EXHIBIT 7.1
EXECUTION COPY
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DUKE REALTY INVESTMENTS, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
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RIGHTS AGREEMENT
Dated as of July 23, 1998
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TABLE OF CONTENTS
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PAGE
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SECTION 1. Certain Definitions ........................................ 1
SECTION 2. Appointment of Rights Agent ................................ 6
SECTION 3. Issue of Rights Certificates ............................... 6
SECTION 4. Form of Rights Certificates ................................ 7
SECTION 5. Countersignature and Registration .......................... 8
SECTION 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates............................... 8
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights................................................... 9
SECTION 8. Cancellation and Destruction of Rights
Certificates................................................ 10
SECTION 9. Reservation and Availability of Capital Stock .............. 10
SECTION 10. Record Date upon Exercise of Rights......................... 12
SECTION 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights.................................. 12
SECTION 12. Certificate of Adjusted Purchase Price or Number of
Shares...................................................... 20
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power............................................ 20
SECTION 14. Fractional Rights and Fractional Shares .................... 23
SECTION 15. Rights of Action ........................................... 24
SECTION 16. Agreement of Rights Holders ................................ 24
SECTION 17. Rights Certificate Holder Not Deemed a
Stockholder................................................. 25
SECTION 18. Concerning the Rights Agent ................................ 25
SECTION 19. Merger or Consolidation or Change of Name of
Rights Agent................................................ 25
SECTION 20. Duties of Rights Agent ..................................... 26
SECTION 21. Change of Rights Agent ..................................... 28
SECTION 22. Issuance of New Rights Certificates ........................ 28
SECTION 23. Redemption and Termination ................................. 29
SECTION 24. Notice of Certain Events ................................... 29
SECTION 25. Notices .................................................... 30
SECTION 26. Supplements and Amendments ................................. 30
SECTION 27. Successors ................................................. 31
SECTION 28. Determinations and Actions by the Board of
Directors, Etc.............................................. 31
SECTION 29. Benefits of this Agreement ................................. 31
SECTION 30. Severability ............................................... 32
SECTION 31. Governing Law .............................................. 32
SECTION 32. Counterparts ............................................... 32
SECTION 33. Captions ................................................... 32
SECTION 34. Exchange ................................................... 32
EXHIBITS
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EXHIBIT A. Form of Rights Certificate................................. A-1
EXHIBIT B. Summary of Rights and Preferred Stock...................... B-1
EXHIBIT C. Form of Articles of Amendment for Preferred Stock.......... C-1
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of July 23, 1998 (the "AGREEMENT"), between
Duke Realty Investments, Inc., an Indiana corporation (the "COMPANY"), and
American Stock Transfer & Trust Company, a New York corporation (the
"RIGHTS AGENT").
WHEREAS, effective July 23, 1998 (the "RIGHTS DIVIDEND DECLARATION
DATE"), the Board of Directors of the Company authorized and declared a
dividend distribution of one preferred stock purchase right ("RIGHT") for
each share of common stock, par value $.01 per share, of the Company (the
"COMPANY COMMON STOCK") outstanding at the Close of Business on August 3,
1998 (the "RECORD DATE"), and has authorized the issuance of one Right (as
such number may hereinafter be adjusted pursuant to the provisions of this
Agreement) for each share of Company Common Stock issued (whether
originally issued or delivered from the Company's treasury) between the
Record Date and, except as otherwise provided in Section 22, the
Distribution Date, each Right initially representing the right to purchase
one Unit (each as hereinafter defined) upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
"ACQUIRING PERSON" shall mean any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such a plan acting in such capacity) who or which, alone or together
with all Affiliates and Associates of such Person, is the Beneficial Owner
of 15% or more of the shares of Company Common Stock then outstanding,
which shares were acquired by such Person other than pursuant to a
Permitted Offer. Notwithstanding the foregoing, (i) no Person shall become
an "Acquiring Person" as a result of an acquisition of Company Common Stock
by the Company which, by reducing the number of shares of the Company
Common Stock outstanding, increases the proportionate number of shares
Beneficially Owned by such Person to 15% or more of the Company Common
Stock then outstanding; PROVIDED, HOWEVER, that if a Person shall become
the Beneficial Owner of 15% or more of the Company Common Stock by reason
of share purchases by the Company and shall, after such share purchases by
the Company, become the Beneficial Owner of any additional Company Common
Stock other than as a direct or indirect result of any corporate action
taken by the Company, then such Person shall be deemed to be an "Acquiring
Person"; and (ii) if a majority of the Continuing Directors determines in
good faith that a Person who would otherwise be an "Acquiring Person," as
defined pursuant to the first sentence of this definition, has become such
inadvertently (including, without limitation, because (a) such Person was
unaware that it Beneficially Owned 15% or more of the Company Common Stock
or (b) such Person was aware of the extent of such Beneficial Ownership but
such Person acquired Beneficial Ownership of such shares of Company Common
Stock without the intention to change or influence the control of the
Company and without actual knowledge of the consequences of such Beneficial
Ownership under this Agreement), and such Person divests itself as promptly
as practicable of a sufficient number of shares of Company Common Stock so
that such Person would no longer be an "Acquiring Person," as defined
pursuant to the first sentence of this definition, then such Person shall
not be deemed to be, or have been, an "Acquiring Person" for any purposes
of this Agreement, and no Stock Acquisition Date shall be deemed to have
occurred. All questions as to whether a Person who would otherwise be an
Acquiring Person has become such inadvertently shall be determined in good
faith by a majority of the Continuing Directors, which determination shall
be conclusive for all purposes.
"ADJUSTMENT UNITS" has the meaning set forth in Section 11(a)(ii).
"ADVERSE PERSON" shall mean any Person declared to be an Adverse
Person by a majority of the Continuing Directors upon determination that
the criteria set forth in Section 11(a)(ii)(B) apply to such Person.
"AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date hereof.
A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be
deemed to "BENEFICIALLY OWN," any securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is considered to be a "beneficial owner" under Rule 13d-3
of the General Rules and Regulations under the Exchange Act (the
"EXCHANGE ACT REGULATIONS") as in effect on the date hereof; PROVIDED,
HOWEVER, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," any securities under this subparagraph (i)
as a result of an agreement, arrangement or understanding to vote such
securities if such agreement, arrangement or understanding (A) arises
solely from a revocable proxy given in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the Exchange Act and the Exchange Act Regulations, and
(B) is not reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor form);
(ii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate of such 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 as described in the proviso to
subparagraph (i) above) or disposing of such securities; or
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time or upon the satisfaction of conditions) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or
upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; PROVIDED, HOWEVER, that under this
definition a Person shall not be deemed the "Beneficial Owner" of, or
to "beneficially own," (A) securities tendered pursuant to a tender or
exchange offer made in accordance with the Exchange Act Regulations by
such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange, (B)
securities that may be issued upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (C) securities that
may be issued upon exercise of Rights from and after the occurrence of
a Triggering Event, which Rights were acquired by such Person or any
of such Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(c) or Section 22 (the "ORIGINAL RIGHTS")
or pursuant to Section 11(i) in connection with an adjustment made
with respect to any Original Rights.
Notwithstanding the foregoing, nothing contained in this
definition shall cause a Person ordinarily engaged in business as an
underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired in a BONA FIDE firm
commitment underwriting pursuant to an underwriting agreement between
such Person and the Company, unless such Person shall make a filing on
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Schedule 13D (or any comparable or successor form) with respect to
such securities.
"BOARD" means the Board of Directors of the Company.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
day on which either (i) banking institutions in New York City are
authorized or obligated by law or executive order to close or (ii) the New
York Stock Exchange, Inc. does not open for trading.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m., New York
City time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
"COMMON STOCK" of any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or, if such
Person shall have no capital stock, the equity securities or other equity
interest having power to control or direct the management of such Person.
"COMPANY COMMON STOCK" has the meaning set forth in the Whereas
Clause.
"CONTINUING DIRECTOR" shall mean (i) any member of the Board who was a
member of the Board prior to the date of this Agreement, while such Person
is a member of the Board, so long as such Person is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a
representative or nominee of an Acquiring Person or of any such Affiliate
or Associate, (ii) any Person who becomes a member of the Board after the
date of this Agreement, pursuant to a nomination for election or election
to the Board that is recommended or approved by a majority of the
Continuing Directors, while such Person is a member of the Board, so long
as such Person is not an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, or a representative or nominee of an Acquiring Person
or of any such Affiliate or Associate, (iii) any Person who has been a
member of the Board for at least 18 months, or (iv) any Specially Approved
Director.
"CURRENT MARKET PRICE" has the meaning set forth in Section 11(d).
"CURRENT VALUE" has the meaning set forth in Section 11(a)(iii).
"DISTRIBUTION DATE" has the meaning set forth in Section 3(a).
"EQUIVALENT COMPANY COMMON STOCK" has the meaning set forth in Section
11(b).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCHANGE RATIO" has the meaning set forth in Section 34(a).
"EXPIRATION DATE" shall mean the earliest of (i) the Final Expiration
Date, (ii) the time at which the Rights are redeemed (or deemed redeemed)
as provided in Section 23 and (iii) the time at which all Rights then
outstanding and exercisable are exchanged (or deemed exchanged) pursuant to
Section 34.
"FINAL EXPIRATION DATE" shall mean the Close of Business on July 23,
2008.
"40% PERSON" shall mean any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with respect
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to such a plan acting in such capacity) who or which, alone or together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 40% or more of the shares of Company Common Stock then
outstanding, which shares were acquired by such Person other than pursuant
to a Permitted Offer; PROVIDED, HOWEVER, that the term "40% Person" shall
not include any Person who is the Beneficial Owner of 40% or more of the
Company Common Stock then outstanding by virtue of ownership of Company
Common Stock by such Person's Affiliates and/or Associates, which
Affiliates and/or Associates are deemed to be Affiliates and/or Associates
solely by reason of each of them being directors or officers of the Company
or members of a slate of directors, proposed by management, standing for
election to such Board.
"PERMITTED OFFER" shall mean a tender or exchange offer by any Person
for all outstanding shares of Company Common Stock which a majority of the
Continuing Directors determines (which determination shall be effective
only if the Continuing Directors constitute a majority of the directors
then in office), based upon the advice of a nationally recognized
investment banking firm and such other advice as the Continuing Directors
deem appropriate, is fair from a financial point of view to the
stockholders of the Company (other than such Person) and otherwise in the
best interests of the Company and its stockholders (other than such
Person). A Permitted Offer will cease to be such if, prior to the
acquisition of Beneficial Ownership of any Company Common Stock pursuant
thereto, a majority of the Continuing Directors so determines, and in such
event the tender or exchange offer shall be deemed for purposes of Section
3 commenced on the date of such determination.
"PERSON" shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as
any syndicate or group deemed to be a person under Section 14(d)(2) of the
Exchange Act.
"PREFERRED STOCK" shall mean the Series C Junior Preferred Stock, par
value $.01 per share, of the Company having such voting powers,
designation, preferences and relative, participating, optional or other
special rights and qualifications, limitations and restrictions as are
described in the form of Articles of Amendment attached as EXHIBIT C
hereto.
"PRINCIPAL PARTY" has the meaning set forth in Section 13(b).
"PURCHASE PRICE" has the meaning set forth in Section 7(b).
"RECORD DATE" has the meaning set forth in the Whereas Clause.
