THE XXXXXX GROUP, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
Rights Agreement
Dated as of October 18, 1996
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 5
Section 3. Issue of Right Certificates 6
Section 4. Form of Right Certificates 8
Section 5. Countersignature and Registration 8
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates 9
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights; Nullification of Rights 11
Section 8. Cancellation and Destruction of Rights Certificates 14
Section 9. Reservation and Availability of Common Shares 14
Section 10. Common Shares Record Date 16
Section 11. Adjustment of Purchase Price,
Number of Shares or Number of Rights 16
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares 29
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 29
Section 14. Fractional Rights and Fractional Shares 35
Section 15. Rights of Action 36
Section 16. Agreement of Right Holders 37
Section 17. Right Certificate Holder Not Deemed a Stockholder 37
Section 18. Concerning the Rights Agent 38
Section 19. Merger or Consolidation or Change of
Name of Rights Agent 38
Section 20. Duties of Rights Agent 39
Section 21. Change of Rights Agent 42
Section 22. Issuance of New Right Certificates 44
Section 23. Redemption 44
Section 24. Notice of Certain Events 45
Section 25. Notices 46
Section 26. Supplements and Amendments 47
Section 27. Exchange 48
Section 28. Successors. 50
Section 29. Determinations and Actions by the Board
of Directors, etc. 50
Section 30. Benefits of this Agreement 51
Section 31. Severability 51
Section 32. Governing Law 51
Section 33. Counterparts 51
Section 34. Descriptive Headings 52
Exhibit A -- Form of Right Certificate
Exhibit B -- Summary of Rights to Purchase Common Shares
RIGHTS AGREEMENT
This Agreement, dated as of October 18, 1996, to be immediately
effective as of the Effective Date (as hereinafter defined), between The
Xxxxxx Group, Inc., a Maryland corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., a limited liability company (the "Rights
Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one common share purchase right (a "Right") for each
share of Common Stock, par value $1.00 per share, of the Company ("Common
Share") outstanding at the close of business on the Effective Date (as
hereinafter defined), each Right represents the right to purchase one share of
Common Stock, par value $1.00 per share, of the Company upon the terms and
subject to the conditions herein set forth, and has further authorized the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Effective Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
defined in Sections 3 and 7 hereof).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 20% or more of the
Common Shares then outstanding, but shall not include (i) the Company, any
Subsidiary of the Company or any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person organized, appointed or
established by the Company for or pursuant to the terms of any such plan or
(ii) any Person who has become such a Beneficial Owner solely because (A) of a
reduction in the number of Common Shares outstanding or (B) it acquired such
Beneficial Ownership in the good faith belief that such acquisition would not
(x) cause such Beneficial Ownership to exceed 20% of the Common Shares then
outstanding and such Person relied in good faith in computing the percentage
of its Beneficial Ownership on publicly filed reports or documents of the
Company which are inaccurate or out-of-date or (y) otherwise cause a
Distribution Date or the adjustment provided for in Section 11(a)(ii) to
occur. Notwithstanding clause (ii) of the prior sentence, if any Person that
is not an Acquiring Person due to such clause (ii) does not reduce its
percentage of Beneficial Ownership of Common Shares to less than 20% by the
Close of Business on the fifth Business Day after notice from the Company (the
date of notice being the first day) that such Person's Beneficial Ownership of
Common Shares so exceeds 20% such Person shall, at the end of such five
Business Day period, become an Acquiring Person (and such clause (ii) shall no
longer apply to such Person). For purposes of this definition, the
determination whether any Person acted in "good faith" shall be conclusively
determined by the Board of Directors of the Company, acting by a vote of those
directors of the Company whose approval would be required to redeem the Rights
under Section 23.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to beneficially own, within the meaning of Rule 13d-3 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise, provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until such tendered securities
are accepted for purchase; or (B) the right to vote, alone or in concert with
others, 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 security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations of the Exchange Act and (2) is not reportable by such Person
on a Schedule 13D report under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing), for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy or consent as described in clause (B) of subparagraph (ii) of
this paragraph (c)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, (A) the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder and (B) a Person engaged in
business as an underwriter of securities shall not be considered 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.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the States of New York or
Maryland are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Baltimore time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Baltimore time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean shares of Common Stock, par value $1.00 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock (or, in the case of any unincorporated entity,
the equivalent equity interest) with the greatest voting power of such Person
or, if such Person is a Subsidiary of another Person, the Person or Persons
which ultimately control such first-mentioned Person.
(g) "Disinterested Director" shall mean any member of the Board of
Directors of the Company, while such Person is a member of the Board, who is
not (i) an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative of an Acquiring Person or of any such Affiliate or
Associate, or (ii) a Person or an Affiliate, Associate, or representative of a
Person, any of whom has stated an intent to take, or to consider taking, any
action which would result in such Person becoming an Acquiring Person, or
which would cause a Triggering Event.
(h) "Distribution Date" shall have the meaning set forth in Section
3 hereof.
(i) "Effective Date" shall mean the date that is the earliest of
the Redemption Date and the Final Expiration Date under, and as such terms are
defined in, the Rights Agreement dated as of December 17, 1986, as amended,
between the Company and ChaseMellon Shareholder Services, L.L.C.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, association, trust, unincorporated
organization or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(l) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(m) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(n) "Share Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become
such.
(o) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by such Person.
(p) "Triggering Event" shall mean any action which would cause the
occurrence of any event described in Section 11(a)(ii) or Section 13 hereof.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such Co-Rights Agents).
In the event the Company appoints one or more Co-Rights Agents, the respective
duties of the Rights Agent and any Co-Rights Agents shall be as the Company
shall determine.
