EXECUTION COPY
PERSONNEL GROUP OF AMERICA, INC.
And
WACHOVIA BANK, NATIONAL ASSOCIATION
Rights Agent
Amended and Restated Rights Agreement
Dated as of April 14, 2003
TABLE OF CONTENTS
Section 1. Certain Definitions..................................................... 2
Section 2. Appointment of Rights Agent............................................. 11
Section 3. Issuance of Rights Certificates......................................... 11
Section 4. Form of Rights Certificates............................................. 14
Section 5. Countersignature and Registration....................................... 15
Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates................ 16
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights........... 18
Section 8. Cancellation and Destruction of Rights Certificates..................... 21
Section 9. Reservation and Availability of Capital Stock........................... 22
Section 10. Preferred Stock Record Date............................................. 24
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights.................................................................. 25
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.............. 39
Section 13. Consolidation, Merger or Sale or Transfer of Assets Cash Flow or Earning
Power................................................................... 39
Section 14. Fractional Rights and Fractional Shares................................. 43
Section 15. Rights of Action........................................................ 45
Section 16. Agreement of Rights Holders............................................. 46
Section 17. Rights Certificate Holder Not Deemed a Stockholder...................... 47
Section 18. Concerning the Rights Agent............................................. 47
Section 19. Merger or Consolidation or Change of Name of Rights Agent............... 48
Section 20. Duties of Rights Agent.................................................. 49
Section 21. Change of Rights Agent.................................................. 00
-x-
Xxxxxxx 00. Xxxxxxxx of New Rights Certificates..................................... 54
Section 23. Redemption and Termination.............................................. 55
Section 24. Exchange................................................................ 60
Section 25. Permitted Transfers..................................................... 62
Section 26. Notice of Certain Events................................................ 65
Section 27. Notices................................................................. 67
Section 28. Supplements and Amendments.............................................. 68
Section 29. Successors.............................................................. 69
Section 30. Determinations and Actions by the Board of Directors, etc............... 69
Section 31. Benefits of this Agreement.............................................. 70
Section 32. Severability............................................................ 71
Section 33. Governing Law........................................................... 71
Section 34. Counterparts............................................................ 71
Section 35. Descriptive Headings.................................................... 72
-ii-
EXHIBITS
Exhibit A - Form of Certificate of Designation, Preferences and Rights
Exhibit B - Form of Rights Certificates
Exhibit C - Form of Summary of Rights
-iii-
AMENDED AND RESTATED RIGHTS AGREEMENT
This AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of April 14, 2003
(the "Agreement"), between Personnel Group of America, Inc., a Delaware
corporation (the "Company"), and Wachovia Bank, National Association (formerly
known as First Union National Bank), a national banking corporation (the "Rights
Agent"), amends and restates the Rights Agreement, dated as of February 6, 1996
(the "1996 Rights Agreement") between the Company and the First National Bank of
Boston as amended by the First Amendment to Rights Agreement, dated as of
December 13, 2001 and the Second Amendment to Rights Agreement, dated as of
March 14, 2003 (the 1996 Rights Agreement, as so amended, the "Original Rights
Agreement").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and
declared (such declaration date, the "Rights Dividend Declaration Date") a
dividend distribution of one Right (as hereinafter defined) for each share of
common stock, par value $0.01 per share, of the Company (the "Common Stock")
outstanding at the close of business on February 27, 1996 (the "Record Date"),
each Right initially representing the right to purchase one one-hundredth of a
share of Series A Junior Participating Preferred Stock of the Company having the
rights, powers and preferences set forth in the form of Certificate of
Designation, Preferences and Rights attached hereto as Exhibit A, upon the terms
and subject to the conditions hereinafter set forth (the "Rights"), and has
further authorized the issuance of one Right (as such number may hereinafter be
adjusted pursuant to the provisions of Section 11(p) hereof) for each share of
Common Stock of the Company issued between the Record Date (whether originally
issued or
1
delivered from the Company's treasury) and the earlier of the Distribution Date
(as hereinafter defined) and the Expiration Date (as hereinafter defined) and,
to the extent provided in Section 22 hereof, with respect to each share of
Common Stock that shall become outstanding after the Distribution Date and prior
to the Expiration Date;
WHEREAS, the Company desires to amend and restate the Rights Agreement
in accordance with Section 27 of the Original Rights Agreement for the purpose
of effecting certain modifications contemplated by the Restructuring Agreement,
by and among the Company, MatlinPatterson Global Opportunities Partners L.P.,
Inland Partners, L.P., Links Partners, L.P. and certain other Noteholders, dated
as of March 14, 2003, as well as certain other changes deemed necessary or
appropriate by the Board of Directors of the Company;
WHEREAS, the Board of Directors of the Company has adopted resolutions
providing for the amendment and restatement of the Original Rights Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean (x) any Person
who or which, together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company, or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan, (iv) any Permitted Holder
or Permitted Holder Transferee (as such terms are hereinafter defined), (v) any
Person who becomes the
-2-
Beneficial Owner of fifteen percent (15%) or more of the shares of Common Stock
then outstanding as a result of a reduction in the number of shares of Common
Stock outstanding due to the repurchase of shares of Common Stock by the Company
other than during the Special Period (as defined in Section 23(c) hereof) or at
a time when the Rights are not redeemable, unless and until such Person, after
becoming aware that such Person has become the Beneficial Owner of fifteen
percent (15%) or more of the then outstanding shares of Common Stock, acquires
beneficial ownership of additional shares of Common Stock representing one
percent (1%) or more of the shares of Common Stock then outstanding, or (vi) any
such Person who has reported or is required to report such ownership (but less
than 20%) on Schedule 13G under the Exchange Act (or any comparable or successor
report) or on Schedule 13D under the Exchange Act (or any comparable or
successor report) which Schedule 13D does not state any intention to or reserve
the right to control or influence the management or policies of the Company or
engage in any of the actions specified in Item 4 of such schedule (other than
the disposition of the Common Stock) and, within 10 Business Days of being
requested by the Company to advise it regarding the same, certifies to the
Company that such Person acquired shares of Common Stock in excess of 14.9%
inadvertently or without knowledge of the terms of the Rights and who or which,
together with all Affiliates and Associates, thereafter does not acquire
additional shares of Common Stock while the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding; provided, however, that if the
Person requested to so certify fails to do so within 10 Business Days, then such
Person shall become an Acquiring Person immediately after such 10-Business-Day
period, and (y) any Person who or which during the Special Period or at a time
when the Rights are not redeemable has entered into any agreement or arrangement
with the
-3-
Company or any Subsidiary of the Company providing for an Acquisition
Transaction (as defined in Section 1(b) hereof).
