior to the date fixed
for the payment thereof.
c. VOTING RIGHTS. Subject to the Ohio Code and any amendments to these
Amended Articles of Incorporation by the Board of Directors providing for the
issuance of any series of Preferred Shares (other than the Series B
Participating Preferred Shares), the holders of the Class A Common Shares, Class
B Common Shares and Preferred Shares of all series (including, without
limitation, the Series B Participating Preferred Shares) shall be entitled to
one vote per share and shall vote together as a single class for all corporate
purposes.
d. LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of any
liquidation, dissolution or winding up of the corporation, voluntary or
otherwise, then, before any
2
distribution or payment shall be made to the holders of Common Shares or any
class of stock of the corporation ranking junior to the Series B Participating
Preferred Shares in respect of the liquidation, dissolution or winding up of the
corporation, first (1) the holders of the Series B Participating Preferred
Shares shall be entitled to be paid an amount in dollars equal to (a) the Class
A Multiple per share, plus (b) any accrued, accumulated and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment and
then (2) the holders of the Series B Participating Preferred Shares shall be
entitled to be paid in full an amount per share equal to the Remaining Assets
(as defined below) multiplied by a fraction (a) the numerator of which is 20,000
and (b) the denominator of which is the sum of (i) the number of issued and
outstanding Series B Participating Preferred Shares multiplied by 20,000, (ii)
the number of issued and outstanding Class A Common Shares multiplied by 20 and
(iii) the number of issued and outstanding Class B Common Shares.
"Remaining Assets" shall mean the amount of assets legally
available for payment to shareholders of the corporation upon liquidation,
dissolution or winding up of the corporation, voluntary or otherwise, minus any
payments to holders of Preferred Shares upon liquidation, dissolution or winding
up of the corporation, voluntarily or otherwise to be made pursuant to clause
(1) of the first sentence of this Section 5.d. of this Article FOURTH or
pursuant to any amendments to these Amended Articles of Incorporation made by
the Board of Directors providing for the issuance of any other series of
Preferred Shares.
e. CONSOLIDATION, MERGER, ETC. In case the corporation shall enter into
any consolidation, merger, combination or other transaction in which the Class A
Common Shares are exchanged for or converted into other shares or securities,
cash or any other property, then in any such case each Series B Participating
Preferred Share shall at the same time be similarly exchanged for or converted
into an amount per share equal to the Class A Multiple times the aggregate
amount of shares, securities, cash or any other property (payable in kind), as
the case may be, into which or for which each Class A Common Share is exchanged
or changed; PROVIDED that, the Series B Participating Preferred Shares shall not
be exchanged for or converted into Common Shares and in lieu thereof the holders
of the Series B Preferred Shares will receive cash or other consideration in the
form and amount determined by the Board of Directors to be equivalent to the per
share amount referred to immediately preceding this proviso.
f. NO REDEMPTION. The Series B Participating Preferred Shares shall not
be redeemable.
g. FRACTIONAL SHARES. Series B Participating Preferred Shares 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 have the benefit of all other rights of holders
of Series B Participating Preferred Shares.
3
IN WITNESS WHEREOF, the above-named officer, acting for and on behalf
of the Corporation, has hereunto subscribed his name on this ____ day of April,
2001.
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman of the Board of Directors
4
EXHIBIT B
[Form of Right Certificate]
Certificate No. ______ _____Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT
REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [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 REFERRED TO BELOW). ACCORDINGLY, THIS
RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(E) OF THE RIGHTS AGREEMENT.]*
RIGHT CERTIFICATE
THE XXXXXXXX AND XXXXXXXX COMPANY
This certifies that _____________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Amended and Restated Rights Agreement, dated as of April 18, 2001 (the
"Rights Agreement"; terms defined therein are used herein with the same meaning
unless otherwise defined herein) between The Xxxxxxxx and Xxxxxxxx Company, an
Ohio corporation (the "Company"), and Mellon Investor Services LLC, a New Jersey
limited liability company (successor to Xxxxx Fargo Bank Minnesota, N.A., a
national banking association), as Rights Agent (which term shall include any
successor Rights Agent under the Rights Agreement), to purchase from the Company
at any time after the Distribution Date and prior to the Expiration Date at the
office of the Rights Agent, one one-thousandth of a fully paid and
non-assessable share of Series B Preferred Shares, no par value per share (the
"Preferred Shares"), of the Company at the Purchase Price initially of $___ per
one one-thousandth share (each such one one-thousandth of a share being a
"Unit") of Preferred Shares, upon presentation and surrender of this Right
Certificate with the Election to Purchase and related certificate duly executed.