"REDEMPTION PRICE" has the meaning set forth in Section 23(a).
"REGISTERED COMMON STOCK" has the meaning set forth in Section 13(b).
"REGISTRATION DATE" has the meaning set forth in Section 9(c).
"REGISTRATION STATEMENT" has the meaning set forth in Section 9(c).
"RIGHT" has the meaning set forth in the Whereas Clause.
"RIGHTS CERTIFICATE" has the meaning set forth in Section 3(a).
"RIGHTS DIVIDEND DECLARATION DATE" has the meaning set forth in the
Whereas Clause.
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"SECTION 11(A)(II) EVENT" shall mean any event described in Section
11(a)(ii)(A), (B), (C) or (D).
"SECTION 13 EVENT" shall mean any event described in clause (x), (y)
or (z) of Section 13(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SPECIALLY APPROVED DIRECTOR" shall mean any Person who was (x) duly
nominated for election to the Board in accordance with the applicable
requirements of the Company's By-Laws and the Indiana Business Corporation
Law after timely written notice ("SPECIAL NOMINATION NOTICE") delivered to
the Company by the record owners of not less than 10% of the Company Common
Stock then outstanding, which notice contained all the information
described in the remainder of this paragraph, and (y) elected to the Board
at an annual meeting of stockholders of the Company by the affirmative vote
of the holders of not less than 85% of the Company Common Stock then
outstanding. To be timely, a Special Nomination Notice shall be delivered
to the principal executive offices of the Company not less than 60 days nor
more than 90 days prior to the first anniversary of the preceding year's
annual meeting of stockholders; PROVIDED, HOWEVER, that in the event that
the date of the annual meeting is advanced by more than 30 days or delayed
by more than 60 days from such anniversary date, to be timely the Special
Nomination Notice must be so delivered not earlier than the 90th day prior
to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the tenth day
following the day on which public announcement of the date of such meeting
is first made. The Special Nomination Notice shall set forth (i) as to
each nominee for election or reelection as a Specially Approved Director
all information relating to such Person that is required to be disclosed in
solicitations of proxies for election of directors or is otherwise
required, in each case pursuant to Regulation 14A under the Exchange Act
(including such Person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected) and (ii) as
to the stockholder giving notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made, (x) the name and address of such
stockholder, as they appear on the Company's books, and of such beneficial
owner and (y) the number of shares of the Company Common Stock which are
owned beneficially and of record by such stockholder and such beneficial
owner.
"SPREAD" has the meaning specified in Section 11(a)(iii).
"STOCK ACQUISITION DATE" shall mean the first date of public
announcement (including, without limitation, the filing of any report
pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such or by the Company
that an Adverse Person has become such.
"SUBSIDIARY" shall mean, with respect to any Person, any other Person
of which an amount of voting securities or equity interests sufficient to
elect at least a majority of the directors or equivalent governing body of
such other Person is beneficially owned, directly or indirectly, by such
first-mentioned Person, or otherwise controlled by such first-mentioned
Person.
"SUBSTITUTION PERIOD" has the meaning set forth in Section 11(a)(iii).
"SUMMARY OF RIGHTS" has the meaning set forth in Section 3(b).
"TRANSFER AGENT" has the meaning set forth in Section 7(e).
"TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
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"UNIT" shall mean one one-thousandth of a share of Preferred Stock.
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. With the consent of the Rights Agent, the Company may from
time to time appoint such co-rights agents as it may deem necessary or
desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the earliest of
(i) the Close of Business on the tenth Business Day (or such later date as
may be determined by action of a majority of the Continuing Directors prior
to such time) after the Stock Acquisition Date, (ii) the Close of Business
on the tenth Business Day (or such later date as may be determined by
action of a majority of the Continuing Directors prior to such time) after
the date that a tender or exchange offer (other than a Permitted Offer) by
any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan maintained by the Company or any of its Subsidiaries
or any trustee or fiduciary with respect to such a plan acting in such
capacity) is first published or sent or given within the meaning of Rule
14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 15% or
more of the shares of Company Common Stock then outstanding, and (iii) the
first date of public announcement (including, without limitation, the
filing of any report pursuant to Section 13(d) of the Exchange Act) by the
Company or a 40% Person that a 40% Person has become such (the earliest of
(i), (ii) and (iii) above being the "DISTRIBUTION DATE"), (x) the Rights
will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for shares of Company Common Stock
registered in the names of the holders of shares of Company Common Stock as
of and subsequent to the Record Date (which certificates for shares of
Company Common Stock shall be deemed also to be certificates for Rights)
and not by separate certificates, and (y) the Rights will be transferable
only by transfer of the underlying shares of Company Common Stock
(including a transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class, insured,
postage-prepaid mail, to each record holder of shares of Company Common
Stock as of the Close of Business on the Distribution Date, at the address
of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form attached as EXHIBIT A hereto (the
"RIGHTS CERTIFICATES"), evidencing one Right for each share of Company
Common Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Company
Common Stock has been made pursuant to Section 11(p), at the time of
distribution of the Rights Certificates, the Company may make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a)) so
that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights, in a form which may be appended to
certificates that represent shares of Company Common Stock, in
substantially the form of EXHIBIT B attached hereto (the "SUMMARY OF
RIGHTS"), by first-class, postage-prepaid mail, to each record holder of
shares of Company Common Stock as of the Close of Business on the Record
Date, at the address of such holder shown on the records of the Company.
(c) Rights shall, without any further action, be issued in respect of
all shares of Company Common Stock which are issued (including any shares
of Company Common Stock held in treasury) after the Record Date but prior
to the earlier of the Distribution Date and the Expiration Date. To the
extent practicable, certificates representing such shares of Company Common
Stock and issued after the Record Date shall bear the following legend:
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This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement between Duke Realty Investments, Inc. (the
"COMPANY") and American Stock Transfer & Trust Company
(the "RIGHTS AGENT") dated as of July 23, 1998, as it
may be amended from time to time (the "RIGHTS
AGREEMENT"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at
the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly
after receipt of a written request therefor. Under
certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person or an Adverse
Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void and
nontransferable.
With respect to certificates representing shares of Company Common Stock
(whether or not such certificates include the foregoing legend or have
appended to them the Summary of Rights), until the earlier of the
Distribution Date and the Expiration Date, the Rights associated with the
shares of Company Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of the shares
of Company Common Stock shall also be the registered holders of the
associated Rights, and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the shares of Company
Common Stock represented by such certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES. (a) The Rights Certificates
(and the form of election to purchase and the form of assignment to be
printed on the reverse side thereof) shall each be substantially in the
form set forth in EXHIBIT A attached hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or any rule or regulation thereunder 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 Section 11 and Section 22, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date
and on their face shall entitle the holders thereof to purchase such number
of Units as shall be set forth therein at the price set forth therein, but
the amount and type of securities, cash or other assets that may be
acquired upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided in this Agreement.
(b) Any Rights Certificate issued pursuant to this Agreement that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) which becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) which
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and which receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person (or
any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding either the
transferred Rights, shares of Company Common Stock or the Company or (B) a
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transfer which a majority of the Continuing Directors has determined to be
part of a plan, arrangement or understanding which has as a primary purpose
or effect the avoidance of Section 7(e) shall, upon the written direction
of a majority of the Continuing Directors, contain (to the extent feasible)
the following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Adverse Person or an Affiliate or
Associate of an Acquiring Person or an Adverse Person (as
such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void and
nontransferable in the circumstances specified in Section
7(e) of the Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) Rights
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, the President or one of its Vice Presidents under its corporate
seal reproduced thereon attested by its Secretary, Treasurer or one of its
Assistant Secretaries. The signature of any of these officers on the
Rights Certificates may be manual or facsimile. Rights Certificates
bearing the manual or facsimile signatures of the individuals who were at
any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the countersignature of such Rights Certificates or
did not hold such offices at the date of such Rights Certificates. No
Rights Certificate shall be entitled to any benefit under this Agreement or
be valid for any purpose unless there appears on such Rights Certificate a
countersignature duly executed by the Rights Agent by manual signature of
an authorized signatory, and such countersignature upon any Rights
Certificate shall be conclusive evidence, and the only evidence, that such
Rights Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for surrender of Rights
Certificates upon exercise or transfer, books for registration and transfer
of the Rights Certificates issued hereunder. Such books shall show the
name and address of each holder of the Rights Certificates, the number of
Rights evidenced on its face by each Rights Certificate and the date of
each Rights Certificate.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14, at any time
after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of Units (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and
executed the certificate set forth in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) of the Rights represented by such Rights Certificate or Affiliates
or Associates thereof as the Company shall reasonably request; whereupon
the Rights Agent shall, subject to the provisions of Section 4(b), Section
7(e) and Section 14, countersign and deliver to the Person entitled thereto
a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
8
transfer, split up, combination or exchange of Rights Certificates.
(b) If a Rights Certificate shall be mutilated, lost, stolen or
destroyed, then upon request by the registered holder of the Rights
represented thereby and upon payment to the Company and the Rights Agent of
all reasonable expenses incident thereto, there shall be issued, in
exchange for and upon cancellation of the mutilated Rights Certificate, or
in substitution for the lost, stolen or destroyed Rights Certificate, a new
Rights Certificate, in substantially the form of the prior Rights
Certificate, of like tenor and representing the equivalent number of
Rights, but, in the case of loss, theft or destruction, only upon receipt
of evidence satisfactory to the Company and the Rights Agent of such loss,
theft or destruction of such Rights Certificate and, if requested by the
Company or the Rights Agent, indemnity also satisfactory to it.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Prior to the Expiration Date, the registered holder of any
Rights Certificate may, subject to the provisions of Sections 7(e) and
9(c), exercise the Rights evidenced thereby in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate, with
the form of election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights
Agent designated for such purpose, together with payment of the aggregate
Purchase Price (as hereinafter defined) for the number of Units of
Preferred Stock (or, following a Triggering Event, other securities, cash
or other assets, as the case may be) for which such surrendered Rights are
then exercisable.
(b) The purchase price for one Unit pursuant to the exercise of a
Right shall initially be $95.00, subject to adjustment from time to time as
provided in Sections 11 and 13(a) (such purchase price, as so adjusted,
being the "PURCHASE PRICE"), and shall be payable in accordance with
paragraph (c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation in good
standing organized under the laws of the United States or any State of the
United States, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination
by federal or state authority (such institution being the "TRANSFER
AGENT"), certificates representing the Units that may be acquired upon
exercise of the Rights. Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price for the Units (or, following a
Triggering Event, other securities, cash or other assets, as the case may
be) to be purchased thereby as set forth below and an amount equal to any
applicable transfer tax or evidence satisfactory to the Company of payment
of such tax, the Rights Agent shall, subject to Section 20(k), thereupon
promptly (i) requisition from the Transfer Agent (or make available, if the
Rights Agent is the Transfer Agent) certificates for such number of Units
as are to be purchased and the Company will direct the Transfer Agent to
comply with all such requests, (ii) requisition from the Company the amount
of cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14, (iii) after receipt of such certificates, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate. In the
event that the Company is obligated to issue Company Common Stock,
Preferred Stock or other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a), the Company will make
all arrangements necessary so that such Company Common Stock, Preferred
Stock or other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate. The payment of
the Purchase Price (adjusted pursuant to Section 11(a)(iii)) may be made in
9
cash or by certified or bank check or money order payable to the order of
the Company.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the Rights remaining unexercised shall be issued by
the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may
be designated by such holder, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of any Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Adverse Person, or an
Associate or Affiliate of an Acquiring Person or an Adverse Person, (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any such
Associate or Affiliate) which becomes a transferee after the Acquiring
Person or Adverse Person becomes such, or (iii) a transferee of an
Acquiring Person or an Adverse Person (or of any such Associate or
Affiliate) which becomes a transferee prior to or concurrently with the
Acquiring Person or Adverse Person becoming such and which receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person or Adverse Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person or
Adverse Person (or any such Associate or Affiliate) or to any Person with
whom the Acquiring Person or Adverse Person (or such Associate or
Affiliate) has any continuing agreement, arrangement or understanding
regarding the transferred Rights, shares of Company Common Stock or the
Company or (B) a transfer which a majority of the Continuing Directors has
determined to be part of a plan, arrangement or understanding which has as
a primary purpose or effect the avoidance of this Section 7(e), shall be
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 ensure that the provisions of this Section 7(e) and
Section 4(b) are complied with, but shall have no liability to any holder
of Rights or any other Person as a result of its failure to make any
determination under this Section 7(e) or Section 4(b) with respect to any
Acquiring Person or Adverse Person or any Affiliate, Associate or
transferee of any Acquiring Person or Adverse Person.