(b) "Acquisition Transaction" shall mean (i) a merger,
consolidation or similar transaction involving the Company or any of its
Subsidiaries as a result of which stockholders of the Company will no longer own
a majority of the outstanding shares of Common Stock of the Company or a
publicly traded entity which controls the Company or, if appropriate, the entity
into which the Company may be merged, consolidated or otherwise combined with
(based solely on the shares of Common Stock received or retained by such
stockholders, in their capacity as stockholders of the Company, pursuant to such
transaction), (ii) a purchase or other acquisition of all or a substantial
portion of the assets of the Company and its Subsidiaries, or (iii) a purchase
or other acquisition of securities representing 15% or more of the shares of
Common Stock then outstanding.
(c) "Act" shall mean the Securities Act of 1933, as
amended.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(e) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, other rights, warrants or options,
or otherwise;
-4-
provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (A) securities tendered pursuant
to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a Triggering
Event (as hereinafter defined), or (C) securities issuable 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 (as hereinafter
defined) or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection
with an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to vote
or dispose of or has "beneficial ownership" of (as determined pursuant
to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report); or
-5-
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof)
with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (d)) or disposing of any voting
securities of the Company; provided, however, that nothing in this
paragraph (d) shall cause a Person engaged in business as an
underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition, and then
only if such securities continue to be owned by such Person at such
expiration of forty days and provided further, however, that any
stockholder of the Company, with affiliate(s), associate(s) or other
person(s) who may be deemed representatives of it serving as
director(s) of the Company, shall not be deemed to beneficially own
securities held by other Persons solely as a result of (i) persons
affiliated or otherwise associated with such stockholder serving as
directors or taking any action in connection therewith, (ii) discussing
the status of its shares with the Company or other stockholders of the
Company similarly situated or (iii) voting or acting in a manner
similar to other stockholders similarly situated, absent a specific
finding by the Board of Directors of an express agreement among such
stockholders to act in concert with one another as stockholders so as
to cause, in the good faith judgment of the Board of Directors, each
such stockholder to be the Beneficial Owner of the shares held by the
other stockholder(s). For purposes of this Agreement, in determining
the percentage of the
-6-
outstanding shares of Common Stock with respect to which a Person is a
Beneficial Owner, all shares as to which such Person is deemed the
Beneficial Owner shall be deemed outstanding.
(f) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of New York
or the State of North Carolina are authorized or obligated by law or executive
order to close.
(g) "Close of business" on any given date shall mean 5:00
P.M., Charlotte, North Carolina time, on such date; provided, however, that if
such date is not a Business Day, it shall mean 5:00 P.M., Charlotte North
Carolina time, on the next succeeding Business Day.
(h) "Common Stock" shall mean the common stock, par value
$0.01 per share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock of
such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person.
(i) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(j) "Current Market Price" shall have the meaning set
forth in Section 11(d)(i) hereof.
(k) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth
in Section 3(a) hereof.
-7-
(m) "Equivalent Preferred Stock" shall have the meaning
set forth in Section 11(b) hereof.
(n) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(o) "Exchange Ratio" shall have the meaning set forth in
Section 24 hereof.
(p) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(r) "Permitted Holder" shall mean any Person who as of
the closing date of the Restructuring Agreement either individually or together
with its Affiliates is the Beneficial Owner of 15% or more of the shares of
Common Stock outstanding, any Affiliate of such Person, and any Person who shall
become a Significant Holder pursuant to a transaction that complies with the
provisions of the form of Restated Certificate of Incorporation of the Company
set forth as Exhibit D hereto and Section 25(b) hereof.
(s) "Permitted Transferee" shall mean any Person who
shall become the Beneficial Owner of 15% or more of the shares of Common Stock
outstanding as a result of an acquisition of Common Stock pursuant to a transfer
by a Permitted Holder that satisfies the requirements for a "Permitted Transfer"
set forth in Section 25 hereof, in each case to the extent such provisions are
applicable, and any Affiliate of such Person.
(t) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
-8-
(u) "Preferred Stock" shall mean shares of Series A
Junior Participating Preferred Stock, par value $0.01 per share, of the Company,
and, to the extent that there are not a sufficient number of shares of Series A
Junior Participating Preferred Stock authorized to permit the full exercise of
the Rights, any other series of preferred stock of the Company designated for
such purpose containing terms substantially similar to the terms of the Series A
Junior Participating Preferred Stock.