Section 3. Issue of Right Certificates. (a) Until the earlier of
(i) the tenth Business Day after the Shares Acquisition Date or (ii) the tenth
business day (or such later date as may be determined by action of the Board
of Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement of, or first public announcement of the
intention of any Person to commence, a tender or exchange offer the
consummation of which would result in beneficial ownership by a Person,
together with its Affiliates and Associates, (other than the Company, any
Subsidiary of the Company or any employee benefit plan of the Company or of
any Subsidiary of the Company or any Person holding Common Shares for or
pursuant to the terms of any such plan) of 20% or more of the Common Shares
then outstanding (including any such date that is after the date of this
Agreement and prior to the issuance of the Rights; the earlier of the dates in
subsections (i) and (ii) hereof 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 Common Shares
registered in the names of the holders of the Common Shares (which
certificates for the Common Shares shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Shares. As soon as practicable after the Distribution
Date, the Rights Agent will send, by first-class, insured, postage prepaid
mail, to each record holder of Common Shares as of the close of business on
the Distribution Date, at the address of such holder shown on the records of
the Company, a Right Certificate, in substantially the form of Exhibit A
hereto, evidencing one Right for each Common Share so held. As of the
Distribution Date, the Rights will be evidenced solely by the Right
Certificates.
(b) On the Effective Date or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Common Shares, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of Common Shares
as of the Close of Business on the Effective Date, at the address of the
record holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the Effective Date, until the
Distribution Date, the Rights will be evidenced by the certificates for Common
Shares registered in the names of the holders thereof (together with a copy of
the Summary of Rights). Until the Distribution Date (or the earlier of the
Redemption Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Effective Date, with or
without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(c) Certificates for Common Shares issued after the Effective Date
but prior to the earliest of the Distribution Date, the Redemption Date and
the Final 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 a Rights Agreement between The Xxxxxx Group, Inc. and
ChaseMellon Shareholder Services, L.L.C., dated as of October __, 1996, as
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 Xxxxxx Group, Inc.. Under certain
circumstances, as set forth in the Rights Agreement, the Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Xxxxxx Group, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request therefor.
Rights owned by or transferred to any person who becomes an Acquiring Person
or their Affiliates or Associates (as such terms are defined in the Rights
Agreement) and certain transferees thereof will become null and void and will
no longer be transferable.
With respect to the certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. In the event that the Company purchases or otherwise acquires
any Common Shares after the Effective Date but prior to the Distribution Date,
any Rights associated with such Common Shares shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not affect
the enforceability of any part of this Agreement or the rights of any holder
of the Rights.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Common Shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as Exhibit A hereto and
may have such marks of identification or designation and legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or automated
quotation system on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11 and 22 hereof, the
Right Certificates, shall entitle the holders thereof to purchase the number
of Common Shares as shall be set forth therein at the price per share set
forth therein (the "Purchase Price"), but the number of the Common Shares and
the Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
President or any Vice President, either manually or by facsimile signature,
and shall have affixed thereto the Company's seal or a facsimile thereof which
shall be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. Each Right Certificate shall be
manually countersigned by an authorized signatory of the Rights Agent, but it
shall not be necessary for the same signatory to countersign all of the Right
Certificates issued hereunder. No Right Certificate shall be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any Right Certificate shall cease to be an officer of the Company
before countersignature by the Rights Agent and issuance and delivery of the
certificate by the Company, such Right Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificate had not ceased to be an officer of the Company. Any Right
Certificate may be signed on behalf of the Company by any person who, on the
date of the execution of the Right Certificate, shall be a proper officer of
the Company to sign the Right Certificate, although at the date of the
execution of this Rights Agreement that person was not an officer.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date
and certificate number of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Certificates (other than Right Certificates representing Rights
that have become void pursuant to Section 11(a)(ii) hereof or that have been
exchanged pursuant to Section 27 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Certificates, entitling
the registered holder to purchase a like number of Common Shares as the Right
Certificate or Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Certificates shall make a request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate or Certificates to
be transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any surrendered Right Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of the Right Certificate and shall have
provided 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 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 Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, at the request of the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
a Right Certificate if mutilated, 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.
Notwithstanding any other provision hereof, the Company and the Rights
Agent may amend this Rights Agreement to provide for uncertificated Rights in
addition to or in place of Rights evidenced by Right Certificates.
Section 7.
Exercise of Rights; Purchase Price; Expiration Date of Rights; Nullification
of Rights. (a) Subject to Section 11(a)(ii) hereof, the registered
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after
the Distribution Date upon surrender of the Right Certificate, with the form
of election to purchase on the reverse side thereof duly executed (with
signatures duly guaranteed), to the Rights Agent at the principal office of
the Rights Agent in Baltimore, Maryland, designated for such purpose, together
with payment of the Purchase Price for each Common Share as to which the
Rights are exercised, at or prior to the earliest of (i) the Close of Business
on the tenth (10th) anniversary of the Effective Date (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 27 hereof.
(b) The Purchase Price for each Common Share pursuant to the
exercise of a Right shall initially be $70. The Purchase Price and the number
of Common Shares to be acquired upon exercise of a Right shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof. The
Purchase Price shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase set forth on the reverse thereof
duly executed, accompanied by payment of the Purchase Price for the Common
Shares to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance with
Section 9 hereof in cash, or by certified check or bank draft payable to the
order of the Company and, if requested by the Company or the Rights Agent
after the occurrence of any of the events described in subparagraphs (A), (B),
or (C) of Section 11(a)(ii) hereof (which request may be made before or after
notice of exercise of the Rights shall have been given), a representation and
warranty, in a form that the Company or the Rights Agent may reasonably
request, by the holder of Rights to be exercised that the holder is not an
Acquiring Person or an Affiliate or Associate of an Acquiring Person and that
the Rights were not acquired, directly or indirectly, from an Acquiring
Person, the Rights Agent shall thereupon promptly (i) requisition from any
transfer agent of the Common Shares one or more certificates representing the
number of Common Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional interests in shares in accordance with Section
14 hereof, (iii) promptly after receipt of such certificates, cause the same
to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by the
holder and (iv) when appropriate, after receipt thereof, promptly deliver such
cash, if any, to or upon the order of the registered holder of the Right
Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to the provisions
of Section 14 hereof.