(f) Notwithstanding anything in this Agreement or any Rights
Certificate 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 by such registered holder
unless such registered holder shall have (i) completed and executed the
certificate following the form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) of the Rights represented by such Rights
Certificate or Affiliates or Associates thereof as the Company shall
reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Rights Certificates acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Rights Certificates, and in
such case shall deliver a certificate of destruction thereof to the
Company.
10
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a) The
Company shall at all times following the Distribution Date cause to be
reserved and kept available, out of its authorized and unissued shares of
capital stock, the number of shares of Preferred Stock (and, following a
Triggering Event, other securities) that, as provided in this Agreement,
will be sufficient to permit the exercise in full of all outstanding Rights
(or, if the amount of authorized shares of Preferred Stock (or such other
securities) not then issued or reserved for issuance other than upon
exercise of the Rights is not sufficient, the maximum amount of shares of
Preferred Stock (or such other securities) as is then available). Without
limiting the generality of the foregoing, the Company's Board of Directors
will, to the extent permitted by law, take such action as may be required
to increase the number of shares of Preferred Stock that the Company is
authorized to issue, to the extent necessary to permit the exercise in full
of all outstanding Rights. Upon the occurrence of any events resulting in
an increase in the aggregate number of Units (or other equity securities of
the Company) issuable upon exercise of all outstanding Rights above the
number then reserved, the Company shall make appropriate increases in the
number of Units or other securities so reserved.
(b) If the Units (and, following a Triggering Event, other
securities) to be issued and delivered upon the exercise of the Rights may
be listed on any national securities exchange or automated quotation
system, the Company shall during the period from the Distribution Date
through the Expiration Date use its best efforts to cause all securities
reserved for such issuance to be listed on such exchange or automated
quotation system upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination
by the Company in accordance with Section 11(a)(iii) of the consideration
to be delivered by the Company upon exercise of the Rights or, if so
required by law, as soon as practicable following the Distribution Date
(such date being the "REGISTRATION DATE"), to file a registration statement
on an appropriate form under the Securities Act, with respect to the
securities that may be acquired upon exercise of the Rights (the
"REGISTRATION STATEMENT"), (ii) to cause the Registration Statement to
become effective as soon as practicable after such filing, (iii) to cause
the Registration Statement to continue to be effective (and to include a
prospectus complying with the requirements of the Securities Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable
for the securities covered by the Registration Statement and (B) the
Expiration Date, and (iv) to take as soon as practicable following the
Registration Date such action as may be required to ensure that any
acquisition of securities upon exercise of the Rights complies with any
applicable state securities or "blue sky" laws. The Company may
temporarily suspend for a period of time not to exceed 90 days after the
date set forth in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file such
registration statement 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.
(d) The Company shall take such action as may be necessary to ensure
that all Units (and, following the occurrence of a Triggering Event, any
other securities that may be delivered upon exercise of Rights) shall be,
at the time of delivery of the certificates for such Units and of such
other securities, duly and validly authorized and issued and fully paid and
non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax
imposed in connection with the issuance or delivery of the Rights
Certificates or upon the exercise of Rights; PROVIDED, HOWEVER, that the
Company shall not be required to pay any such tax imposed in connection
with the issuance or delivery of Units, or any certificates or depositary
11
receipts for such Units (or, following the occurrence of a Triggering
Event, any other securities, cash or assets, as the case may be) to any
person other than the registered holder of the Rights Certificates
evidencing the Rights surrendered for exercise. The Company shall not be
required to issue or deliver any certificates or depositary receipts (or,
following the occurrence of a Triggering Event, any other securities, cash
or assets, as the case may be) to, or in a name other than that of, the
registered holder upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Rights
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. RECORD DATE UPON EXERCISE OF RIGHTS. Each Person in
whose name any certificate for Units (or, following the occurrence of a
Triggering Event, other securities) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Units (or, following the occurrence of a Triggering Event, other
securities) represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; PROVIDED, HOWEVER, that if the date of such surrender and
payment is a date upon which the Preferred Stock (or, following the
occurrence of a Triggering Event, the applicable other securities) transfer
books of the Company are closed, such Person shall be deemed to have become
the record holder of such securities on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or,
following the occurrence of a Triggering Event, the applicable other
securities) transfer books of the Company are open; and FURTHER PROVIDED
that if delivery of the Units is delayed pursuant to Section 9(c), such
Persons shall be deemed to have become the record holders of such Units
only when such Units first become deliverable. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate shall not
be entitled to any rights of a stockholder of the Company with respect to
securities 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 AND KIND OF SHARES
OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of securities
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 Stock or the
Preferred Stock payable in shares (or fractional shares) of Common
Stock or Preferred Stock, (B) subdivide the outstanding Common Stock
or Preferred Stock, (C) combine the outstanding Common Stock or
Preferred Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Common Stock
or the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in
this Section 11(a) and Section 7(e), the Purchase Price in effect at
the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number
and kind of Units (or the number and kind of other securities, as the
case may be), issuable on such date upon exercise of the Rights, shall
be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of Units
(or such other securities, as the case may be), which, if such Right
had been exercised immediately prior to such date, such holder would
have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
12
Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event:
(A) any Person shall become an Acquiring Person, other than
pursuant to any transaction which constitutes a Section 13 Event;
or
(B) a majority of the Continuing Directors shall declare by
resolution any Person to be an Adverse Person, upon a
determination that such Person, alone or together with its
Affiliates and Associates, has, at any time after this Agreement
has been filed with the Securities and Exchange Commission as an
exhibit to a filing under the Exchange Act, become the Beneficial
Owner of a number of shares of Company Common Stock which the
Continuing Directors determine to be substantial (which number of
shares shall in no event represent less than 10% of the
outstanding shares of Company Common Stock) and a determination
by the Continuing Directors, after reasonable inquiry and
investigation, including consultation with such persons as such
directors shall deem appropriate and consideration of such
factors selected by such directors as are permitted by applicable
law, that (a) such Beneficial Ownership by such Person is
intended to cause the Company to repurchase the shares of Common
Stock beneficially owned by such Person or to cause pressure on
the Company to take action or enter into a transaction or series
of transactions intended to provide such Person with short-term
financial gain under circumstances where the Continuing Directors
determine that the best long-term interests of the Company would
not be served by taking such action or entering into such
transaction or series of transactions at that time, or (b) such
Beneficial Ownership is causing or reasonably likely to cause a
material adverse impact (including, but not limited to,
impairment of relationships with customers or impairment of the
Company's ability to maintain its competitive position) on the
business or prospects of the Company, on the Company's employees,
customers or suppliers or on the communities in which the Company
operates or is located; or
(C) any Acquiring Person (for purposes of this Section
11(a)(ii)(C) and of Section 11(a)(ii)(D), the term "Acquiring
Person" shall be deemed to include an Adverse Person) or any
Associate or Affiliate of any Acquiring Person, at any time after
the date of this Agreement, directly or indirectly, (1) shall
merge into the Company or otherwise combine with the Company and
the Company shall be the continuing or surviving corporation of
such merger or combination and Company Common Stock shall remain
outstanding and unchanged, (2) shall, in one transaction or a
series of transactions, transfer any assets to the Company or to
any of its Subsidiaries in exchange (in whole or in part) for
shares of Company Common Stock, for other equity securities of
the Company or any such Subsidiary, or for securities exercisable
for or convertible into shares of equity securities of the
Company or any of its Subsidiaries (whether Company Common Stock
or otherwise) or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional
shares of such equity securities or securities exercisable for or
convertible into such equity securities (other than pursuant to a
PRO RATA distribution to all holders of Company Common Stock),
(3) shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of, in one transaction
or a series of transactions, to, from or with the Company or any
of its Subsidiaries or any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such a plan acting in such capacity,
13
assets (including securities) on terms and conditions less
favorable to the Company or such Subsidiary or plan than those
that could have been obtained in arm's-length negotiations with
an unaffiliated third party, other than pursuant to a transaction
described in Section 13(a), (4) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of, in one transaction or a series of transactions, to,
from or with the Company or any of the Company's Subsidiaries or
any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such a
plan acting in such capacity (other than transactions, if any,
consistent with those engaged in, as of the date hereof, by the
Company and such Acquiring Person or such Associate or
Affiliate), assets (including securities) having an aggregate
fair market value of more than $10,000,000, other than pursuant
to a transaction set forth in Section 13(a), (5) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series
of transactions, to, from or with the Company or any of its
Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such a plan acting in such capacity, any material
trademark or material service xxxx, other than pursuant to a
transaction set forth in Section 13(a), (6) shall receive, or any
designee, agent or representative of such Acquiring Person or any
Affiliate or Associate of such Acquiring Person shall receive,
any compensation from the Company or any of its Subsidiaries
other than compensation for full-time employment as a regular
employee at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (7) shall receive the benefit,
directly or indirectly (except proportionately as a holder of
Company Common Stock or as required by law or governmental
regulation), 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 any
employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such a
plan acting in such capacity; or
(D) 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 or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of transactions
involving the Company or any of its Subsidiaries, other than a
transaction or transactions to which the provisions of Section
13(a) apply (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 that is directly or
indirectly beneficially owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person;
THEN, immediately upon the date of the occurrence of an
event described in Section 11(a)(ii)(A)-(D) hereof (a "SECTION
11(A)(II) EVENT"), proper provision shall be made so that each
holder of a Right (except as provided below and in Section 7(e))
shall thereafter have the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of the number of Units for which a
Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event, such number of Units as shall equal
the result obtained by (x) multiplying the then current Purchase
Price by the then number of Units for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event (such product thereafter being, for all
purposes of this Agreement other than Section 13, the Purchase
14
Price), and (y) dividing that product by 50% of the then Current
Market Price (determined pursuant to Section 11(d)) per Unit on
the date of such first occurrence (such number of Units being the
"ADJUSTMENT UNITS"); PROVIDED, that the Purchase Price and the
number of Adjustment Units shall be further adjusted as provided
in this Agreement to reflect any Section 11(a)(ii) Event
occurring after the initial occurrence of a Section 11(a)(ii)
Event.