(v) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(w) "Purchase Price" shall have the meaning set forth in
Section 4(a)(ii) hereof.
(x) "Qualified Offer" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(y) "Record Date" shall have the meaning set forth in the
preamble of this Agreement.
(z) "Rights" shall have the meaning set forth in the
preamble of this Agreement.
(aa) "Rights Agent" shall have the meaning set forth in
the preamble of this Agreement.
(bb) "Rights Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(cc) "Rights Dividend Declaration Date" shall have the
meaning set forth in the preamble of this Agreement.
-9-
(dd) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(ee) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(ff) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(gg) "Stock Acquisition Date" shall mean the earlier of
(i) the first date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed or amended
pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such pursuant to clause (x) of the
definition of Acquiring Person, and (ii) the date that an Acquiring Person has
become such pursuant to clause (y) of the definition of Acquiring Person.
(hh) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities sufficient to
elect at least a majority of the directors of such corporation is beneficially
owned, directly or indirectly, by such Person, or otherwise controlled by such
Person.
(ii) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(jj) "Summary of Rights" shall have the meaning set forth
in Section 3(b) hereof.
(kk) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
-10-
(ll) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-rights agents as it may deem necessary or
desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the close of business on the
tenth Business Day after the Stock Acquisition Date (or, if the tenth Business
Day after the Stock Acquisition Date occurs before the Record Date, the close of
business on the Record Date), or (ii) the close of business on the tenth
Business Day (or such later date as the Board shall determine, provided,
however, that no deferral of a Distribution Date by the Board pursuant to this
clause (ii) may be made at any time during the Special Period) after the date
that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if upon consummation
thereof, such Person would become an Acquiring Person (the earlier of (i) and
(ii) being herein referred to as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of paragraph (b) and (c) of this Section
3) by the certificates for the Common Stock registered in the names of the
holders of the Common
-11-
Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of 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 the 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 of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section
11(p) hereof, at the time of distribution of the Rights Certificates, the
Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) 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) The Company will make available, as promptly as
practicable following the Record Date, a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights") to
any holder of Rights who may so request from time to time prior to the
Expiration Date. With respect to certificates for the Common Stock outstanding
as of the Record Date, or issued subsequent to the Record Date, unless and until
the Distribution Date shall occur, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common Stock
shall also be the registered holders of the associated Rights. Until the earlier
of the Distribution Date or the Expiration Date (as such term
-12-
is defined in Section 7(a) hereof), the transfer of any certificates
representing shares of Common Stock in respect of which Rights have been issued
shall also constitute the transfer of the Rights associated with such shares of
Common Stock.
(c) Unless the Board of Directors by resolution adopted
at or before the time of issuance (including pursuant to the exercise of rights
under the Company's employee benefit plans) of any shares of Common Stock
specifies to the contrary, Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for Rights, and shall bear a
legend substantially similar to the following:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between
Personnel Group of America, Inc. (the "Company") and The First National
Bank of Boston and the Rights Agent thereunder (the "Rights Agent")
dated as of February 6, 1996, as such may be amended or restated 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 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.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the
-13-
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificates.
Notwithstanding this paragraph (c), the omission of a Legend shall not affect
the enforceability of any part of this Agreement or the rights of any holder of
the Rights.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the 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 one one-hundredths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such exercise price
per one one-hundredth of a share, the "Purchase Price"), but the amount and type
of securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a), Section 11(i) or Section 22 hereof that represents Rights beneficially
owned by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
-14-
such, or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of Section 7(e) hereof,
and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall 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 Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified in Section
7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, its Chief Executive Officer,
President or any Vice President, either manually or by facsimile signature, and
shall have affixed thereto the Company's seal or a facsimile thereof which shall
be attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile signature and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates shall cease
to be such officer of the Company
-15-
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had not ceased
to be such officer of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep, or cause to be kept, at its principal office or offices designated as
the appropriate place 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 names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Rights Certificate or Certificates (other than Rights Certificates
representing Rights that may have been exchanged pursuant to Section 24 hereof)
may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like
number of one one-hundredths of a share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash
-16-
or other assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitles such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any 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 principal office or offices 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 signed the
certificate contained 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) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e), Section 14 hereof and
Section 24 hereof, 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 transfer, split
up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificate, if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the
-17-
Rights Agent for countersignature and delivery to the registered owner in lieu
of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, at any time after the
Distribution Date the registered holder of any Rights Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein including,
without limitation, the restrictions on exercisability set forth in Section
9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part 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 principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-hundredths of a share (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) 5:00 P.M., Charlotte, North
Carolina time, on February 6, 2006, or such later date as may be established by
the Board of Directors prior to the expiration of the Rights (such date, as it
may be extended by the Board, the ("Final Expiration Date"), or (ii) the time at
which the Rights are redeemed or exchanged as provided in Section 23 and Section
24 hereof (the earlier of (i) and (ii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right initially shall be
$95.00 shall be subject to adjustment from time to time as provided in Section
11 and Section 13(a) hereof and shall be payable in accordance with paragraph
(c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by
-18-
payment, with respect to each Right so exercised, of the Purchase Price per one
one-hundredth of a share of Preferred Stock (or other shares, securities, cash
or other assets, as the case may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from any transfer
agent of the shares of Preferred Stock (or make available, if the Rights Agent
is the transfer agent for such shares) certificates for the total number of one
one-hundredths of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of shares of Preferred Stock issuable upon exercise of the Rights hereunder with
a depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of Preferred Stock as
are to be purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or, upon the order of the registered holder of such 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. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) shall be made in cash or by certified bank check or bank draft payable
to the order of the Company. In the event that the Company is obligated to issue
other securities (including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company will
make
-19-
all arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require prior to the occurrence
of a Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.