(e) In the event that the Company is obligated to issue other
securities (including Common Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if and when
appropriate.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 or the transfer of any
surrendered Right Certificates under Section 6, unless and until such
registered holder shall have (i) completed and signed (A) in the case of a
Section 7 exercise, a form of election or (B) in the case of a Section 6
transfer, a form of assignment, as set forth on the reverse side of the Right
Certificate, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
(g) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of an event described in Section
11(a)(ii), any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes 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 the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(g), 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 use all
reasonable efforts to insure that the provisions of this Section 7(g) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. No Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or Affiliate
thereof; no Right Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person whose rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person (or any
Associate, Affiliate or nominee thereof) whose Rights would be void pursuant
to the preceding sentence shall be canceled.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all canceled Right Certificates to the Company, or
shall, at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Common Shares. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Common Shares or any authorized
and issued Common Shares held in its treasury, the number of Common Shares
that will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the Common Shares issuable upon the exercise of
Rights may be listed on any national securities exchange or automated
quotation system, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange or automated quotation system upon
official notice of issuance upon such exercise.
(c) If necessary to permit the issuance of Common Shares pursuant
to the Rights, the Company shall use its best efforts from and after such time
as the Rights become exercisable to register such Common Shares under the
Securities Act, and any applicable state securities laws, cause such
registration statement to become effective as soon as possible after such
filing and keep such registration effective until the earlier of the
expiration date of the Rights or the date as of which the Rights are no longer
exercisable. The Company may temporarily suspend, for a period of time not to
exceed 90 days, the exercisability of the Rights in order to prepare and file
a registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have been obtained and until a registration statement under the Securities Act
(if required) shall have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
Common Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges that
may be payable in respect of the issuance or delivery of the Right
Certificates or of any Common Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax that may be payable in
respect of any transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates for the Common Shares in a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for Common Shares upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been established
to the Company's satisfaction that no such tax is due.
Section 10. Common Shares Record Date. Each person in whose name any
certificate for Common Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Common
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes) was
made; provided, however, that if the date of such surrender and payment is a
date upon which the Common Shares transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such shares
on, and the certificate shall be dated, the next succeeding Business Day on
which the Common Shares transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Common Shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. The Purchase Price, the number of Common Shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Common Shares payable in
Common Shares, (B) subdivide or split the outstanding Common Shares into a
greater number of Common Shares, (C) combine the outstanding Common Shares
into a smaller number of Common Shares or (D) issue any shares of its capital
stock in a reclassification of the Common Shares (including any
reclassification in connection with a consolidation, merger or statutory share
exchange in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, split, combination or reclassification, and the
number and kind of Common Shares issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of Common
Shares which, if such Right had been exercised immediately prior to such date
and at a time when the Common Shares transfer books of the Company were open,
the holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, split, combination or reclassification;
provided, however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of one Right. If an
event occurs which would require an adjustment under both 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 that:
(A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement, directly or
indirectly, (1) shall consolidate with or merge with and into the Company or
any of its Subsidiaries or otherwise combine with the Company or any of its
Subsidiaries and the Company or such Subsidiary shall be the continuing or
surviving corporation of such consolidation, merger or combination and the
Common Shares of the Company shall remain outstanding and no shares thereof
shall be changed into or exchanged for stock or other securities of any other
Person or the Company or cash or any other property, (2) shall, in one or more
transactions, other than in connection with the exchange or conversion of
securities exchangeable for or convertible into securities of the Company or
any of its Subsidiaries, transfer any assets or property to the Company or any
of its Subsidiaries in exchange (in whole or in part) for shares of any class
of capital stock of the Company or any of its Subsidiaries or for securities
exchangeable for or convertible into shares of any class of capital stock of
the Company or any of its Subsidiaries or otherwise obtain from the Company or
any of its Subsidiaries, with or without consideration, any additional shares
of any class of capital stock of the Company or any of its Subsidiaries or any
securities exchangeable for or convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries (other than as part of a pro
rata offer or distribution by the Company or any of its Subsidiaries to all
holders of any class of capital stock), (3) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise dispose (in one or more
transactions), to, from, with or of, as the case may be, the Company or any of
its Subsidiaries, assets, including securities, on terms and conditions less
favorable to the Company or any of its Subsidiaries than the Company or any of
its Subsidiaries would be able to obtain in arm's-length negotiation with an
unaffiliated third party, (4) shall receive any compensation from the Company
or any of the Subsidiaries other than compensation for full-time employment as
a regular employee at rates in accordance with the Company's or any of its
Subsidiaries' past practices, or (5) shall receive the benefit, directly or
indirectly (except proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or other
tax advantage provided by the Company or any of its Subsidiaries; or
(B) any Person (other than the Company, any wholly-owned
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary, or any Person holding Common Shares for or pursuant to the terms
of any such plan), alone or together with its Affiliates and Associates,
shall, at any time, become the Beneficial Owner of 20% or more of the Common
Shares then outstanding, unless the event causing the 20% threshold to be
crossed is a transaction set forth in Section 13 hereof, or is an acquisition
of Common Shares pursuant to a tender offer or an exchange offer for all
outstanding Common Shares at a price and on terms determined by at least a
majority of the members of the Board of Directors who are not officers of the
Company and who are not representatives, nominees, Affiliates or Associates of
an Acquiring Person, after receiving advice from one or more investment
banking firms, to be (a) at a price which is fair to stockholders (taking into
account all factors which such members of the Board deem 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 Company and its stockholders;
or
(C) during such time as there is an Acquiring Person, there shall
be any reclassification of securities (including any reverse stock split), or
recapitalization of the Company, or any merger, statutory share exchange or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any Subsidiary
of the Company (whether or not with or into or otherwise involving an
Acquiring Person) which has the effect, directly or indirectly, of increasing
by more than 1% the proportionate share of the outstanding shares of any class
of equity securities of the Company or any of its Subsidiaries or of
securities exercisable for or convertible into equity securities of the
Company or any of its Subsidiaries that is directly or indirectly owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring Person;
then, on the first occurrence of any event referred to in the foregoing
subparagraphs (A), (B) or (C) of this Section 11(a)(ii), proper provision
shall be made so that each holder of a Right, except as provided below, shall
thereafter have a right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such number of
Common Shares of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of Common Shares for
which a Right is then exercisable and dividing that product by (y) 50% of the
current per share market price of the Common Shares of the Company (determined
pursuant to Section 11(d)) on the date of the occurrence of any one of the
events listed above in this subparagraph (ii); provided, however, that if the
transaction that would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii). Notwithstanding the foregoing, upon the occurrence of any
of the events listed above in this subparagraph (ii), any Rights that are or
were beneficially owned on or after the earlier of the Distribution Date or
the Shares Acquisition Date by an Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall become null and void in accordance
with the provisions of Section 7(g) of this Agreement and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement.