The number of Rights evidenced by this Right Certificate (and the number of
Units which may be purchased upon exercise thereof) set forth above, and the
-----------------------
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
Purchase Price per Unit set forth above shall be subject to adjustment in
certain events as provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event or Section 13
Event, if the Rights evidenced by this Right Certificate are beneficially owned
by an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
or, under certain circumstances described in the Rights Agreement, a transferee
of any such Acquiring Person, Associate or Affiliate, 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 such Section 11(a)(ii) Event or Section
13 Event.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
purchase capital stock of an entity other than the Company or receive common
stock, cash or other assets, all as provided in the Rights Agreement.
This Right Certificate is subject to all of the terms and
conditions of the Rights Agreement, which terms and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available from the Company upon written request.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Right Certificate or
Right Certificates surrendered. If this Right Certificate shall be exercised in
part, the registered 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 under certain
circumstances at its option at a redemption price of $0.01 per Right, payable at
the Company's option in cash or in common stock of the Company, subject to
adjustment in certain events as provided in the Rights Agreement.
No fractional Preferred Shares are required to be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-twentieth of a Unit which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment may be made, as provided in the Rights Agreement. The Company has
reserved the right to require prior to the occurrence of a Section 11(a)(ii)
Event or a Section 13 Event that Rights be
exercised so that only whole Preferred Shares are issued. Other than those
provisions relating to the Redemption Price or the number of Units for which a
Right is exercisable, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company in any respect whatsoever up
until the Distribution Date, and thereafter in certain respects which do not
adversely affect the interests of holders of Right Certificates (other than an
Acquiring Person or its Affiliates or Associates).
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
Preferred Shares or of any other securities which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this 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 ____________ ___, 20__.
ATTEST: THE XXXXXXXX AND XXXXXXXX COMPANY
By: By:
------------------------------ ---------------------------------
Name: Name:
Title: Title:
MELLON INVESTOR SERVICES LLC,
as Rights Agent
By:
------------------------------
Name:
Title:
[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 Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _________ ___, 20__
-----------------------------------
Signature
Signature Medallion 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); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] 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: _________ ___, 20__
--------------------------------
Signature
Signature Medallion Guaranteed:
--------------------------------------------------------------
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.
In the event the certification set forth above is not
completed, the Company will deem the beneficial owner of the Rights evidenced by
this Right Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an Assignment,
will affix a legend to that effect on any Right Certificates issued in exchange
for this Right Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Right Certificate.)
To: THE XXXXXXXX AND XXXXXXXX COMPANY
The undersigned hereby irrevocably elects to exercise
______________ Rights represented by this Right Certificate to purchase the
Units issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person or other property which may be issuable upon the
exercise of the Rights) and requests that certificates for such Units be issued
in the name of and delivered to:
-----------------------------------------
(Please print name and address)
-----------------------------------------
Please insert social security
or other identifying number:
--------------------------------
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 print name and address)
-------------------------------------------
Please insert social security
or other identifying number: _______________
Dated: _________ ___, 200__
--------------------------------------
Signature
Signature Medallion Guaranteed:
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not beneficially owned by an Acquiring Person or an Affiliate or an
Associate of any such Acquiring Person (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] 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: _________ ___, 20__
--------------------------------
Signature
Signature Medallion Guaranteed:
--------------------------------------------------------------
NOTICE
------
The signature in the foregoing Election to Purchase and
Certificate must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above is not
completed, the Company will deem the beneficial owner of the Rights evidenced by
this Right Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an Assignment,
will affix a legend to that effect on any Right Certificates issued in exchange
for this Right Certificate.
EXHIBIT C
THE XXXXXXXX AND XXXXXXXX COMPANY
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
----------------------------------------------
On April 18, 2001, the Board of Directors of The Xxxxxxxx and
Xxxxxxxx Company (the "Company") declared a dividend distribution of one right
(a "Right") for each outstanding Class A Common Share, no par value per share,
of the Company (the "Class A Shares") and 1/20th of a Right for each Class B
Common Share, no par value per share, of the Company (the "Class B Shares", and
together with the Class A Shares, the "Common Shares"). The Rights will issue at
5:00 P.M. Dayton, Ohio time on May 6, 2001 (the "Record Date") to shareholders
of record on that date. The following is a summary of the terms of the Rights.
Each Right entitles the registered holder thereof to purchase
from the Company a unit (a "Unit") consisting of one one-thousandth of a share
of the Company's Series B Participating Preferred Shares, no par value per share
(the "Series B Preferred Shares"), at a price of $105.00, subject to adjustment
under certain circumstances (the "Purchase Price"). The terms of the Rights are
set forth in an Amended and Restated Rights Agreement, dated as of April 18,
2001 (the "Rights Agreement"), between the Company and Mellon Investor Services
LLC, a New Jersey limited liability company (successor to Xxxxx Fargo Bank
Minnesota, N.A., a national banking association), as rights agent (the "Rights
Agent").