(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 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the Board
of Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or
-20-
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or any other Person
as a result of its failure to make any determinations with respect to an
Acquiring Person or any of its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, (ii) indicated a negative response to clauses (1)
and (2) of the Certificate contained in the form of election to purchase set
forth on the reverse side of the Rights Certificate, and (iii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
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 any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the
-21-
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.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of
its authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) that, as provided in this Agreement including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the first occurrence of
a Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, a registration statement under the Act, with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting
-22-
the requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed ninety
(90) days after the date set forth in clause (i) of the first sentence of this
Section 9(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 has been rescinded. In addition, if
the Company shall determine that a registration statement is required following
the Distribution Date, the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law, or a registration statement
shall not have been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one one-hundredths of a
share of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable.
-23-
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of one one-hundredths
of a share of Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of one one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in respect of a name
other than that of the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise or to issue or deliver any certificates for a
number of one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificates at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) 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 all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the
-24-
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or capital stock, as the
-25-
case may be, issuable on such date, 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 shares of Preferred Stock or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date and at a time when
the Preferred Stock transfer books of the Company were open, 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) hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in
the event any Person shall, at any time after the Rights Dividend
Declaration Date, become an Acquiring Person, unless the event causing
such Person to become an Acquiring Person is a transaction set forth in
Section 13(a) hereof, then, promptly following the occurrence of such
event, proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall thereafter
have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu
of a number of one one-hundredths of a share of Preferred Stock, such
number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by
the then number of one one-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event, and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred to as the
"Purchase
-26-
Price" for each Right and for all purposes of this Agreement) by 50% of
the Current Market Price (determined pursuant to Section 11(d) hereof)
per share of Common Stock on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock which is authorized by the Company's certificate of
incorporation, as such may be amended and/or restated from time to
time, 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 the foregoing
subparagraph (ii) of this Section 11(a), the Company shall, to the
extent permitted by applicable law and any material agreements then in
effect to which the Company is a party, (A) determine the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value"), and (B) with respect to each Right (subject to Section 7(e)
hereof), make adequate provision to substitute for the Adjustment
Shares, upon the exercise of a Right and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock,
such as the Preferred Stock, which the Board has deemed to have
essentially the same value or economic rights as shares of Common Stock
(such shares of preferred stock being referred to as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined by the
Board based upon the advice of a nationally recognized investment
banking firm selected by the Board; provided, however, that if the
Company shall not
-27-
have made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver, to the
extent permitted by applicable law and any material agreements then in
effect to which the Company is a party, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to the Spread.
For purposes of the preceding sentence, the term "Spread" shall mean
the excess of (i) the Current Value over (ii) the Purchase Price. If
the Board determines in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth
above may be extended to the extent necessary, but not more than ninety
(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 thirty (30) day period, as it may be extended,
is herein called the "Substitution Period"). To the extent that the
Company determines that action should be taken pursuant to the first
and/or third sentences of this Section 11(a)(iii), the Company (1)
shall provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek such stockholder approval for such
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
-28-
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 each
Adjustment Share shall be the Current Market Price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the per share or
per unit value of any Common Stock Equivalent shall be deemed to equal
the Current Market Price per share of the Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of Preferred
Stock ("Equivalent Preferred Stock")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
per share of Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of Preferred
Stock and/or Equivalent Preferred 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,
-29-
and the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by delivery
of consideration, part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation), cash (other than a regular quarterly cash dividend out
of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in stock
other than Preferred Stock) or evidences of indebtedness, or of subscription
rights or warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock on
such record date,
-30-
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock, and the denominator of which shall be
such Current Market Price (as determined pursuant to Section 11(d) hereof) per
share of Preferred 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 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,
other than computations made pursuant to Section 11(a)(iii) hereof, the Current
Market Price per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the
thirty (30) consecutive Trading Days immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current
Market Price per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the ten
(10) consecutive Trading Days immediately following such date; provided,
however, that in the event that the Current Market Price per share of the Common
Stock is determined during a period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common Stock payable
in shares of such Common Stock or securities convertible into shares of such
Common Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification shall not have occurred prior to the commencement of the
requisite thirty (30) Trading Day or ten (10)
-31-
Trading Day period, as set forth above, then, and in each such case, the Current
Market Price shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the shares
of Common Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock 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 National Association of Securities Dealers Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the shares
of Common Stock 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 Common Stock selected by the Board. If on any such date no
market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board shall be used. The
term "Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so listed or
traded, Current Market Price per share shall mean the fair
-32-
value per share as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the Current Market Price per share of Preferred Stock shall
be determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last sentence
thereof). If the Current Market Price per share of Preferred Stock
cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner described in
clause (i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement) multiplied by
the Current Market Price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so listed or
traded, Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(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 one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share of
-33-
Common Stock or other share or one-millionth of a share of Preferred Stock, 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 (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Preferred Stock, 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 the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-hundredths
of a share covered
-34-
by a Right immediately prior to this adjustment, by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
one one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the 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 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and
-35-
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 so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of 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 one one-hundredths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredth of a share 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 stated value, if any, of
the number of one one-hundredths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of one
one-hundredths of a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date the number of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of one one-hundredths of a share of Preferred Stock
and other capital
-36-
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 the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for
cash of any shares of Preferred Stock at less than the Current Market Price,
(iii) issuance wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