(iii) The Company covenants and agrees not to enter into any
transaction of the kind listed in this Section 11(a) if at the time of such
transaction (x) there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights, or (y) it has
insufficient authorized and unissued Common Shares to provide for the
adjustment required pursuant to the foregoing subparagraph (ii).
(iv) Any Right Certificate issued pursuant to Section 3 or Section 22
hereof that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Right Certificate issued at any time
upon the transfer of any Rights to an Acquiring Person or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate, and any Right Certificate issued pursuant to Section 6 hereof or
this Section 11 upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall contain the
following legend:
The Rights represented by this Right Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). This Right Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section 11(a)(ii) of
the Rights Agreement.
(v) In the event that, despite the covenant in the foregoing
subparagraph (iii), an event specified in this Section 11(a)(ii) occurs and
there shall not be sufficient treasury shares or authorized but unissued
Common Shares to permit the exercise in full of the Rights in accordance with
this Section 11(a)(ii), the Company covenants to us its best efforts to carry
out all such action as may be necessary to authorize additional Common Shares
for issuance upon exercise of the Rights; provided, however, if the Company is
unable to cause the authorization of additional Common Shares sufficient for
issuance upon exercise of the Rights within forty-five (45) days from the date
the adjustment was required, the Company shall: (A) determine the excess of
(1) the value of the Common Shares (the "Exercise Shares") issuable upon the
exercise of a Right (the "Current Value") over (2) the then current Purchase
Price (such excess, the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Exercise Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) Common Shares or other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock which the
Board of Directors of the Company has deemed to have the same value as Common
Shares of the Company (such shares of preferred stock being "common share
equivalents")), (4) debt securities of the Company, (5) other assets, or (6)
any combination of the foregoing, having an aggregate value equal to the
Current Value, where such aggregate value has been determined by the Board of
Directors of the Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the Company;
provided, however, if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within ninety (90) days following
the first occurrence of a Section 11(a)(ii) event, then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares (to the extent
available) and then, if necessary, cash, securities and/or assets which in the
aggregate are equal to the Spread. To the extent that the Company determines
that some action need be taken pursuant to this subparagraph (v), the Company
(x) shall provide, subject to the last sentence of subparagraph (ii) of this
Section 11(a), that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights for such time as
may be reasonably necessary in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made
pursuant hereto and to determine the value thereof.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Shares or securities convertible into Common
Shares at a price per Common Share (or having a conversion price per Common
Share, if a security convertible into Common Shares) less than the current per
share market price of the Common Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of
Common Shares outstanding on such record date plus the number of Common Shares
which the aggregate offering price of the total number of Common Shares so to
be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and
the denominator of which shall be the number of Common Shares outstanding on
such record date plus the number of additional Common Shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be
paid in a consideration part or all of which may be in a form other than cash,
the value of such consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Common Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per share market price of the Common
Shares (as defined in Section 11(d)) on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness to be
distributed or of the subscription rights or warrants applicable to one Common
Share and the denominator of which shall be the current per share market price
of the Common Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution
is not made, the Purchase Price shall again be adjusted to be the Purchase
Price that would be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purposes of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share market price
of such Security is determined during a period following the announcement by
the issuer of the Security of (1) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares,
or (2) any subdivision, combination or reclassification of such Security, and
prior to the expiration of 30 consecutive Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
"current per share market price" shall be appropriately adjusted to reflect
the current market price per share equivalent of such Security. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the 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 Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted sale price or, if
not so quoted, the average of the closing bid and asked prices in the over-
the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or any other system then
in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Security selected by the
Board of Directors of the Company. If on any such date no market maker is
making a market in a Security, the closing price of such Security shall be
deemed to be the fair value of such Security as determined in good faith by
the Board of Directors of the Company. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of business or,
if the Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least l% in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth
of a Common Share. 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 that requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Common Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Common Shares contained in Section 11(a), 11(b), 11(c) and 11(i), and the
provisions of Sections 7, 9, 10 and 13 with respect to the Common Shares shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of Common Shares (calculated to the nearest ten-thousandth of a
Common Share) obtained by (i) multiplying (x) the number of Common Shares
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price,
and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Common Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of, and
shall 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 10 days later than the date
of the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which the
holders shall be entitled as a result of the adjustment, or, at the option of
the Company, shall cause to be distributed to the holders of record in
substitution and replacement for the Right Certificates held by the 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 the
holders shall be entitled after such adjustment. Right Certificates to be
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 Common Shares issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of shares which were expressed in