(iii) In the event that the number of shares of Preferred
Stock that are authorized by the Company's articles of incorporation
but not outstanding or reserved for issuance for purposes other than
upon exercise of the Rights is not sufficient to permit the exercise
in full of the Rights in accordance with Section 11(a)(ii), the Board,
acting by resolution (which resolution shall be effective only if it
is approved by a majority of the Continuing Directors), shall: (A)
determine the excess of (1) the value of the Adjustment Units issuable
upon the exercise of a Right (the "CURRENT VALUE") over (2) the
Purchase Price (such excess being the "SPREAD"), and (B) with respect
to each Right (subject to Section 7(e)), make adequate provision to
substitute for such Adjustment Units, upon payment of the applicable
Purchase Price, (1) Company Common Stock, (2) cash, (3) a reduction in
the Purchase Price, (4) other equity securities of the Company, (5)
debt securities of the Company, (6) other assets, or (7) any
combination of the foregoing, having an aggregate value equal to the
Current Value, where such aggregate value has been determined by a
majority of the Continuing Directors after receiving advice from a
nationally recognized investment banking firm selected by a majority
of the Continuing Directors which has not performed any services for
the Company or any Subsidiary of the Company in the prior five years;
PROVIDED, HOWEVER, that if pursuant to the introductory clause of this
Section 11(a)(iii) the Company shall have elected or been required to
deliver value pursuant to clause (B) above and shall not have made
adequate provision to deliver such value within 30 days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y)
the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "SECTION 11(A)(III) TRIGGER DATE"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Units (to
the extent available) and then, if necessary, cash (to the extent
available) and then, if necessary, debt securities, which Units and/or
cash and/or debt securities shall have an aggregate value equal to the
Spread. If the Board, acting by resolution (which resolution shall be
effective only if it is approved by a majority of Continuing
Directors), shall determine in good faith that it is likely that
sufficient additional shares of Preferred Stock could be authorized
for issuance upon exercise in full of the Rights, the 30-day period
set forth above may be extended to the extent necessary, but not more
than 90 days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek stockholder approval for the authorization of
such additional shares (such period, as it may be extended, the
"SUBSTITUTION PERIOD"). To the extent that the Company determines
that some action need be taken pursuant to the first sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section
7(e), that such action shall apply uniformly to all outstanding Rights
and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to the first sentence of this
Section 11(a)(iii) and to determine the value thereof. In the event
of any such suspension, the Company shall 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. For purposes of this Section
11(a)(iii), the value of a Unit shall be the current market price (as
determined pursuant to Section 11(d)) per Unit on the date of the
first occurrence of the Section 11(a)(iii) Trigger Date.
15
(b) In the event the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Company
Common Stock entitling them to subscribe for or purchase (for a period
expiring within 45 calendar days after such record date) shares (or
fractional shares) of Company Common Stock (or shares having
substantially the same rights, privileges and preferences as shares of
Company Common Stock ("EQUIVALENT COMPANY COMMON STOCK")) or
securities convertible into Company Common Stock or Equivalent Company
Common Stock at a price per share of Company Common Stock or per share
of Equivalent Company Common Stock (or having a conversion price per
share, if a security convertible into Company Common Stock or
Equivalent Company Common Stock) less than the Current Market Price
(as determined pursuant to Section 11(d)) per share of Company Common
Stock on such record date, then 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 sum of the number of shares of
Company Common Stock outstanding on such record date plus the number
of shares of Company Common Stock which the aggregate offering price
of the total number of shares of Company Common Stock and/or
Equivalent Company Common Stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the
denominator of which shall be the number of shares of Company Common
Stock outstanding on such record date plus the number of additional
shares of Company Common Stock and/or Equivalent Company Common Stock
to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible).
In the event such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash,
the value of such consideration shall be as determined in good faith
by a majority of the Continuing Directors, 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. Shares of
Company Common Stock owned by or held for the account of the Company
or any Subsidiary 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 the event the Company shall fix a record date for a
distribution to all holders of shares of Company Common Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend paid out of funds legally available therefor),
assets (other than a dividend payable in shares of Company Common
Stock, but including any dividend payable in stock other than Company
Common Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b)), then 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 Market Price (as
determined pursuant to Section 11(d)) per share of Company Common
Stock on such record date less the fair market value (as determined in
good faith by the Company, acting by resolution of its Board (which
resolution shall be effective only if it is approved by a majority of
the Continuing Directors) whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holder of the Rights) of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants distributable in respect of a share of Company
Common Stock, and the denominator of which shall be such Current
Market Price (as determined pursuant to Section 11(d)) per share of
Company Common Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to
16
be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"Current Market Price" per share of Company Common Stock or
Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such shares for the ten
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; PROVIDED, HOWEVER, that if prior
to the expiration of such ten Trading Day period the issuer
announces either (A) a dividend or distribution on such shares
payable in such shares or securities convertible into such shares
(other than the Rights), or (B) any subdivision, combination or
reclassification of such shares, then, following the ex-dividend
date for such dividend or the record date for such subdivision,
as the case may be, the "Current Market Price" shall be properly
adjusted to take into account such event. The closing price for
each day shall be, if the shares are listed and admitted to
trading on a national securities exchange, as reported in the
principal consolidated transaction reporting system with respect
to securities listed on the principal national securities
exchange on which such shares are listed or admitted to trading
or, if such shares are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq Stock Market
("NASDAQ") or such other system then in use, or, if on any such
date such shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in such shares selected
by a majority of the Continuing Directors. If on any such date
no market maker is making a market in such shares, the fair value
of such shares on such date as determined in good faith by a
majority of the Continuing Directors shall be used. If such
shares are not publicly held or not so listed or traded, "Current
Market Price" per share shall mean the fair value per share as
determined in good faith by a majority of the Continuing
Directors, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes. The term "TRADING DAY" shall mean, if such shares are
listed or admitted to trading on any national securities
exchange, a day on which the principal national securities
exchange on which such shares are listed or admitted to trading
is open for the transaction of business or, if such shares are
not so listed or admitted, a Business Day.
(ii) For the purpose of any computation hereunder, if the
Units or the Preferred Stock are actively publicly traded, the
"current market price" per Unit of Preferred Stock shall be
determined in the same manner as set forth above for Company
Common Stock in clause (i) of this Section 11(d) (other than the
fourth sentence thereof). If the Units or the Preferred Stock
are not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the "current market price"
per Unit shall be conclusively deemed to be the Current Market
Price per share of Company Common Stock. If neither Company
Common Stock nor Preferred Stock is publicly held or so listed or
traded, the "current market price" per Unit shall mean the fair
value per share as determined in good faith by the Company's
Board of Directors, 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.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
17
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one-thousandth of a share of Company Common
Stock or Common Stock or Unit, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years
from the date of the transaction which mandates such adjustment and
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any equity securities other than Units,
thereafter the number of such other shares so receivable upon exercise
of any Right and the Purchase Price thereof 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 Units
contained in Sections 11(a), (b), (c), (d), (e), (g), (h), (i), (j),
(k), (l) and (m), and the provisions of Sections 7, 9, 10, 13 and 14
with respect to Units shall apply on like terms to any such other
equity securities.
(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, that number of
Units (or other securities or amount of cash or combination thereof)
that may be acquired from time to time pursuant to this Agreement upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of Units (calculated to the nearest
one-thousandth of a Unit) obtained by (i) multiplying (x) the number
or amount of Units (or cash or other securities) issuable upon
exercise of 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 lieu of any
adjustment in the number of Units or other securities that may be
acquired upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for
that number of Units for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. The record date may be
the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be
at least ten days later than the date of such public announcement. If
Rights 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 Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the
18
option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates
held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled
after such adjustment. Rights Certificates to be so distributed shall
be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of
record of Rights Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Units issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per Unit and the number of Units which
were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the number of
Units 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 such
fully paid and non-assessable Units at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date of the Units and shares of other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Units and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment;
PROVIDED, HOWEVER, that the Company shall deliver to such holder a due
xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment a
majority of the Continuing Directors shall determine to be advisable
in order that any (i) consolidation or subdivision of the Company
Common Stock, (ii) issuance wholly for cash of any shares of Company
Common Stock at less than the Current Market Price, (iii) issuance
wholly for cash of shares of Company Common Stock or securities which
by their terms are convertible into or exchangeable for shares of
Company Common Stock, (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 Company Common Stock, shall not be
taxable to such holders or shall reduce the taxes payable by such
holders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o)),
(ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer),
in one transaction, or a series of transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one
19
or more transactions each of which complies with Section 11(o)), if
(x) at the time of or immediately after such consolidation, merger or
sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the Person which constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) shall
have distributed or otherwise transferred to its stockholders or other
persons holding an equity interest in such Person Rights previously
owned by such Person or any of its Affiliates and Associates;
PROVIDED, HOWEVER, this Section 11(n) shall not affect the ability of
any Subsidiary of the Company to consolidate with, merge with or into,
or sell or transfer assets or earning power to, any other Subsidiary
of the Company.
(o) After the Distribution Date, the Company shall not, except
as permitted by Section 23 or Section 26, take (or permit any
Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Rights
Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Company Common Stock
payable in shares of Company Common Stock, (ii) subdivide the
outstanding shares of Company Common Stock, (iii) combine the
outstanding shares of Company Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock in a
reclassification of Company Common Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), the number of
Rights associated with each share of Company Common Stock then
outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Company
Common Stock following any such event shall equal the result obtained
by multiplying the number of Rights associated with each share of
Company Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Company
Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares
of Company Common Stock outstanding immediately following the
occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or
Section 13, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Company Common Stock and the Preferred Stock, a copy
of such certificate, and mail a brief summary thereof to each holder of a
Rights Certificate (or, if prior to the Distribution Date, to each holder
of a certificate representing shares of Company Common Stock) in accordance
with Section 25. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained and shall not
be deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) In the event that, following the Stock Acquisition
Date or at a time when Continuing Directors constitute less than a majority
of the Company's Board of Directors, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)), and the Company shall not be the continuing or
20
surviving corporation of such consolidation or merger, (y) any Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving corporation
of such consolidation or merger and, in connection with such consolidation
or merger, all or part of the outstanding shares of Company Common Stock
shall be converted into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer) to any Person or Persons (other than the Company or any
of its Subsidiaries in one or more transactions each of which complies with
Section 11(o)), in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) (any such event being a "SECTION 13
EVENT"), then, and in each such case, proper provision shall be made so
that: (i) each holder of a Right, except as provided in Section 7(e),
shall thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price, such number of validly authorized and
issued, fully paid and non-assessable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), which shares shall
not be subject to any liens, encumbrances, rights of first refusal,
transfer restrictions or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by the
number of Units for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such Units for which a Right would be exercisable
hereunder but for the occurrence of such Section 11(a)(ii) Event by the
Purchase Price which would be in effect hereunder but for such first
occurrence) and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be the "PURCHASE PRICE" for all
purposes of this Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d)) per share of the Common Stock of such Principal
Party on the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation
of a sufficient number of shares of its Common Stock) in connection with
the consummation of any such transaction as may be necessary to ensure that
the provisions of this Agreement shall thereafter be applicable to its
shares of Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) shall be of no further
effect following the first occurrence of any Section 13 Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), (A) the Person that is the
issuer of any securities into which shares of Company Common Stock are
converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer of Common Stock that has the highest
aggregate Current Market Price (determined pursuant to Section 11(d))
and (B) if no securities are so issued, the Person that is the other
party to such merger or consolidation, or, if there is more than one
such Person, the Person the Common Stock of which has the highest
aggregate Current Market Price (determined pursuant to Section 11(d));
and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the largest 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 transferred pursuant
21
to such transaction or transactions or if the Person receiving the
largest portion of the assets or earning power cannot be determined,
whichever Person the Common Stock of which has the highest aggregate
Current Market Price (determined pursuant to Section 11(d));
PROVIDED, HOWEVER, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act
("REGISTERED COMMON STOCK"), or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person that has
Registered Common Stock outstanding, "Principal Party" shall refer to such
other Person; (2) if the Common Stock of such Person is not Registered
Common Stock or such Person is not a corporation, and such Person is a
direct or indirect Subsidiary of another Person but is not a direct or
indirect Subsidiary of another Person which has Registered Common Stock
outstanding, "Principal Party" shall refer to the ultimate parent entity of
such first-mentioned Person; (3) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such
Person is directly or indirectly controlled by more than one Person, and
one or more of such other Persons has Registered Common Stock outstanding,
"Principal Party" shall refer to whichever of such other Persons is the
issuer of the Registered Common Stock having the highest aggregate Current
Market Price (determined pursuant to Section 11(d)); and (4) if the Common
Stock of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by more
than one Person, and none of such other Persons have Registered Common
Stock outstanding, "Principal Party" shall refer to whichever ultimate
parent entity is the corporation having the greatest stockholders equity
or, if no such ultimate parent entity is a corporation, shall refer to
whichever ultimate parent entity is the entity having the greatest net
assets.