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
Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets, cash
flow 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
-37-
one or more transactions each of which complies with Section 11(o) hereof), if
(x) at the time of or immediately after such consolidation, merger or sale there
are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
stockholders of the Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 28
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event 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 Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine
the outstanding shares of Common Stock into a smaller number of shares, the
number of Rights associated with each share of 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 Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator which
shall be the
-38-
total number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of 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 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate and (c) if a
Distribution Date has occurred, 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 Common Stock) in accordance with Section 26
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets Cash
Flow or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, 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) hereof), and the Company shall not
be the continuing or 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) hereof) 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 Common Stock
shall be changed into or exchanged for stock or other
-39-
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), in one transaction or a series of related transactions,
assets, cash flow or earning power aggregating more than 50% of the assets, cash
flow or earning power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons (other than the Company or any Subsidiary of the Company
in one or more transactions each of which complies with Section 11(o) hereof),
then, and in each such case (except as may be contemplated by Section 13(d)
hereof), proper provision shall be made so that: (i) each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid, non-assessable and freely tradeable shares of Common
Stock of the Principal Party (as such term is hereinafter defined), not subject
to any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of one one-hundredths of a share of Preferred Stock
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 one
one-hundredths of a share for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence of a Section 11(a)(ii) Event),
and (2) dividing that product (which, following the first occurrence of a
Section 13 Event, shall be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by 50% of the Current Market Price
(determined pursuant to Section 11(d)(i) hereof) per share of the Common Stock
of such Principal Party on the date of consummation of such Section 13 Event;
(ii) such
-40-
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 hereof 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 assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no 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), the Person
that is the issuer of any securities into which shares of Common Stock
of the Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or consolidation; 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 greatest portion of the assets, cash flow or
earning power transferred pursuant to such transaction or transactions;
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 (12) month period
-41-
registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of
which is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Stock of
two or more of which are and have been so registered, "Principal Party"
shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or 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, as soon as practicable after
the date of any consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date; and
(ii) take all such other action as may be
necessary to enable the Principal Party to issue the securities
purchasable upon exercise of the Rights, including
-42-
but not limited to the registration or qualification of such securities
under all requisite securities laws of jurisdictions of the various
states and the listing of such securities on such exchanges and trading
markets as may be necessary or appropriate; and
(iii) will 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.
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).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, the Company shall pay to the registered
holders of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
-43-
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted 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 Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair value of
the Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions
of shares of Preferred Stock (other than fractions which are integral multiples
of one one-hundredth of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share of Preferred Stock). In lieu of fractional shares of Preferred Stock
that are not integral multiples of one one-hundredth of a share of Preferred
Stock, the Company may pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
-44-
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one (1) share of Common Stock. For
purposes of this Section 14(c), the current market value of one share of Common
Stock shall be the closing price per share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) on the Trading Day immediately prior to the
date of such exercise.
(d) 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 are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by 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
-45-
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 in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by
-46-
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, the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. 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 one
one-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any 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 to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 26 hereof), 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, on demand of the Rights Agent, its reasonable expenses and counsel fees
and disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise
-47-
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross 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 in
the premises.
(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 Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.
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, stock transfer or other shareholder services
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
but only if such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this
-48-
Agreement, any of the Rights Certificates shall have been 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 (and no implied duties or
obligations shall be read into this Agreement against the Rights Agent) 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.
-49-
(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 hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by a
person believed in good faith by the Rights Agent to be the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President (whether
or not designated by a number or a word or words added before or after the title
"Vice President"), the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own gross 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 be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it
-50-
be responsible for any adjustment required under the provisions of Section 11,
Section 13 or Section 24 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or Preferred Stock will,
when so issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept written or oral instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President (whether or not designated by a number or a
word or words added before or after the title "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 written or oral instructions of
any such officer.
(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
-51-
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be 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 or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days'
-52-
notice in writing mailed to the Company, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and, if such
resignation occurs after the Distribution Date, to the registered holders of the
Rights Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon thirty (30) days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and, if such removal occurs after the Distribution Date, 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 thirty (30) days after giving notice
of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
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 legal business entity organized and
doing business under the laws of the United States or of the State of North
Carolina or of any other state of the United States, in good standing, that is
authorized under such laws to exercise corporate trust, stock transfer or
shareholder services powers and which has 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 legal business entity 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
-53-
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the
Preferred Stock, and, if such appointment occurs after the Distribution Date,
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, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by the Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Company, 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
-54-
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 Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of business on the
tenth Business Day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of
business on the tenth Business Day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price." Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event until such time as the Company's
right of redemption hereunder has expired. The Company may, at its option, pay
the Redemption Price in cash, shares of Common Stock (based on the Current
Market Price, as defined in Section 11(d)(i) hereof, of the Common Stock at the
time of redemption) or any other form of consideration deemed appropriate by the
Board of Directors.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, evidence of which shall
have been filed with the Rights Agent and without any further action and without
any notice, the right to exercise the
-55-
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 the Board of 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 the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made.