the initial Right Certificates issued hereunder but they shall be deemed to
represent the Purchase Price and number of Common Shares as adjusted from time
to time hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the Common
Shares issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Common Shares at the adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Common Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Common Shares and other
capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to the adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring the adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Common Shares, (ii)
issuance wholly for cash of any of the Common Shares at less than the current
market price, (iii) issuance wholly for cash of Common Shares or securities
which by their terms are convertible into or exchangeable for Common Shares,
(iv) stock dividends or (v) issuance of rights, options or warrants referred
to in this Section 11, hereafter made by the Company to holders of its Common
Shares shall not be taxable to such shareholders.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth the adjustment,
and a brief statement of the facts accounting for the adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares
a copy of the certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power. (a) In the event that following the Distribution
Date, directly or indirectly, (w) the Company shall consolidate with, or merge
with and into, any other Person, (x) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Common 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, (y) the Company shall engage in any
statutory share exchange whereby the Company's Common Shares are converted
into stock, securities, cash or any other property of any other Person or (z)
the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person
other than the Company or any of its wholly owned Subsidiaries, then, on the
first occurrence of any such event, proper provision shall be made so that (i)
each holder of a Right, other than Rights that have become void pursuant to
Section 11(a)(ii) hereof, shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly issued,
fully paid, nonassessable and freely tradable Common Shares of the Principal
Party (as hereinafter defined), not subject to any rights of call or first
refusal, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of Common Shares for which a Right is
then exercisable and dividing that product by (2) 50% of the then current per
share market price of the Common Shares of the Principal Party (determined
pursuant to Section 11(d)) on the date of consummation of such consolidation,
merger, statutory share exchange, sale or transfer; provided, however, that
the Purchase Price and the number of Common Shares of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided in
Section 11(f) of this Agreement to reflect any events occurring in respect of
such Principal Party after the date of such consolidation, merger, statutory
share exchange, sale or transfer; (ii) the Principal Party shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger,
statutory share exchange, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to the Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply to the Principal
Party; and (iv) the Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) in connection with such consummation of any
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;
provided, however, that, upon the subsequent occurrence of any consolidation,
merger, statutory share exchange, sale or transfer of assets or other
extraordinary transaction 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 as provided in this Section 13(a), and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (w), (x) or (y)
of the first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such
merger, consolidation or statutory share exchange, or, if there is more than
one such issuer, the issuer the Common Shares of which has the greatest
aggregate market value of shares outstanding, or if no securities are so
issued, (A) the Person that is the other party to the merger, consolidation or
statutory share exchange, if such Person survives said merger or statutory
share exchange, or, if there is more than one such Person, the Person the
Common Shares of which has the greatest aggregate market value of shares
outstanding or (B) if the Person that is the other party to the merger or
statutory share exchange does not survive the merger or statutory share
exchange, the Person that does survive the merger or statutory share exchange
(including the Company if it survives) or (C) the Person resulting from the
consolidation.
(ii) in the case of any transaction described in (z) of the first
sentence in this Section 13, 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 is the
issuer of Common Shares having the greatest aggregate market value of shares
outstanding;
provided, however, that in any such case, (x) if the Common Shares of such
Person are not at such time and have not been continuously during 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; (y) in case such Person is a subsidiary, directly or
indirectly, of more than one Person, the Common Shares of all of which are and
have been so registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Shares having the greatest market value of
shares outstanding, and (z) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in (x)
and (y) above shall apply to each of the owners having an interest in such
joint venture as if the Person owned by the joint venture were a "subsidiary"
of both or all of such joint venturers and the Principal Parties in each such
case shall bear the obligations set forth in this Section 13 in the same ratio
as their direct or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any such consolidation,
merger, statutory share exchange, sale or transfer unless prior thereto the
Company and the Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that, as soon
as practicable after the date of any consolidation, merger, statutory share
exchange, sale or transfer mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing and use
its best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act) until the
date of expiration of the Rights and similarly comply with applicable state
securities laws;
(ii) deliver to holders of the Rights financial statements for the
Principal Party and each of its Affiliates which comply in all respects with
the requirements for registration on Form 10 under the Exchange Act;
(iii) use its best efforts, if the Common Shares of the Principal
Party shall be listed or admitted to trading on any national securities
exchange or quoted on any automated quotation system, to list or admit to
trading (or continue the listing or trading of) the Rights and the securities
purchasable upon exercise of the Rights on such national securities exchange
or have the Rights or such securities quoted on such automated quotation
system and, if the Common Shares of the Principal Party shall not be listed or
admitted to trading on any national securities exchange or quoted on any
automated quotation system, to cause the Rights and the securities purchasable
upon exercise of the Rights to be listed or admitted to trading on a national
securities exchange or quoted in an automated quotation system then in use;
and
(iv) 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 statutory share exchanges or sales or other transfers.