AS DISCUSSED BELOW, INITIALLY THE RIGHTS ARE NOT EXERCISABLE,
CERTIFICATES FOR THE RIGHTS WILL NOT BE SENT TO SHAREHOLDERS AND THE RIGHTS WILL
AUTOMATICALLY TRADE WITH THE COMMON SHARES.
Until the Distribution Date (as described below) or earlier
redemption or expiration of the Rights, the Rights will be evidenced by the
certificates for Common Shares together with this Summary of Rights, and the
registered holders of Common Shares shall also be the registered holders of the
associated Rights. The Rights Agreement provides that, until the Distribution
Date or earlier redemption or expiration of the Rights, the Rights will be
transferred with and only with the Common Shares. Until the Distribution Date or
earlier redemption or expiration of the Rights, Common Share certificates
delivered after the Record Date upon transfer, sale from the Company's treasury
or new issuance of the Common Shares will contain a legend incorporating the
Rights Agreement by reference, and the surrender or transfer of any of the
Common Share certificates, with or without the aforesaid legend or a copy of the
Summary of Rights attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate. As
promptly as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date, and
such separate certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights will become exercisable after the "Distribution
Date" which shall occur on the earlier of the close of business on (i) the tenth
business day after a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person"), other than the Company, any
subsidiary of the Company, or any employee benefit plan or employee stock plan
of the Company or of any subsidiary of the Company or any entity organized
appointed, established or holding Common Shares by, for or pursuant to, the
terms of any such plan (an "Exempt Person"), has acquired beneficial ownership
of 15% or more (20% or more for any person or group of affiliated persons that
satisfies both of the criteria set forth in Rule 13d-1(b)(1)(i) and Rule
13d-1(b)(1)(ii) of the General Rules and Regulations under the Securities
Exchange Act of 1934, and who has reported such ownership on Schedule 13G) of
the outstanding number of Class A Shares of the Company, or (ii) the tenth
business day or, if determined by the Board of Directors a specified or
unspecified later date, following the commencement of a tender or exchange offer
(other than a tender or exchange offer by an Exempt Person) which, if
successful, would result in a person (together with its affiliates and
associates) becoming an Acquiring Person, even if no purchases actually occur
pursuant to the offer.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on the close of business on May 6, 2011 (the "Expiration
Date"), unless the Rights earlier are redeemed by the Company as described below
or expire in accordance with the terms of Section 13(d) of the Rights Agreement.
The Series B Preferred Shares will be nonredeemable and will
be of equal rank in respect of the preference as to dividends and to payments
upon the liquidation, dissolution or winding up of the Company with all other
classes or series of the Company's preferred shares. Subject to antidulution
adjustments, each Series B Preferred Share will be entitled to receive, when and
if declared, dividends for each Series B Preferred Share equal to 1,000 times
the aggregate dividends or distributions declared (whether or not paid) from
time to time per Class A Share (other than to the extent that such dividends or
distributions are payable in Class A Shares); provided that, in the event that
during specified periods dividends declared on the Series B Preferred Shares do
not in the aggregate equal $10 per Series B Preferred Share per dividend period,
then each Series B Preferred Share will be entitled to receive, in cash, the
difference between $10 and the per share dividend declared on the Series B
Preferred Shares during such specified periods.
In the event of any liquidation, dissolution or winding up of
the corporation, voluntary or otherwise, then, before any distribution or
payment is made to the holders of Class A Shares, Class B Shares or any class of
stock of the corporation ranking junior to the Series B Preferred Shares in
respect to the liquidation, dissolution or winding up of the corporation, first
(i) the holders of the Series B Preferred Shares would be entitled to be paid in
full the sum of (A) $1,000 per share, plus (B) an amount equal to any accrued
and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment and then (ii) the holders of the Series B Preferred Shares
would be entitled to proportionately share in the remaining assets of the
Company with the holders of Class A Shares and Class B Shares. Each Series B
Preferred Share will have one vote, voting together with the Common Shares. In
the event of any merger, consolidation or other transaction in which Class A
Shares are changed or
2
converted, each Series B Preferred Share will be entitled to receive an amount
equal to 1,000 (subject to adjustment) times the amount received per Class A
Share.