(c) The Company shall not consummate any Section 13 Event transfer
unless the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with
this Section 13, and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of
this Section 13 and further providing that the Principal Party, at its own
expense, will:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement
under the Securities Act with respect to the Common Stock that may be
acquired upon exercise of the Rights, (B) cause such registration
statement to remain effective (and to include a prospectus complying
with the requirements of the Securities Act) until the Expiration
Date, and (C) as soon as practicable following the execution of such
agreement, take such action as may be required to ensure that any
acquisition of such Common Stock upon the exercise of the Rights
complies with any applicable state security or "blue sky" laws; and
(ii) use its best efforts either (A) to list (or continue the
listing of) the Common Stock of the Principal Party on a national
securities exchange or (B) to cause such Common Stock to be reported
by NASDAQ or such other comparable transaction reporting system as may
then be in use; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
22
(d) If the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a 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, in connection with, or
as a consequence of, the consummation of a transaction referred to in this
Section 13, shares of Common Stock of such Principal Party at less than the
then Current Market Price per share (determined pursuant to Section 11(d))
or securities exercisable for, or convertible into, Common Stock of such
Principal Party at less than such then Current Market Price (other than to
holders of Rights pursuant to this Section 13) or (ii) providing for any
special payment, tax or similar provisions in connection with the issuance
of the Common Stock of such Principal Party pursuant to the provisions of
this Section 13; then, in such event, the Company 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 cancelled, 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 provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
(f) Notwithstanding anything in this Agreement to the contrary, the
provisions of this Section 13 shall not be applicable to a transaction
described in clause (x) or (y) of Section 13(a) (A) if such transaction is
consummated pursuant to and in accordance with a definitive agreement
approved by the Company's Board of Directors (including a majority of the
Continuing Directors) at a time when Continuing Directors constitute a
majority of the Board of Directors or (B) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Company Common
Stock pursuant to a Permitted Offer (or a wholly-owned Subsidiary of any
such Person or Persons), (ii) the price per share of Company Common Stock
being offered in such transaction is not less than the price per share of
Company Common Stock paid to all holders of Company Common Stock whose
shares were purchased pursuant to such Permitted Offer, and (iii) the form
of consideration being offered to the remaining holders of shares of
Company Common Stock pursuant to such transaction is the same as the form
of consideration paid to holders of the Company Common Stock pursuant to
such Permitted Offer.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the Persons to which such
fractional Rights would otherwise be issuable, an amount in cash equal to
such fraction of the market value of a whole Right. For purposes of this
Section 14(a), the market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be, if the Rights are listed or
admitted to trading on a national securities 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 price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such
other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Company (acting by resolution of its Board, which
resolution shall be effective only if it is approved by the Continuing
Directors). If on any such date no such market maker is making a market in
23
the Rights, the fair value of the Rights on such date as determined in good
faith by the Company (acting by resolution of its Board, which resolution
shall be effective only if it is approved by the Continuing Directors)
shall be used and such determination shall be described in a statement
filed with the Rights Agent and the holders of the Rights.
(b) The Company shall not be required to issue fractions of Units
upon exercise of the Rights or to distribute certificates which evidence
such fractional Units. In lieu of such fractional Units, the Company may
pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the then current market price of a Unit on the day of exercise,
determined in accordance with Section 11(d).
(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, except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights Agent
pursuant to Section 18, are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the
registered holders of certificates representing shares of Company Common
Stock); and any registered holder of a Rights Certificate (or, prior to the
Distribution Date, of a certificate representing shares of Company Common
Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company Common Stock), may, on his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company or any other Person to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy
at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any Person
subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS 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 by transfer of the shares of Company Common Stock in respect of which
those Rights were issued;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f), the Company and the
Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Company
Common Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Company Common
Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e), shall be affected by
any notice to the contrary; and
24
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or any other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
PROVIDED, HOWEVER, that the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as promptly as
practicable.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
Units or 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 Rights Certificate be construed to confer upon
the holder of any Rights 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, except
as provided in Section 24, to receive notice of meetings or other actions
affecting stockholders, or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered
by it hereunder and, from time to time, promptly following demand of the
Rights Agent, its reasonable expenses, including reasonable fees and
disbursements of its counsel, incurred in connection with the execution and
administration of this Agreement and the exercise and performance of its
duties hereunder. The Company shall indemnify the Rights Agent for, and
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 hereunder.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Rights Certificate or certificate for Preferred Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be
genuine and to have been signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons. Anything in this Agreement to
the contrary notwithstanding, in no event shall the Rights Agent be liable
for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stockholder services businesses 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
document or any further act on the part of any of the parties hereto;
PROVIDED, HOWEVER, that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21. In case at
the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been
25
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
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 Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel 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 (including, without limitation, the identity of any Acquiring Person
and the determination of "Current Market Price") be proved or established
by the Company prior to taking or suffering any action under this
Agreement, such fact or matter (unless other evidence in respect thereof be
specified herein) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or
any Assistant Secretary of the Company and delivered to the Rights Agent;
PROVIDED, HOWEVER, that so long as any Person is an Acquiring Person under
this Agreement, such certificate shall be signed and delivered by a
majority of the Continuing Directors; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable under this Agreement 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
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any responsibility for the
validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or for the validity or execution
of any Rights Certificate (except its countersignature thereof); nor shall
it be responsible for any breach by the Company of any covenant or failure
by the Company to satisfy conditions contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 or 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
26
exercise of Rights evidenced by Rights Certificates after receipt by the
Rights Agent of the certificate describing any such adjustment contemplated
by Section 12); nor shall it by any act under this Agreement be deemed to
make any representation or warranty as to the authorization or reservation
of any Units, shares of Preferred Stock or any other securities to be
issued pursuant to this Agreement or any Rights Certificate or as to
whether any Units or any other securities will, when so issued, be validly
authorized and issued, fully paid and non-assessable.
(f) The Company shall perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such
further acts, instruments and assurances as may reasonably be required by
the Rights Agent for the performance by the Rights Agent of its duties
under this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant
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 of any such officer; PROVIDED, HOWEVER, that so long as
any Person is an Acquiring Person under this Agreement, the Rights Agent
shall accept such instructions and advice only from a majority of the
Continuing Directors and shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with such
instructions of the majority of the Continuing Directors. Any application
by the Rights Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent under this Rights Agreement and the
date on and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than 5 Business Days after the
date any such officer of the Company actually receives such application,
unless any such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case
of an omission), the Rights Agent shall have received written instructions
in response to such application specifying the action to be taken or
omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company 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.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties or in the exercise of its rights
hereunder if the Rights Agent shall have reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed, not signed or indicates an affirmative response
to clause 1 and/or 2 thereof, the Rights Agent shall not take any further
27
action with respect to such requested exercise or transfer without first
consulting with the Company. If such certificate has been completed and
signed and shows a negative response to clauses 1 and 2 of such
certificate, unless previously instructed otherwise in writing by the
Company (which instructions may impose on the Rights Agent additional
ministerial responsibilities, but no discretionary responsibilities), the
Rights Agent may assume without further inquiry that the Rights Certificate
is not owned by a person described in Section 4(b) or Section 7(e) and
shall not be charged with any knowledge to the contrary.
(l) The Rights Agent shall have no duties or obligations other than
those specifically set forth in this Agreement, or as may subsequently be
agreed to in writing by the Company and the Rights Agent.
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' prior notice in writing mailed to the Company,
and to each transfer agent of the Company Common Stock and the Preferred
Stock, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' prior notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Company Common Stock and the Preferred Stock, by
registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or any
state of the United States in good standing, shall be authorized to do
business as a banking institution in the State of New York, shall be
authorized under such laws to exercise corporate trust or stock transfer
powers, shall be subject to supervision or examination by federal or state
authorities and shall have at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000 or (b) an Affiliate
of a corporation described in clause (a) of this sentence. 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 that 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 Company Common Stock and the Preferred Stock, and
mail a notice thereof in writing to the registered holders of the Rights
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.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by resolution of its Board (which
resolution shall be effective only if it is approved by a majority of
Continuing Directors) to reflect any adjustment or change made in
accordance with the provisions of this Agreement in the Purchase Price or
the number or kind or class of shares or other securities or property that
may be acquired under the Rights Certificates. In addition, in connection
with the issuance or sale of shares of Company Common Stock following the
Distribution Date and prior to the Expiration Date, the Company (a) shall,
with respect to shares of Company Common Stock so issued or sold pursuant
28
to the exercise of stock options or under any employee plan or arrangement,
or upon the exercise, conversion or exchange of securities hereinafter
issued by the Company, and (b) may, in any other case, if deemed necessary
or appropriate by a majority of the Continuing Directors, issue Rights
Certificates representing the appropriate number of Rights in connection
with such issuance or sale; PROVIDED, HOWEVER, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate
shall be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION. (a) The Company, acting by
resolution of its Board (which resolution shall be effective only if it is
approved by a majority of Continuing Directors and only if the Continuing
Directors constitute a majority of the number of directors then in office)
may, at its option, at any time prior to the earlier of (i) the
Distribution Date or (ii) the Final Expiration Date, redeem all but not
less than all of the then outstanding Rights at a redemption price of
$.0025 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 the "REDEMPTION PRICE"). The
Company may, at its option, pay the Redemption Price in cash, shares of
Company Common Stock (based on the Current Market Price (determined
pursuant to Section 11(d)) of the shares of Company Common Stock at the
time of redemption), or such other form of consideration as a majority of
the Continuing Directors deems appropriate.
(b) Immediately upon an action by the Board in accordance with
Section 23(a) ordering the redemption of the Rights, evidence of which
shall be filed with the Rights Agent, 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 for each Right so held. Promptly after the action of a
majority of the Continuing Directors ordering the redemption of the Rights,
the Company shall give notice of such redemption to the Rights Agent and
the holders of the then outstanding Rights by mailing such notice to all
such holders at each holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for Company Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made.