In the event that one of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
(d) Furthermore, in case the Principal Party which is to be a party
to a transaction referred to in this Section 13 has provision in any of its
authorized securities or in its certificate of incorporation or by-laws or
other instrument governing its corporate affairs, which provision would have
the effect of (i) causing such Principal Party to issue (other than to holders
of Rights pursuant to this Section 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, Common Shares of such Principal Party at less than the then current market
price per share (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Shares of such Principal Party at
less than such then current market price, or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of the
Common Shares of such Principal Party pursuant to the provisions of Section
13, then, in such event, the Company hereby agrees with each holder of Rights
that it shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that
the authorized securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(e) The Company covenants and agrees not to enter into any
transaction of the kind listed in this Section 13 if at the time of such
transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights. The provisions
of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
(f) If, for any reason, the Rights cannot be exercised for Common
Shares of the Company or such Principal Party, then a holder of Rights will
have the right to exchange such Rights, without payment of the applicable
exercise price, for cash from the Company or such Principal Party in an amount
equal to the number of Common Shares he would otherwise be entitled to
purchase times 50% of the then current market price, as determined pursuant to
Section 11(d) hereof, of such Common Shares of the Company or such Principal
Party. If, for any reason, including, without limitation, if such Principal
Party is an individual, private partnership or private company, the foregoing
cannot be applied to determined the cash amount into which the Rights are
exchangeable, then the Board of Directors of the Company, based upon the
advice from one or more investment banking firms, shall determine such amount
reasonably and with utmost good faith to the holders of the Rights. Any such
determination shall be binding and final.
(g) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparts (w),
(x), (y) and (z) of paragraph (a) of this Section 13 if (i) such transaction
is consummated with a Person or Persons who acquired Common Shares pursuant to
a cash tender offer for all outstanding Common Shares which complies with the
provisions of Section 11(a)(ii)(B) hereof (or a wholly-owned subsidiary of
such Person or Persons), (ii) the price per Common Share offered in such
transaction is not less than the price per Common Share paid to all holders of
Common Shares whose shares were purchased pursuant to such cash tender offer
and (iii) the form of consideration being offered to the remaining holders of
Common Shares pursuant to such transaction is the same as the form of
consideration paid pursuant to such cash tender offer. Upon consummation of
any such transaction contemplated by this paragraph, all Rights hereunder
shall expire.
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed 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, the last quoted sale price or, if not so quoted, the average of the
closing bid and asked prices in the over-the- counter market, as reported by
NASDAQ or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to issue certificates which evidence
fractions of Common Shares. In lieu of fractional Common Shares, the Company
shall pay to the registered holders of Right Certificates at the time the
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Common Share. For purposes of
this Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by the
Right Certificate in the manner provided in the Right Certificate and in this
Agreement and subject to the limitations set forth in the Right Certificates
and in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Common Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in this Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability relating to
the Rights or this Agreement. In no case will the Rights Agent be liable for
special, indirect, incidental or consequential loss or damage of any kind
whatsoever, even if the Rights Agent has been advised of the possibility of
such loss or damage.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation or limited liability company into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be consolidated,
or any corporation or limited liability company resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be
a party, or any corporation or limited liability company succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation or limited liability company
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in
the name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been counter- signed, the Rights
Agent may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any
action hereunder, the fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and the certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon the
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due 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 responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions
of Sections 3, 11, 13 or 24 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 Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether
any Common Shares will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions from any of such officers. At any time the
Rights Agent may apply to the Company for written instructions with respect to
any matter arising in connection with the Rights Agent's duties and
obligations arising under this Rights Agreement. Such application by the
Rights Agent for written instructions from the Company may, at the option of
the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent with respect to its duties or obligations under
this Rights Agreement and the date on and/or after which such action shall be
taken and the Rights Agent shall not be liable for any action taken or omitted
in accordance with a proposal included in any such application on or after the
date specified therein (which date shall be not less than one business day
after the Company receives such application, without the Company's consent)
unless, prior to taking or omitting any such action, the Rights Agent has
received written instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form
of assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has not been completed to certify the holder is
not an Acquiring Person (or an Affiliate or Associate thereof), the Rights
Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer
agent of the Common Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Shares by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make the appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with the notice, submit his
Right Certificate for inspection by the Company), then the Company shall
become the Rights Agent, and 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 a court, shall be a corporation or a limited liability company, or an
affiliate of such a corporation or limited liability company, organized and
doing business under the laws of the United States or of the States of
Maryland or New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
States of Maryland or New York), in good standing, that is authorized under
those laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authorities and that has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date and
prior to the earlier of the Redemption Date and the Expiration Date, the
Company may with respect to Common Shares so issued or sold pursuant to (i)
the exercise of stock options; (ii) any employee plan or arrangement, (iii)
the exercise, conversion or exchange of notes, debentures or other securities
issued by the Company or (iv) any other contractual obligation of the Company,
in each case existing prior to the Distribution Date, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale.
Section 23. Redemption. (a) The Board of Directors of the Company
may, at its option, by a vote which includes the concurrence or approval of a
majority of the Disinterested Directors, at any time prior to the earlier of
(i) the close of business on the tenth day following the Share Acquisition
Date (or, if the Share Acquisition Date shall have occurred prior to the
Effective Date, the close of business on the tenth day following the Effective
Date), or (ii) the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a redemption price of $.01 per Right, 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, and a Triggering Event shall not be deemed to
have occurred, until such time as the Company's right of redemption hereunder
has expired.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (or such later time as the Board
of Directors may establish for the effectiveness of such redemption), and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall promptly give
public notice of any such redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to the holders of the then outstanding Rights by mailing the notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. In any case, failure
to give such notice by mail, or any defect in the notice, to any particular
holder of Rights shall not affect the sufficiency of the notice to other
holders of Rights.
Section 24. Notice of Certain Events. In case the Company shall
propose at any time following the Distribution Date (a) to pay any dividend
payable in stock of any class to the holders of the Common Shares or to make
any other distribution to the holders of the Common Shares (other than a
regular quarterly cash dividend) or (b) to offer to the holders of its Common
Shares rights or warrants to subscribe for or to purchase any additional
Common Shares or shares of stock of any class or any other securities, rights
or options, or (c) to effect any reclassification of its Common Shares (other
than a reclassification involving only the subdivision of outstanding Common
Shares), (d) to effect any consolidation, merger or statutory share exchange
into or with, or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person 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, in accordance with
Section 25 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, or distribution of rights
or warrants, or the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the
holders of the Common Shares, if any such date is to be fixed, and the notice
shall be so given in the case of any action covered by clause (a) or (b) above
at least 10 days prior to the record date for determining holders of the
Common Shares for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Common
Shares, whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to each holder of a Right (or if occurring prior
to the Distribution Date, the holders of Common Shares), in accordance with
Section 25 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.