(c) Notwithstanding the provisions of Section 23(a)
hereof, if, within 180 days of a public announcement by a third party of an
intent or proposal to engage (without the current and continuing concurrence of
the Board) in a transaction involving an acquisition of or business combination
with the Company or otherwise to become an Acquiring Person, there is an
election of Directors (whether at one or more stockholder meetings and/or
pursuant to written stockholder consent) resulting in a majority of the Board
being comprised of persons who were not nominated by the Board in office
immediately prior to such election, then following the effectiveness of such
election for a period of 180 days (the "Special Period") the Rights, if
otherwise then redeemable absent the provisions of this paragraph (c), shall be
redeemable upon either of the following conditions being satisfied, but not
otherwise:
(A) by a vote of a majority of the Directors then in
office, provided that
(I) before such vote, the Board of Directors shall have
implemented the Value Enhancement Procedures (as defined below) and
-56-
(II) promptly after such vote, the Company publicly
announces such vote and
(a) the manner in which the Value Enhancement
Procedures were implemented,
(b) any material financial, business, personal
or other benefit or relationship (an
"Interest") which each Company Director and
each Affiliate of such Company Director
(identifying each Director and Affiliate
separately in relation to each such
Interest) has in connection with any
suggested, proposed or pending transaction
with or involving the Company (a
"Transaction"), or with any other party or
Affiliate of any other party to a
Transaction, where such Transaction would or
might, or is intended to, be permitted or
facilitated by redemption of the Rights (an
"Affected Transaction"), other than
treatment as a stockholder on a pro rata
basis with other stockholders or pursuant to
compensation arrangements as a director or
employee of the Company or a subsidiary
which have been previously disclosed by the
Company,
(c) the individual vote of each Director on the
motion to redeem the Rights, and
-57-
(d) the statement of any Director who voted for
or against the motion to redeem the Rights
and desires to have a statement included in
such announcement, or
(B) if clause (A) is not applicable, by a vote of a
majority of the Directors then in office, provided that (I) if there is a
challenge to the Directors' action approving redemption and/or any related
Affected Transaction as a breach of the fiduciary duty of care or loyalty, the
Directors, solely for purposes of determining the effectiveness of such
redemption pursuant to this clause (B), are able to establish the entire
fairness of such redemption and, if applicable, such related Affected
Transaction, and (II) the Company shall have publicly announced the vote of the
Board of Directors approving such redemption and, if applicable, such related
Affected Transaction, which announcement shall set forth the information
prescribed by clauses (A) (II) (b), (c) and (d) above.
"Value Enhancement Procedures" shall mean:
(1) the selection by the Board of Directors of an independent
financial advisor (the "Independent Advisor") from among financial advisors
which have national standing, have established expertise in advising on mergers,
acquisitions and related matters and have no Interest relating to an Affected
Transaction, and have not during the preceding year provided services to, been
engaged by or been a financing source for any other party to an Affected
Transaction or any Affiliate of any such party or of any Director (other than
the Company and its subsidiaries);
(2) whether or not there is a then-pending Affected Transaction,
the receipt by the Board of Directors from its Independent Advisor of (a) such
advisor's view (expressed in such form and subject to such qualifications and
limitations as the Independent Advisor deems
-58-
appropriate) regarding whether redemption of the Rights will serve the best
interests of the Company and its stockholders or (b) such advisor's statement
that it is unable to express such a view, setting forth the reasons therefor;
(3) if there is a then-pending Affected Transaction,
(A) the establishment and implementation by the Board of Directors
of a process and procedures approved by its Independent Advisor which
the Board and such advisor conclude would be most likely to result in
the best value reasonably available to stockholders (regardless of
whether such Affected Transaction involves a "sale of control" or
"break-up" of the Company for Delaware law purposes),
(B) the Board of Directors (I) receiving the opinion of its
Independent Advisor, in customary form and content for transactions of
the type involved, that the Affected Transaction is fair to the
Company's stockholders from a financial point of view and (II)
determining, and the Independent Advisor confirming, that it has no
reason to believe that a superior transaction is reasonably available
for the benefit of the Company's stockholders, and
(C) the execution of a definitive transaction agreement and other
definitive documentation necessary to effect the Affected Transaction.
(d) Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 and other
than in connection with the purchase or repurchase by any of them of Common
Stock prior to the Distribution Date.
-59-
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e) hereof)
for Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors of the Company shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such Subsidiary, or
any entity holding Common Stock for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed
-60-
given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or Equivalent Preferred
Stock, as such term is defined in paragraph (b) of Section 11 hereof) for Common
Stock exchangeable for Rights, at the initial rate of one one-hundredth of a
share of Preferred Stock (or Equivalent Preferred Stock) for each share of
Common Stock, as appropriately adjusted to reflect stock splits, stock dividends
and other similar transactions after the date hereof.
(d) In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions
of shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of Common
Stock, there shall be paid to the registered holders of the Rights Certificates
with regard to which such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this subsection (e),
the current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock
-61-
(as determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Permitted Transfers
(a) For purposes of this Agreement, any direct or
indirect offer, sale, transfer or other disposition of capital stock of the
Company to a third party by a Significant Holder pursuant to a transaction that
complies with the provisions of Exhibit D hereto and Section 25(b) hereof shall
be deemed a "Permitted Transfer."