SECTION 24. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Company Common Stock or to
make any other distribution to the holders of Company Common Stock (other
than a regular quarterly cash dividend paid out of funds legally available
therefor), (ii) to offer to the holders of Company Common Stock rights or
warrants to subscribe for or to purchase any additional shares of Company
Common Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Company
Common Stock (other than a reclassification involving only the subdivision
of outstanding shares of Company Common Stock), (iv) to effect any
consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o)), or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)), or (v) 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 Rights
Certificate, to the extent feasible and in accordance with Section 25, a
notice of such proposed action, which shall specify the record date for the
29
purposes of such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Company Common Stock,
if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least 20 days
prior to the record date for determining holders of the shares of Company
Common Stock for purposes of such action, and in the case of any such other
action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the shares of
Company Common Stock whichever shall be the earlier; PROVIDED, HOWEVER, no
such notice shall be required pursuant to this Section 24, if any
Subsidiary of the Company effects a consolidation or merger with or into,
or effects a sale or other transfer of assets or earnings power to, any
other Subsidiary of the Company.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance
with Section 25, 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).
SECTION 25. NOTICES. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing
(including by telex, telegram or cable) and mailed or sent or delivered, if
to the Company, at its address at:
Duke Realty Investments, Inc.
0000 Xxxxxxxx Xxxxxxxx - Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: General Counsel
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
and if to the Rights Agent, at its address at:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Office of the General Counsel
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent
by first-class mail, postage-prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the
Company may by resolution of its Board (which resolution if adopted
following the Stock Acquisition Date shall be effective only if at the time
of its adoption Continuing Directors constitute a majority of the number of
directors then in office), 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 shares of Company
Common Stock. From and after the Distribution Date and subject to the
penultimate sentence of this Section 26, the Company may by resolution of
30
its Board (which resolution if adopted following the Stock Acquisition Date
shall be effective only if at the time of its adoption the Continuing
Directors constitute a majority of the number of directors then in office),
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, 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 Adverse Person or an Affiliate or
Associate of an Acquiring Person or an Adverse Person); PROVIDED, HOWEVER,
that this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) subject to Section 30, 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. Upon the
delivery of a certificate from an appropriate officer of the Company or, so
long as any Person is an Acquiring Person hereunder, from the majority of
the Continuing Directors 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. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Purchase Price, the
Expiration Date or the number of Units for which a Right is exercisable, or
which has the effect of exempting from any provision of this Agreement, or
of rendering any otherwise applicable provision of this Agreement
inapplicable to, any acquisition by any Person of Beneficial Ownership of
Company Common Stock or any transaction between any Person, on the one
hand, and the Company or any Subsidiary of or successor to the Company, on
the other hand, without in each such case the approval of a majority of the
Continuing Directors. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the
holders of Company Common Stock.
SECTION 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. For all purposes of this Agreement, any calculation of the number of
shares of Company Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Company Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the Exchange Act Regulations as in effect on the
date hereof. Except as otherwise specifically provided herein, the Board
(and, where specifically provided for herein, the Board and a majority of
the Continuing Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board (or, as expressly provided, the Board and
a majority of Continuing 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 (i) to interpret the provisions of
this Agreement, and (ii) to make all determinations deemed necessary or
advisable for the administration of this Agreement. All such actions,
calculations, interpretations and determinations (including, for purposes
of clause (y) below, all omissions with respect to the foregoing) which are
done or made by the Board or by a majority of the Continuing 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 any member thereof to any liability to the holders of
the Rights.
31
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to
the Distribution Date, registered holders of shares of Company Common
Stock) any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of
shares of Company Common Stock).
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; PROVIDED, HOWEVER, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and a majority of the Continuing Directors determines in its
good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement and the
Rights shall not then be redeemable, then the right of redemption set forth
in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth Business Day following the date of such
determination by a majority of the Continuing Directors.
SECTION 31. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued under this Agreement shall be governed by, and
construed in accordance with, the laws of the State of Indiana applicable
to contracts executed in and to be performed entirely in such State.
SECTION 32. COUNTERPARTS. This Agreement may be executed (including
by facsimile) in one or more counterparts, and by the different parties
hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute
one and the same instrument.
SECTION 33. CAPTIONS. The captions contained in this Agreement are
for descriptive purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
SECTION 34. EXCHANGE. (a) The Company may at any time prior to the
Distribution Date, upon resolution of the Board (which resolution shall be
effective only if at the time of its adoption Continuing Directors
constitute a majority of the number of directors then in office and a
majority of the Continuing Directors approve of such exchange), exchange
all or part of the then outstanding Rights (which shall not include Rights
that have become void pursuant to Section 7(e)) for shares of Company
Common Stock at an exchange ratio specified in the following sentence, as
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof. Subject to such
adjustment, each Right may be exchanged for that number of shares of
Company Common Stock obtained by dividing the Adjustment Spread (as defined
below) by the then Current Market Price (determined pursuant to Section
11(d)) per share of Company Common Stock on the earlier of (i) the Stock
Acquisition Date and (ii) the date on which a tender or exchange offer
(other than a Permitted Offer) by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such a plan acting in such capacity) is first published or sent or given
within the meaning of Rule 14d-4(a) of the Exchange Act Regulations or any
successor rule, if upon consummation thereof such Person would be the
Beneficial Owner of 15% or more of the shares of Company Common Stock then
outstanding (such exchange ratio being the "EXCHANGE RATIO"). The
"ADJUSTMENT SPREAD" shall equal (x) the aggregate market price on the date
32
of such event of the number of Adjustment Units determined pursuant to
Section 11(a)(ii), minus (y) the Purchase Price.
(b) Immediately upon the action of the Board, in accordance with
Section 34(a), ordering the exchange of any Rights and without any further
action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be
to receive that number of shares of Company Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange;
PROVIDED, HOWEVER, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange shall state the method by which the exchange of shares
of Company Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected PRO RATA based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 7(e)) held by each holder of Rights.
(c) In the event that the number of shares of Company Common Stock
which are authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance are not sufficient to permit any
exchange of Rights as contemplated in accordance with this Section 34, the
Company shall take all such action as may be necessary to authorize
additional shares of Company Common Stock for issuance upon exchange of the
Rights or make adequate provision to substitute (i) cash, (ii) debt
securities of the Company, (iii) other assets, or (iv) any combination of
the foregoing, having an aggregate value equal to the Adjustment Spread,
where such aggregate value has been determined by a majority of the
Continuing Directors.
(d) In connection with any exchange authorized pursuant to Section
34(a), the Company shall not be required to issue fractions of shares of
Company Common Stock or to distribute certificates which evidence
fractional shares. In lieu of fractional shares, the Company may pay to
the registered holders of Rights Certificates at the time such Rights are
exchanged as herein provided an amount in cash equal to the same fraction
of the Current Market Price (determined pursuant to Section 11(d)) of one
share of Company Common Stock.
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the date first above written.
DUKE REALTY INVESTMENTS, INC.
By:/s/ XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title:Vice President, General Counsel
and Secretary
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:/S/ XXXXXX X. XXXX
------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
34
EXHIBIT A
TO RIGHTS AGREEMENT
-------------------
[Form of Rights Certificate]
Certificate No. R-_________ __________ Rights
NOT EXERCISABLE AFTER JULY 23, 2008 OR EARLIER IF THE RIGHTS
EXPIRE UNDER CERTAIN CIRCUMSTANCES OR ARE REDEEMED OR EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.0025 PER RIGHT, ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ADVERSE
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN ADVERSE PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(E) OF SUCH AGREEMENT.]{*}
RIGHTS CERTIFICATE
DUKE REALTY INVESTMENTS, INC.
This certifies that ___________________________, or registered
assigns, is the registered holder of the number of Rights set forth above,
each of which entitles the registered holder thereof, subject to the terms
and conditions of the Rights Agreement, dated as of July 23, 1998 (the
"RIGHTS AGREEMENT"), between Duke Realty Investments, Inc., an Indiana
corporation (the "COMPANY"), and American Stock Transfer & Trust Company, a
national banking association, as Rights Agent (the "RIGHTS AGENT"), to
purchase from the Company at any time after the Distribution Date and prior
to the Expiration Date (each as defined in the Rights Agreement), at the
office of the Rights Agent, one one-thousandth of a fully paid and
non-assessable share of Series C Junior Preferred Stock, par value $.01
per share (the "PREFERRED STOCK"), of the Company at a purchase price (the
"PURCHASE PRICE") of $95.00, in cash, per one one-thousandth of a share
(each such one one-thousandth of a share of Preferred Stock being a
"UNIT"), upon presentation and surrender of this Rights Certificate with
the Election to Purchase and related certificate duly executed. In certain
circumstances described in the Rights Agreement, the Board may elect to
issue cash, assets or other equity or debt securities to the holder hereof
in lieu of Units. Capitalized terms used but not defined in this Rights
[FN]
{*} The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
A-1
Certificate that are defined in the Rights Agreement shall have the
meanings ascribed to them in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Adverse Person or an Affiliate or Associate of any
such Acquiring Person or Adverse Person, (ii) under certain circumstances
specified in the Rights Agreement, a transferee of any such Acquiring
Person or Adverse Person, or Associate or Affiliate of any such Acquiring
Person or Adverse Person, or (iii) under certain circumstances specified in
the Rights Agreement, a transferee of a person who, after such transfer,
became an Acquiring Person or an Adverse Person, or an Affiliate or
Associate of an Acquiring Person or an Adverse Person, such Rights shall
become null and void and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
THE NUMBER OF RIGHTS EVIDENCED BY THIS RIGHTS CERTIFICATE (AND THE
NUMBER OF UNITS WHICH MAY BE PURCHASED UPON EXERCISE THEREOF) SET FORTH
ABOVE, AND THE PURCHASE PRICE SET FORTH ABOVE, ARE SUBJECT TO MODIFICATION
AND ADJUSTMENT UPON THE OCCURRENCE OF CERTAIN EVENTS AS PROVIDED IN THE
RIGHTS AGREEMENT.
In certain circumstances, the Rights evidenced hereby may entitle the
registered holder thereof to purchase capital stock of an entity other than
the Company or receive common stock, cash or other assets, all as provided
in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates. Copies of the Rights Agreement are on file at the principal
office of the Company and are available from the Company upon written
request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing an aggregate number of
Rights equal to the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. If this Rights Certificate
shall be exercised in part, the registered holder shall be entitled to
receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, at any time prior
to the earlier of (i) the Stock Acquisition Date or (ii) the Final
Expiration Date, the Rights evidenced by this Certificate may be redeemed
by the Company, at its option, by resolution (which resolution shall, if
adopted following the Stock Acquisition Date, be effective only with the
approval of a majority of the Continuing Directors, and only if the
Continuing Directors constitute a majority of the number of directors then
in office) at a redemption price of $.0025 per Right, payable at the
Company's option in cash, common stock of the Company or other
consideration, subject to adjustment in certain events as provided in the
Rights Agreement.
No fractional Units 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 Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
Preferred Stock or of any other securities which may at any time be
A-2
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 Rights evidenced
by this Rights Certificate shall have been exercised as provided in the
Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
A-3
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of ____________, ____
ATTEST: DUKE REALTY INVESTMENTS, INC.