The number of Series B Preferred Shares or the amount of other
securities or property issuable upon exercise of the Rights is subject to
adjustment from time to time to prevent dilution in the event of a stock
dividend on, or subdivision, combination or reclassification of the Class A
Shares, Class B Shares or Series B Preferred Shares. The Purchase Price is
subject to adjustment in the event of, among other things, the issuance of
certain rights, options or warrants or extraordinary distributions of cash or
other property to holders of the Series B Preferred Shares.
In the event that a person or group becomes an Acquiring
Person, except pursuant to a tender or exchange offer for all outstanding Class
A Shares determined by the Board of Directors to be at a fair price and
otherwise in the best interests of the Company and its shareholders (a "Flip-in
Event"), each holder of a Right (other than the Acquiring Person) will
thereafter be entitled to receive, upon payment of the Purchase Price, that
number of the Series B Preferred Shares (or, in certain circumstances, cash, a
reduction in the Purchase Price, Class A Shares, Class B Shares, other equity or
debt securities of the Company, other assets or any combination thereof) having
a market value (as determined in the manner set forth in the Rights Agreement)
of two times the Purchase Price.
Any Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by an Acquiring Person will be
null and void. Rights are not exercisable following the occurrence of a Flip-in
Event until such time as the Rights are no longer redeemable by the Company as
set forth below.
Unless the Rights are earlier redeemed, in the event that on
or after the date a person or group becomes an Acquiring Person (1) the Company
is acquired in a merger or other business combination transaction (in which any
Class A Shares are changed into or exchanged for other securities or property)
or (2) more than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) are sold or transferred in one transaction or a
series of related transactions (collectively, a "Flip-Over Event"), proper
provision will be made so that each holder of Rights will be entitled to
receive, upon payment of the Purchase Price, that number of common shares (or,
under certain circumstances, an economically equivalent security or securities)
of the surviving, resulting or acquiring company which at the time of such
transaction has a market value (as determined the manner set forth in the Rights
Agreement) of two times the Purchase Price.
The Purchase Price payable upon exercise of the Rights, and
the number of Series B Preferred Shares or other securities or property issuable
upon exercise, are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series B Preferred Shares, (ii) upon the grant to
holders of the Series B Preferred Shares of certain rights, options, or warrants
to subscribe for Series B Preferred Shares or convertible securities at less
than the current market price of the Series B Preferred Shares, or (iii) upon
the distribution to holders of the Series B Preferred Shares of evidences of
indebtedness or cash, assets, stock (other than dividends payable in Series B
Preferred Shares) or of subscription rights or warrants (other than those
referred to above).
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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. No fractional Series B Preferred Shares (other than
integral multiples of one-twentieth of a Unit which may, upon the election of
the Company, be evidenced by depositary receipts) are required to be issued by
the Company and, in lieu of any fractional shares, an adjustment in cash may be
made.
At any time on or prior to the close of business on the tenth
day after the public announcement that a person or group has become an Acquiring
Person, the Board of Directors may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (the "Redemption Price"). The Redemption Price may
be paid in cash, Class A Shares or any other form of consideration deemed
appropriate by the Board of Directors. The redemption period may be extended by
the Company at any time prior to the expiration of such period. Immediately upon
the action of the Board of Directors authorizing redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
At any time after a person or group of affiliated persons
becomes an Acquiring Person and until any person or group of affiliated persons
beneficially owns 50% or more of the then-outstanding Class A Shares, the Board
of Directors may exchange all or part of the then-outstanding Rights for Units
(1) on a one-to-one basis or (2) at an exchange ratio equal to (A) the
difference between the aggregate market price of the number of Units to be
received on a Flip-in Event and the Purchase Price, divided by (B) the market
price per Unit upon a Flip-in Event. In such event, the right to exercise the
Rights terminates and the only right thereafter of a holder of such Rights shall
be to receive that number of Units equal to the number of such Rights held by
such holder multiplied by the applicable exchange ratio.
Other than those provisions relating to the amount of the
Redemption Price or the number of Units for which a Right is exercisable any of
the provisions of the Rights Agreement may be amended by the Board of Directors
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board of Directors in order to cure
any ambiguity, to make changes which do not adversely affect the interests of
holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement, subject to certain limitations. In any event, no amendment to
lengthen the time period for redemption may be made at such time as the Rights
are not redeemable.
Upon becoming exercisable, Rights may be exercised by
completing and signing the Election to Purchase and the accompanying certificate
on the reverse side of the Right Certificate and surrendering such Right
Certificate, together with cash or a certified check or bank draft in the
aggregate amount of the Purchase Price and any applicable transfer tax or
charge, to the Rights Agent. Until a Right is exercised, the holder thereof, by
reason of ownership of a Right, will have no rights as a shareholder of the
Company, including, without limitation, the right to vote or to receive
dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on Form 8-K
dated April 18, 2001. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of
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the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.
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