(b) Tag-Along Rights. (i) If, at any time or from time to
time, any Significant Holder(s) (or any Controlled or Controlling Affiliates (as
such terms are defined in Exhibit D hereto) of a Significant Holder or one or
more Significant Holders acting in concert) (the "Significant Holder
Transferor") proposes to sell or transfer, in one transaction or series of
transactions, any shares of capital stock of the Company representing an
aggregate of twenty percent (20%) or more of the voting stock of the Company to
a Person or group (the "Purchaser"), other than pursuant to Section 25(b)(v)
hereof, the Significant Holder Transferor shall give written notice (a "Transfer
Notice") of such proposed sale or transfer to each qualifying member of a group
constituting a Five Percent Holder (as such term is defined in Exhibit D hereto)
(a "Qualifying Holder") at least ten (10) days prior to the consummation of such
proposed sale or transfer, setting forth (A) the total number of shares of
capital stock offered to be sold or transferred to Purchaser, (B) the
consideration to be received for such shares of capital stock by the Significant
Holder Transferor, (C) any other material terms and conditions of the proposed
sale or transfer, (D) the expected date of the proposed sale or transfer and (E)
that each such Qualifying Holder shall have the right (the "Tag-Along Right") to
elect to sell its Pro Rata Portion (but no less or more) of such shares of
capital stock to be sold or transferred to
-62-
Purchaser. If any portion of the consideration contained in the Transfer Notice
includes consideration other than cash, the Significant Holder Transferor shall
provide the Qualifying Holders with a summary of a valuation study, if any, that
the Significant Holder Transferor has prepared concerning such consideration,
but the Significant Holder Transferor shall have no liability to any Qualifying
Holder with respect to any such summary or study and no obligation to undertake
any such valuation.
(ii) Upon delivery of a Transfer Notice, each
Qualifying Holder has the option, but not the obligation, to sell the Pro Rata
Portion (but no less or more) of its shares of capital stock at the same price
per share of capital stock and pursuant to the same terms and conditions with
respect to payment for the shares of capital stock as agreed to by the
Significant Holder Transferor, by sending written notice to the Significant
Holder Transferor within five (5) days of the date of the Transfer Notice,
indicating its election to sell the Pro Rata Portion of its shares of capital
stock in the same transaction (any Qualifying Holder that so elects to exercise
its Tag-Along Right, referred to herein as a "Tag-Along Shareholder"). For
purposes of this Section 25, "Pro Rata Portion" means with respect to shares of
capital stock held by a Qualifying Holder at any date of determination, such
number of shares of capital stock owned by such Qualifying Holder as would
result in such Qualifying Holder selling the same percentage of the total number
of shares of capital stock held by such Qualifying Holder in the sale or
transfer subject to the Transfer Notice ("Subject Sale") as the Significant
Holder Transferor sells in the Subject Sale relative to the total number of
shares of capital stock held by the Significant Holder Transferor (assuming with
respect to the Transfer Notice, that all Qualifying Holders have exercised their
Tag-Along Right in full). For a one hundred and twenty (120) day period
following such five (5) day period, each Tag-Along Shareholder shall be
permitted to
-63-
consummate the sale or transfer to the Purchaser(s) on the terms and conditions
set forth in the Transfer Notice of its Pro Rata Portion of its shares of
capital stock in accordance with its election and the Significant Holder
Transferor shall be permitted to concurrently sell the balance of the shares of
capital stock that are the subject of the Transfer Notice that are not sold by
the Tag-Along Shareholders. If in connection with any proposed sale or transfer
subject to this Section 25, the proposed Purchaser desires to purchase a number
of shares of capital stock less than the amount set forth in the Transfer
Notice, such reduced total number of shares shall be substituted for the total
number of shares constituting the Subject Sale for purposes of determining each
Qualifying Holder's Pro Rata Portion.
(iii) Each Tag-Along Shareholder shall not be
required to make representations and warranties in connection with such sale
other than customary representations and warranties with respect to (A) such
Tag-Along Shareholder's due organization, power and authority, (B) such
Tag-Along Shareholder's ownership of the shares of capital stock and ability to
freely convey such shares of capital stock without liens or encumbrances, (C)
non-contravention of such Tag-Along Shareholder's charter, bylaws or other
organizational documents or material agreements of such Tag-Along Shareholder
and (D) the enforceable nature of such Tag-Along Shareholder's obligations under
the documents for such sale to which it is a party (collectively, the
"Shareholder Representations"). No Tag-Along Shareholder shall be liable in
respect of any indemnification provided in connection with a Tag-Along Sale
(with respect to such Shareholder Representations) in excess of the
consideration received by such Tag-Along Shareholder in such Tag-Along Sale, and
no Tag-Along Shareholder shall be required to participate in any escrow relating
to such Tag-Along Sale in excess of such Tag-Along Shareholder's participation
in the Tag-Along Sale.
-64-
(iv) In the event that no Qualified Holder elects
to sell or transfer shares of capital stock pursuant to this Section 25, the
Significant Holder Transferor shall have the right for a period of one hundred
and twenty (120) days after the expiration of the 5-day period referred to in
Section 25(b)(ii) to sell or transfer the Shares subject to the Transfer Notice
to the Purchaser at a price not greater than the price contained in, and
otherwise on terms and conditions no more favorable to the Significant Holder
Transferor than those set forth in, the Transfer Notice; it being agreed that,
after the end of the 120-day period referred to in this Section 25(b)(iv), the
Significant Holder Transferor will not effect any transaction in any shares of
capital stock that are the subject of the Transfer Notice without commencing de
novo the procedures set forth in this Section 25(b).
(v) The provisions of Section 25 shall not apply
to (A) any transfer or series of transfers by a Significant Holder of shares of
capital stock to any of its Affiliates or (B) any sale or transfer of capital
stock by a Significant Holder to an underwriter or broker in connection with an
offering under an effective registration statement under the 1933 Act or a
transfer pursuant to Rule 144 under the 1933 Act.
Section 26. 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 Preferred Stock or to make any other distribution to the holders
of Preferred Stock (other than a regular quarterly cash dividend out of earnings
or retained earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification of
its Preferred Stock (other than a
-65-
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (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) hereof), 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 transaction or a series of related transactions, of more than 50% of the
assets, cash flow 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) hereof), 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 27
hereof, a notice of such proposed action, which shall specify the record date
for the 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 Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days prior to
the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Preferred Stock,
whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) 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 27 hereof, a
-66-
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in the preceding paragraph to Preferred Stock shall be
deemed thereafter to refer to Common Stock and/or, if appropriate, other
securities.