_________________________ By:______________________________
Name: Name:
Title: Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
By:______________________________
Authorized Signatory
A-4
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
___________________________________________________________________________
(Please print name of transferee)
___________________________________________________________________________
(Please print address of transferee)
this Rights evidenced by this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and
appoint __________________________________________________,
with full power of substitution, to transfer said Rights on the books of
the within-named Company.
Dated: ____________, ____
Signature:_____________________________________________
(Sign exactly as your name appears on the
other side of this Rights Certificate)
Signature Guarantee:______________________________
A-5
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person or an Adverse Person or an
Affiliate or Associate of any such Acquiring Person or Adverse Person (as
such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Adverse Person or an
Affiliate or Associate of an Acquiring Person or an Adverse Person.
Dated: ____________, ____
Signature:_____________________________________________
(Sign exactly as your name appears on the
other side of this Rights Certificate)
Signature Guarantee:______________________________
NOTICE
------
The signature to the foregoing Assignment and related Certificate must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
Signatures must be guaranteed by an approved eligible financial
institution acceptable to the Rights Agent in its sole discretion or by a
participant in the Securities Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or the New York Stock Exchange Medallion
Program.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Adverse Person or an
Affiliate or Associate thereof and, in the case of an Assignment, will
affix a legend to that effect on any Rights Certificates issued in exchange
for this Rights Certificate.
A-6
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise the Rights evidenced by this Rights Certificate)
To: DUKE REALTY INVESTMENTS, INC.
The undersigned hereby irrevocably elects to exercise ________________
Rights evidenced by this Rights Certificate to purchase the Units issuable
upon the exercise of the Rights (or such other securities, cash or property
of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such Units (or
such other securities which may be issuable upon the exercise of the
Rights) be issued in the name of and delivered to:
Please insert social security
or other identifying number:____________________
___________________________________________________________________________
(Please print name)
___________________________________________________________________________
___________________________________________________________________________
(Please print address)
If such number of Rights shall not be all of the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:____________________
___________________________________________________________________________
(Please print name)
___________________________________________________________________________
___________________________________________________________________________
(Please print address)
Dated: ____________, ____
Signature:_____________________________________________
(Sign exactly as your name appears on the
other side of this Rights Certificate)
Signature Guarantee:____________________
A-7
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not beneficially owned or being exercised by or on behalf of a
Person who is or was an Acquiring Person or an Adverse Person or an
Affiliate or Associate of any such Acquiring Person or Adverse Person (as
such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Adverse Person or an
Affiliate or Associate of an Acquiring Person or an Adverse Person.
Dated: ____________, ____
Signature:_____________________________________________
(Sign exactly as your name appears on the
other side of this Rights Certificate)
Signature Guarantee:____________________
NOTICE
------
The signature to the foregoing Election to Purchase and related
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
Signatures must be guaranteed by an approved eligible financial
institution acceptable to the Rights Agent in its sole discretion or by a
participant in the Security Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or the New York Stock Exchange Medallion
Signature Guarantee Program.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Adverse Person or an
Affiliate or Associate thereof and, in the case of an exercise of less than
all of the Rights evidenced by this Rights Certificate, will affix a legend
to that effect on any Rights Certificates issued for the balance of such
Rights in exchange for this Rights Certificate.
A-8
EXHIBIT B
TO RIGHTS AGREEMENT
-------------------
SUMMARY OF
RIGHTS TO PURCHASE PREFERRED STOCK
On July 23, 1998, the Board of Directors of Duke Realty Investments,
Inc. (the "COMPANY") declared a dividend of one right ("RIGHT") for each
outstanding share of the Company's Common Stock, par value $.01 per share
("COMPANY COMMON STOCK"), to stockholders of record at the close of
business on August 3, 1998 (the "RECORD DATE") and for each share of
Company Common Stock issued (including shares distributed from the
Company's treasury) by the Company thereafter and prior to the Distribution
Date (as defined below). Each Right entitles the registered holder,
subject to the terms of the Rights Agreement (as defined below), to
purchase from the Company one one-thousandth of a share (a "UNIT") of
Series C Junior Preferred Stock, par value $.01 per share ("PREFERRED
STOCK"), of the Company, at a purchase price of $95.00 per share, in cash
(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 American Stock Transfer & Trust Company, as Rights
Agent. In general, each Unit has substantially the same economic
attributes and carries substantially the same voting rights as one share of
Company Common Stock.
Copies of the Rights Agreement have been filed with the Securities and
Exchange Commission as exhibits to a Registration Statement on Form 8-A
dated July 31, 1998 (the "FORM 8-A") and are publicly available. Copies of
the Rights Agreement are also available free of charge from the Company.
This summary description of the Rights and the Preferred Stock does not
purport to be complete and is qualified in its entirety by reference to all
the provisions of the Rights Agreement and the Articles of Amendment
creating the Preferred Stock, including the definitions therein of certain
terms, which Rights Agreement and Articles of Amendment are incorporated
herein by reference.
DESCRIPTION OF THE RIGHTS
-------------------------
Initially, the Rights will attach to all certificates representing
shares of outstanding Company Common Stock, and no separate Rights
certificates will be distributed. The Rights will separate from the
Company Common Stock and the "DISTRIBUTION DATE" will occur upon the
earliest of (i) 10 business days following a public announcement (the date
of such announcement being the "STOCK ACQUISITION DATE") that (a) a person
or group of affiliated or associated persons (an "ACQUIRING PERSON") has
acquired, obtained the right to acquire, or otherwise obtained beneficial
ownership of 15% or more of the then outstanding shares of Company Common
Stock or (b) a majority of the Continuing Directors (as defined in the
Rights Agreement) of the Company has, in accordance with the criteria set
forth in the Rights Agreement, declared a person who beneficially owns at
least 10% of the then outstanding shares of Company Common Stock to be an
"ADVERSE PERSON," (ii) 10 business days (or such later date as may be
determined by action of a majority of the Continuing Directors prior to
such time) following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 15% or more of
the then outstanding shares of Company Common Stock (other than a tender or
exchange offer for all outstanding shares of Company Common Stock at a
price and on terms that a majority of the Continuing Directors (as defined
in the Rights Agreement) of the Company determines to be fair to and
otherwise in the best interests of the Company and its stockholders), and
(iii) the date on which it is publicly announced that a person or group has
acquired beneficial ownership of 40% or more of the then outstanding shares
of Company Common Stock. Until the Distribution Date, (i) the Rights will
B-1
be evidenced by Company Common Stock certificates and will be transferred
with and only with such Company Common Stock certificates, (ii) new Company
Common Stock certificates issued after the Record Date (including shares
distributed from the Company's treasury) will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates evidencing outstanding Company Common Stock
will also constitute the transfer of the Rights associated with the Company
Common Stock evidenced by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on July 23, 2008 unless the Rights are
earlier redeemed or exchanged by the Company.
As soon as practicable after the Distribution Date, separate
Certificates evidencing the Rights ("RIGHTS CERTIFICATES") will be mailed
to holders of record of Company Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights Certificates
alone will represent the Rights.
In the event (a "FLIP-IN EVENT") that (i) a person becomes an
Acquiring Person (other than pursuant to a Flip-Over Event (as defined
below)), (ii) a majority of the Continuing Directors of the Company
declares a person to be an Adverse Person, (iii) the Company is the
surviving corporation in a merger with an Acquiring Person and shares of
Company Common Stock shall remain outstanding, (iv) an Acquiring Person or
an Adverse Person engages in one or more "self-dealing" transactions
specified in the Rights Agreement, or (v) during such time as there is an
Acquiring Person or an Adverse Person, an event occurs which results in
such Acquiring Person's or Adverse Person's ownership interest being
increased by more than 1% (E.G., by means of a reverse stock split or
recapitalization), THEN, in each such case, each holder of a Right will
thereafter have the right to receive, upon exercise, Units (or, in certain
circumstances, cash, property or other securities of the Company) having a
value equal to two times the exercise price of the Right. The exercise
price is the Purchase Price multiplied by the number of Units issuable upon
exercise of a Right prior to the Flip-In Event. Notwithstanding the
foregoing, following the occurrence of any Flip-In Event all Rights that
are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person or Adverse Person (or by
certain related parties) will be null and void.
For example, at an exercise price of $100.00 per Right, each Right not
owned by an Acquiring Person or an Adverse Person (or by certain related
parties) following a Flip-In Event would entitle its holder to purchase
$200.00 worth of Units (or other consideration, as noted above), based upon
its then current market price (determined based upon the market price of
the Company Common Stock), for $100.00. Assuming that the Company Common
Stock had a current market price of $50.00 per share at such time, the
holder of each valid Right would be entitled to purchase 4 Units of
Preferred Stock for $100.00.
In the event (a "FLIP-OVER EVENT") that, at any time following the
Stock Acquisition Date or at a time when Continuing Directors constitute
less than a majority of the Company's Board of Directors, (i) the Company
is acquired in a merger or other business combination transaction and the
Company is not the surviving corporation, (ii) any person consolidates or
merges with the Company and all or part of the Company Common Stock is
converted or exchanged for securities, cash or property of any other
Person, or (iii) 50% or more of the Company's assets or earning power is
sold or transferred, THEN, in each such case, each holder of a Right
(except Rights which previously have been voided as described above) shall
thereafter have the right to receive, upon exercise, common stock of the
Acquiring Person or Adverse Person having a value equal to two times the
exercise price of the Right.
B-2
The Purchase Price payable, and the number of Units issuable, upon
exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Company Common Stock, (ii) if
holders of the Company Common Stock are granted certain rights or warrants
to subscribe for Company Common Stock or convertible securities at less
than the current market price of the Company Common Stock, or (iii) upon
the distribution to the holders of the Company Common Stock of evidences of
indebtedness, cash or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units of Company
Common Stock. In lieu thereof, an adjustment in cash may be made based on
the market price of the Company Common Stock prior to the date of exercise.
At any time prior to the Distribution Date, a majority of the
Continuing Directors of the Company may redeem the Rights in whole, but not
in part, at a price of $.0025 per Right (the "REDEMPTION PRICE"), subject
to adjustment in certain events, payable, at the election of such majority
of the Continuing Directors, in cash, shares of Company Common Stock or
such other form of consideration as the Continuing Directors may determine.
Immediately upon effectiveness of the action of a majority of Continuing
Directors ordering the redemption of the Rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the
Redemption Price.
At any time prior to the Distribution Date, the Company may exchange
the Rights (other than Rights owned by an Acquiring Person or an Adverse
Person, or an affiliate or an associate of an Acquiring Person or an
Adverse Person, which will have become void), in whole or in part, for
shares of Company Common Stock at an exchange ratio determined as provided
in the Rights Agreement.
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. Following exercise, the holder's
rights will be determined by the type of consideration received upon the
exercise. Although the distribution of the Rights should 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 Units (or other consideration) or are exchanged as provided
in the preceding paragraph.
The provisions of the Rights Agreement may be amended without the
approval of the holders of Company Common Stock at any time prior to the
Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring Person or
Adverse Person), or to shorten or lengthen any time period under the Rights
Agreement; PROVIDED, HOWEVER, that no amendment to adjust the time period
governing redemption may be made after the Rights are no longer redeemable.
B-3
EXHIBIT C
TO RIGHTS AGREEMENT
-------------------
FORM OF
ARTICLES OF AMENDMENT
OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
DUKE REALTY INVESTMENTS, INC.