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 Xxxxxx Group, Inc.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
ChaseMellon Shareholder Services, L.L.C.
15th Floor
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to the holder at the address of the 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 without the approval of any holders of
certificates representing Common Shares, including, without limitation, any
supplement or amendment deemed necessary or appropriate by the Company in
light of any judicial or other legal developments, whether or not controlling
precedent in respect of this Agreement. 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 Rights 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
(which lengthening or shortening, following the first occurrence of an event
set forth in clauses (i) and (ii) of the first proviso to Section 23(a)
hereof, shall be effective only upon the concurrence or approval of a majority
of Disinterested Directors), or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of
any Acquiring Person); provided; however, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
Sentence, (A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights.
Without limiting the foregoing, the Company may at any time prior to such time
as any Person becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Section 1(a) and 3(a) hereof from 20% to any
percentage greater than the greater of (i) the largest percentage of the
outstanding Common Shares then known by the Company to be beneficially owned
by any Person (other than the Company, any wholly-owned Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary, or any
Person holding Common Shares for or pursuant to the terms of any such plan)
and (ii) 10%.
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 and shall be fully protected by Section 18 in so
doing. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made which changes the Final Expiration
Date to a date earlier than the tenth (10th) anniversary of the Effective
Date, or which changes the Redemption Price or the number of Common Shares for
which a Right is exercisable. Prior to the Distribution Date, the interest of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Shares.
Section 27. Exchange. (a) Subject to any limitations of applicable
law, the Board of Directors of the Company may, at its option, at any time
after any person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any time
after any Person (other than the Company, any wholly-owned Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary, or any
Person holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 27 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only rights thereafter of a
holder of such Rights shall be to receive that number of Common Shares equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Common Shares
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 11(a)(ii) hereof) held by
each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange
of Rights as contemplated in accordance with this Section 27, the Company
shall take all such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company shall pay to the
registered holder of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole Common Share. For
the purposes of this subsection (d), the current market value of a whole
Common Share shall be the closing price of a Common Share (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately after the
public announcement by the Company that an exchange is to be effected pursuant
to this Section 27.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, except as explicitly otherwise provided in
this Agreement, the Board of Directors of the Company (with, where
specifically provided for herein, the concurrence or approval of the
Disinterested Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the
concurrence or approval of the Disinterested Directors) or to the Company, or
as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (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 (with, where specifically provided for
herein, the concurrence or approval of the Disinterested Directors) in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (y) not subject
the Board or the Disinterested Directors to any liability to the holders of
the Rights.
Section 30. 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 Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Maryland and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 33. 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 34. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
THE XXXXXX GROUP, INC.
Attest:
By Xxxxx Xxxxxxxx By /s/ Xxxxxxx X. Xxxxxx
--------------------------- -------------------------
Title: Assistant Secretary Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
and Chief Financial
Officer
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
Attest:
By Xxxxx X. Xxxxx By /s/ Xxxx Xxx
--------------------------- ----------------------------
Title: Vice President Name: Xxxx Xxx
Title: Relationship Manager
Exhibit A
[Form of Right Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER JANUARY __, 2007 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS EACH IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID.
Right Certificate
THE XXXXXX GROUP, INC.
This certifies that , or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of October __, 1996 (the "Rights Agreement")
between THE XXXXXX GROUP, INC., a Maryland corporation (the "Company"), and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., a limited liability company (the
"Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 P.M. (Baltimore time) on January __, 2007 at the principal office of
the Rights Agent in Baltimore, Maryland, or at the office of its successors as
Rights Agent, one fully paid, nonassessable share of the Common Stock, par
value $1.00 per share, of the Company (the "Common Shares"), at a purchase
price of $70 per share (the "Purchase Price"), upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase set forth on
the reverse side hereof and the Certificate contained therein duly executed.
The number of Rights evidenced by this Right Certificate (and the number of
Common Shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as
of ________, based on the Common Shares as constituted at such date.
Upon the occurrence of an event described in Section 11(a)(ii) of the
Rights Agreement, all Rights evidenced by this Rights Certificate which are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights Agreement), (ii)
a transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of
a person who, concurrently with or after such transfer, became an Acquiring
Person, shall become null and void and no such holder hereof shall have any
right with respect to such Rights from and after the occurrence of such event.
As provided in the Rights Agreement, the Purchase Price and the number of
Common Shares or other securities which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the principal office of the Rights Agent in Baltimore,
Maryland.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled the holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may, but are not required to be (i) redeemed by the Company
at a redemption price of $.01 per Right or (ii) exchanged in whole or in part
for Common Shares.
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby, but in lieu thereof a cash payment will be made,
as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Common Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be 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 __________________, 19__.
ATTEST: THE XXXXXX GROUP, INC.
By
----------------------------- --------------------------
Secretary Title:
Countersigned the _____ day of
____________, 19__:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By
---------------------------
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder is such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________
Attorney, to transfer the within Right Certificate on the books of the within-
named Company, with full power of substitution.
Dated:__________________, 19__
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
[Form of Reverse Side of Right Certificate -- continued]
CERTIFICATION FOR TRANSFER
(To be executed in connection with any
transfer of the Right Certificate.)
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ______________________, 19__ ________________________
----------------------- -------------------------
Signature
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: THE XXXXXX GROUP, INC.
The undersigned hereby irrevocably elects to exercise _________________ Rights
represented by this Right Certificate to purchase the Common Shares issuable
upon the exercise of such Rights and requests that certificates for such
Common Shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated ___________________, 19__
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Right
Certificate in every particular,
without alteration or enlargement
or any change whatsoever)
[Form of Reverse Side of Right Certificate -- continued]
Signature Guaranteed
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
CERTIFICATION FOR ELECTION TO PURCHASE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ______________________, 19__ ________________________
----------------------- -------------------------
Signature
NOTICE
------
The signatures in the foregoing Forms of Assignment and Election to
Purchase 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 in the Forms of Assignment
and Election to Purchase 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 Rights
Certificate.
Exhibit B
THE XXXXXX GROUP, INC.
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On October 18, 1996 the Board of Directors of The Xxxxxx Group, Inc. (the
"Company") declared a dividend of one common share purchase right (a "Right")
for each outstanding share of common stock, par value $1.00 per share (the
"Common Shares"), of the Company. The dividend was payable on January __,
1997 (the "Effective Date") to the stockholders of record on that date. Each
Right entitles the registered holder to purchase from the Company one Common
Share at a price of $70 per share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Rights Agent"), dated as
of October __, 1996.
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") acquired, or obtained the right to acquire, beneficial ownership of
20% or more of the outstanding Common Shares or (ii) 10 days following the
commencement or announcement of an intention to make a tender offer or
exchange offer the consummation of which would result in a Person, together
with its Affiliates and Associates, becoming the beneficial owner of 20% or
more of such outstanding Common Shares (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record Date, by such
Common Share certificate with a copy of this Summary of Rights attached
thereto. An Acquiring Person is defined as any Person or group of affiliated
or associated persons, other than employee benefit plans of the Company and
its subsidiaries. The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Share certificates issued after the Record Date upon
transfer or new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Shares outstanding as of the Record
Date, even without such notation or a copy of this Summary of Rights being
attached thereto, will also constitute the transfer of the Rights associated
with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on the tenth (10th) anniversary of the Effective Date, unless
earlier redeemed by the Company as described below.
In the event that the Company were acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power were sold, proper provision will be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at the
then current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction would
have a market value of two times the exercise price of the Right. In the
event that the Company were the surviving corporation in a merger and the
Common Shares were not changed or exchanged, or in the event that any person,
alone or together with its affiliates and associates, becomes the beneficial
owner of 20% or more of the Common Shares then outstanding and hence an
Acquiring Person (other than pursuant to a tender offer or exchange offer for
all outstanding Common Shares which is determined by a majority of the members
of the Board of Directors who are not officers of the Company and who are not
representatives, nominees, affiliates or associates of an Acquiring Person, to
be fair and in the best interest of stockholders) or in the event that an
Acquiring Person engages in one of a number of self-dealing transactions
specified in the Rights Agreement (a "Flip-In-Event"), proper provision will
be made so that each holder of a Right, other than Rights that were or are
beneficially owned by the Acquiring Person (which will thereafter be null and
void), will thereafter have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise price of the
Right. However, Rights are not exercisable following the occurrence of any of
the events set forth above until such time as the Rights are no longer
redeemable by the Corporation as set forth below.
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 Common Shares will be issued and in lieu
thereof, a payment in cash will be made based on the market price of the
Common Shares on the last trading date prior to the date of exercise.
At any time after any person becomes an Acquiring Person, the Board of
Directors of the Company may, at its option, exchange all or part of the then
outstanding and exercisable Rights (excluding Rights of an Acquiring Person
that have become void) for Common Shares at an exchange ratio of one Common
Share per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof.
Notwithstanding the foregoing, the Board of Directors shall not be empowered
to effect such exchange at any time after any Acquiring Person, together with
all Affiliates and Associates of such Person, becomes the Beneficial Owner of
50% or more of the Common Shares then outstanding.
At any time prior to the earlier of ten days following the Share
Acquisition Date or the date the Rights expire, the Rights are redeemable at
the election of a majority of the board of directors of the Company (including
a majority of the Disinterested Directors), in whole, but not in part, at a
price of $.01 per Right.
The term "Disinterested Directors" means any member of the Board of
Directors of the Company who while a member of the Board is not (i) an
Acquiring Person or representative, Affiliate or Associate thereof or (ii) any
other Person or representative, Affiliate or Associate thereof who has stated
an intent to take or consider taking any action which would result in such
Person becoming an Acquiring Person or which would cause a Triggering Event.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set forth above.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date,
including, without limitation, any amendment deemed to be necessary or
appropriate in light of any judicial or other legal developments, whether or
not binding precedent in respect of the Rights Agreement. After the
Distribution Date, the provisions of the Rights Agreement may be amended by
the Board (in certain circumstances, with the concurrence of the Disinterested
Directors) in order to cure any ambiguity, to make changes which do not
adversely affect the interest of holders of Rights (excluding the interests of
any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to lengthen the time
period governing redemption shall be made at such time as the Rights are not
redeemable. Without limiting any of the foregoing, at any time prior to a
Person (other than certain employee benefit plans of the Company) becoming an
Acquiring Person, the Board may amend the Rights Agreement to lower the
threshold for exercisability of the Rights (and the determination of the
existence of an Acquiring Person) from 20% to any percentage greater than the
greater of (i) the largest percentage of outstanding Common Shares then known
to the Company to be beneficially owned by any Person or group or affiliated
or associated persons (other than employee benefit plans of the Company and
its subsidiaries) and (ii) 10%.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as and Exhibit to the Company's Registration Statement on
Form 8-A dated December __, 1996. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to
the Rights Agreement, as amended, which is hereby incorporated herein by
reference.
Dated: October __, 1996