The undersigned officer of DUKE REALTY INVESTMENTS, INC. (the
"CORPORATION"), existing pursuant to the provisions of INDIANA BUSINESS
CORPORATION LAW (IND. CODE 23-1 ET SEQ.), AS AMENDED (the "ACT")
and desiring to give notice of corporate action effectuating amendment of
certain provisions of its Amended and Restated Articles of Incorporation
certify the following facts:
ARTICLE I - AMENDMENT
SECTION 1:The date of incorporation of the Corporation is:
MARCH 12, 1992
SECTION 2:The name of the Corporation following this amendment of its Amended
and Restated Articles of Incorporation is:
DUKE REALTY INVESTMENTS, INC.
SECTION 3:The exact text to Article VI of the Amended and Restated Articles of
Incorporation is amended to add Section 6.07 as follows:
SEE ATTACHED EXHIBIT A
This Amendment is to be effective at 12:01 a.m. on August __, 1998.
ARTICLE II - MANNER OF ADOPTION AND VOTE
SECTION 1:Action by Directors:
The Board of Directors of the Corporation duly adopted resolutions amending
Article VI of the Amended and Restated Articles of Incorporation. These
resolutions were adopted at a meeting duly held on July 23, 1998 at which a
quorum was present.
SECTION 2:Action by Shareholders:
Pursuant to I.C. 23-1-25-2(d), the Shareholders of the Corporation were not
required to vote with respect to this amendment to the Amended and Restated
Articles of Incorporation.
SECTION 3:Compliance with legal requirements:
The manner of the adoption of the Articles of Amendment and the vote by which
they were adopted constitute full legal compliance with the provisions of the
Act, the Amended and Restated Articles of Incorporation, and the By-Laws of
the Corporation.
C-1
I hereby verify, subject to penalties for perjury, that the facts contained
herein are true this ____ day of August, 1998.
__________________________________________________
Name:
Title:
C-2
FORM OF
EXHIBIT A
---------
6.07 SERIES C PREFERRED STOCK. Pursuant to authority granted under
Section 6.01 of the Corporation's Amended and Restated Articles of
Incorporation (the "ARTICLES OF INCORPORATION"), the Board of Directors of
the Corporation hereby establishes a series of preferred shares designated
the Series C Junior Preferred Units ($0.01 par value per share) (the
"SERIES C PREFERRED STOCK") on the following terms:
(a) NUMBER. The number of shares constituting the Series C
Preferred Stock shall initially be 500,000, subject to increase or decrease
by the Board of Directors effectuated by further Articles of Amendment;
PROVIDED, HOWEVER, that no decrease shall reduce the number of shares of
Series C Preferred Stock to a number less than that of the shares then
outstanding plus the number of shares of Series C Preferred Stock issuable
upon exercise of outstanding rights, options or warrants or upon conversion
of outstanding securities issued by the Corporation.
(b) DIVIDENDS AND DISTRIBUTIONS.
(1) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and superior
to the shares of Series C Preferred Stock with respect to dividends, each
holder of one one-thousandth (1/1,000) of a share (a "UNIT") of Series C
Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for that purpose,
quarterly dividends payable in cash to holders of record on the last
business day of March, June, September and December in each year (each such
date being referred to herein as a "QUARTERLY DIVIDEND PAYMENT DATE"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a Unit of Series C Preferred Stock, in an amount per Unit
(rounded to the nearest cent) equal to the greater of (a) $.001 or (b)
subject to the provision for adjustment hereinafter set forth, the
aggregate per share amount of all cash dividends declared on shares of the
common stock, par value $.01 per share, of the Company (the "COMMON STOCK")
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of a Unit of Series C Preferred Stock, and (ii) subject to the
provision for adjustment hereinafter set forth, quarterly distributions
(payable in kind) on each Quarterly Dividend Payment Date in an amount per
Unit equal to the aggregate per share amount of all non-cash dividends or
other distributions declared on shares of Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or with respect to
the first Quarterly Dividend Payment Date, since the first issuance of a
Unit. In the event the Corporation shall at any time following August 3,
1998 (the "RIGHTS DECLARATION DATE") (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of
Units of Series C Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying each such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(2) The Corporation shall declare a dividend or
distribution on Units of the Series C Preferred Stock as provided in
paragraph (A) above at the time it declares a dividend or distribution on
the Common Stock; PROVIDED, HOWEVER, that in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $.001 per Unit on the Series
C-3
C Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(3) No dividend or distribution shall be paid or payable to
the holders of shares of Common Stock unless, prior thereto, all accrued
but unpaid dividends to the date of such dividend or distribution shall
have been paid to the holders of Units of Series C Preferred Stock.
(4) Dividends shall begin to accrue and be cumulative on
each outstanding Unit from the Quarterly Dividend Payment Date next
preceding the date of issue of such Unit, unless the date of issue of such
Unit is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such Unit shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of Units of Series C Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on Units in an amount
less than the total amount of such dividends at the time accrued and
payable on such Units shall be allocated PRO RATA on a Unit-by-Unit basis
among all such Units at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of Units entitled to
receive payment of a dividend or distribution declared thereon, which
record date shall be no more than 60 days prior to the date fixed for the
payment thereof.
(c) VOTING RIGHTS. The holders of Units shall have the
following voting rights:
(1) Subject to the provision for adjustment hereinafter set
forth, each Unit shall entitle the holder thereof to one vote on all
matters submitted to a vote of the stockholders of the Corporation. In the
event the Corporation shall at any time following the Rights Dividend
Declaration Date (i) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common
Stock or (iii) combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares, then in each such case the number of
votes per share to which holders of Units were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(2) Except as otherwise provided herein or by law, the
holders of Units and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(3) (i) Whenever, at any time or times, dividends payable
on any Unit or Units shall be in arrears in an amount equal to at least two
full quarterly dividends (whether or not declared and whether or not
consecutive), the number of Directors then constituting the entire Board of
Directors of the Corporation shall automatically be increased by 2 and the
holders of record of the outstanding Units and holders of any other shares
of Preferred Stock of the Corporation ranking on a parity with the Series C
Preferred Stock shall have the exclusive right, voting together as a single
class, to elect two directors of the Corporation at a special meeting of
stockholders of the Corporation to fill such newly-created directorships.
At elections for such directors, the holders of Units shall be entitled to
cast one vote for each Unit held.
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(ii) So long as any Units are outstanding, the number
of Directors of the Corporation shall at all times be such that the
exercise, by the holders of shares of Series C Preferred Stock and the
holders of shares of Preferred Stock on a parity therewith, of the right to
elect Directors under the circumstances provided in paragraph (iii) of this
subclause (C) will not contravene any provision of the Indiana Business
Corporation Law or the Articles of Incorporation of the Corporation. Any
director elected by holders of Units pursuant to this Section may be
removed at any annual or special meeting, by vote of a majority of the
stockholders who elected such director voting as a class, with or without
cause. In case any vacancy shall occur among the directors elected by the
holders of Units pursuant to this Section, such vacancy may be filled by
the remaining director so elected, or his successor then in office, and the
director so elected to fill such vacancy shall serve until the next meeting
of stockholders for the election of directors. After the holders of Units
shall have exercised their right to elect directors in any default period
and during the continuance of such period, the number of directors shall
not be further increased or decreased except by vote of the holders of
Units as herein provided or pursuant to the rights of any equity securities
ranking senior to or PARI PASSU with the Series C Preferred Stock.
(iii) The right of the holders of Units, voting
separately as a class, to elect two members of the Board of Directors of
the Corporation as aforesaid shall continue until, and only until, such
time as all arrears in dividends (whether or not declared) on the Units
shall have been paid or declared and set apart for payment, at which time
such right shall terminate, except as herein or by law expressly provided,
subject to reinvesting in the event of each and every subsequent default of
the character above-mentioned. Upon any termination of the right of the
holders of the Units as a class to vote for directors as herein provided,
the term of office of all directors then in office elected by the holders
of Units pursuant to this Section shall terminate immediately. Whenever
the term of office of the directors elected by the holders of Units
pursuant to this Section shall terminate and the special voting powers
vested in the holders of the Preferred Stock pursuant to this Section shall
have expired, the maximum number of members of the Board of Directors of
the Corporation shall be such number as may be provided for in the By-laws
of the Corporation, irrespective of any increase made pursuant to the
provisions of this Section.
(4) Except as set forth herein, holders of Units shall have
no special voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
(d) CERTAIN RESTRICTIONS.
(1) Whenever quarterly dividends or other dividends or
distributions payable on the Units as provided in herein are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on outstanding Units outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series C Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series C
Preferred Stock, except dividends paid ratably on the Units and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such Units and all such
shares are then entitled;
C-5
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series C
Preferred Stock; PROVIDED, HOWEVER, that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the
Series C Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any Units, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such Units, upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective
series or classes.
(2) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any Units or
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section, purchase or otherwise acquire such Units or
shares at such time and in such manner.
(e) REACQUIRED UNITS. Any Units purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such Units shall, upon their
cancellation, become authorized but unissued fractional shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
(f) LIQUIDATION, DISSOLUTION OR WINDING UP.
(1) Upon any voluntary liquidation, dissolution or winding
up of the Company, no distribution shall be made (i) to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Preferred Stock unless, prior
thereto, the holders of Units shall have received $1.00 per Unit, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "SERIES C
LIQUIDATION PREFERENCE"), or (ii) to the holders of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series C Preferred Stock, except distributions made ratably on
the Series C Preferred Stock and all other such parity stock in proportion
to the total amounts to which the holders of all such shares are entitled
upon such liquidation, dissolution or winding up. Thereafter, the holders
of Units shall be entitled to receive an aggregate amount per Unit, subject
to the provision for adjustment hereinafter set forth, equal to the
aggregate amount to be distributed per share to the holders of Common
Stock. In the event the Company shall at any time after the date hereof
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation or the
outstanding shares of Common Stock (by reclassification or otherwise) into
a greater or lesser number of shares of Common Stock, then in each such
case the aggregate amount to which holders of Units were entitled
immediately prior to such event under the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(2) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series C Liquidation
Preference and the liquidation preferences of all other series of Preferred
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Stock, if any, which rank on a parity with the Series C Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective liquidation
preferences.
(g) CONSOLIDATION, MERGER, ETC. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or converted into other stock
or securities, cash and/or any other property, then in any such case the
Units shall at the same time be similarly exchanged for or converted into
an amount per Unit (subject to the provision for adjustment hereinafter set
forth) equal to the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is converted or exchanged. In the event
the Company shall at any time (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or conversion of Units shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(h) REDEMPTION. The Units shall not be redeemable by the
Company; PROVIDED, HOWEVER, that the foregoing shall not limit the ability
of the Company to purchase or otherwise deal in such Units to the extent
otherwise permitted hereby and by law.
(i) RANKING. The Series C Preferred Stock shall rank junior to
all other series of the Company's Preferred Stock (whether with or without
par value) as to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise.
(j) AMENDMENT. Neither these Articles of Amendment nor the
Articles of Incorporation of the Company may be amended in any manner which
would materially alter or change the powers, preferences or special rights
of the Series C Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
Units, voting separately as a class.
(k) FRACTIONAL SHARES. Series C Preferred Stock may be issued
in Units or other fractions of a share, which Units or fractions shall
entitle the holder, in proportion to such holder's Units or fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of
Series C Preferred Stock."
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