Section 27. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing by
the Rights Agent with the Company) as follows:
Personnel Group of America, Inc.
0000 Xxxxx Xxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing by the Rights Agent with the Company) as follows:
Wachovia Bank, National Association
1525 West X.X. Xxxxxx Boulevard
Building 3C, Third Floor
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: XxXxxxx Xxxxxx
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of 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.
-67-
Section 28. Supplements and Amendments.
(a) Prior to the Distribution Date, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date, and
subject to the provisions of Section 28 (b) and (c) hereof, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person). Notwithstanding anything contained in this
Agreement to the contrary, (1) no supplement or amendment shall be made that
decreases the Redemption Price, and (2) no supplement or amendment that changes
the rights or duties of the Rights Agent shall be made without the consent of
the Rights Agent. Upon the delivery of a certificate from an appropriate officer
of the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 28, the Rights Agent shall execute
such supplement or amendment. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
(b) The approval or affirmative vote of (i) any and each
Five Percent Holder and (ii) the Board of Directors by a vote of at least eighty
percent (80%) of the entire Board of Directors (as such terms are defined in
Exhibit D hereto) shall be required to amend,
-68-
alter, change or repeal the provisions of Section 25(b) hereof or to adopt any
provisions inconsistent with the purpose and intent of Section 25(b) hereof but
excluding any amendment, alteration, change or repeal in connection with a
merger, consolidation or similar transaction with an entity that is not a
Significant Holder or Controlled or Controlling Affiliate thereof or a
Subsidiary of the Company and that has the result of causing the stockholders of
the Corporation immediately prior to such transaction to Beneficially Own less
than fifty percent (50%) of the voting power of the shares entitled to vote
generally in elections of directors of the Company or the corporation surviving
or resulting from such transaction and less than fifty percent (50%) of the
outstanding shares of Common Stock or common stock of the surviving or resulting
corporation. Notwithstanding the foregoing, the Company may at any time amend or
terminate the provisions contained in Section 25(b) of this Agreement without
the approval or affirmative vote described in the first sentence of this Section
27(b), so long as Tag-Along Rights substantively similar to these contained in
Section 25(b) are provided for in a separate written agreement reasonably
satisfactory to any and each Five Percent Holder.
(c) Notwithstanding anything herein to the contrary, no
supplement or amendment shall be made to this Agreement during the Special
Period or at a time when the Rights are not redeemable, except as contemplated
by clause (i) or (ii) of the second sentence of Section 27(a) hereof.
Section 29. 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 30. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock or any
-69-
other class of capital stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
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 General Rules
and Regulations under the Exchange Act. The Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board 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 of the directors on the
Board to any liability to the holders of the Rights.
Section 31. 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 the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
-70-
Section 32. 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 the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth Business Day following the date of such determination by the Board of
Directors. Without limiting the foregoing, if any provision requiring a specific
group of directors to act is held to by any court of competent jurisdiction or
other authority to be invalid, void or unenforceable, such determination shall
then be made by the Board of Directors of the Company in accordance with
applicable law and the Company's Restated Certificate of Incorporation and
By-laws, in each case as may be amended and/or restated from time to time.
Section 33. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 34. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
-71-
Section 35. Descriptive Headings. Descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
-72-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
PERSONNEL GROUP OF AMERICA, INC.
By /s/ Xxx X. Xxxxxxxx, Xx.
---------------------------
Name: Xxx X. Xxxxxxxx, Xx.
Title: Senior Vice President
WACHOVIA BANK, NATIONAL
ASSOCIATION
By /s/ XxXxxxx Xxxxxx
---------------------------
Name: XxXxxxx Xxxxxx
Title: Officer
-73-
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
PERSONNEL GROUP OF AMERICA, INC.
Pursuant to Section 151 of the General Corporation Law of
the State of Delaware
We, the undersigned officers of Personnel Group of America,
Inc., a corporation organized and existing under the General Corporation Law of
the State of Delaware, in accordance with the provisions of Section 103 thereof,
DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the said Corporation, the said
Board of Directors on February 6, 1996, adopted a resolution creating a series
of shares of Preferred Stock designated as Series A Junior Participating
Preferred Stock, par value $0.01 per share, in connection with the adoption of
the Rights Agreement, dated February 6, 1996, between the Corporation and the
First National Bank of Boston (the "Rights Agreement"). On March 14, 2003, the
Corporation entered into a Restructuring Agreement with various lenders and the
holders of its 5-3/4% Convertible Subordinated Notes due 2004, pursuant to which
the Corporation agreed to amend and restate the Rights Agreement. On ____, 2003,
the Board of Directors of the Corporation adopted the following resolution
amending and restating the terms of the series of shares of Preferred Stock
designated as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, the terms of the Series A Junior Participating
Preferred Stock, par value $0.01 per share, of the Corporation are hereby
amended and restated, and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock," par
value $0.01 per share, and the number of shares constituting such series shall
be 500,000.
Section 2. Dividends and Distributions.
(A) 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 A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating
-1-
Preferred Stock, in preference to the holders of shares of the Common Stock of
the Corporation, par value $0.01 per share (the "Common Stock"), and of any
other shares of any class or series of stock of the Corporation ranking junior
to the Series A Junior Participating Preferred Stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of January, April, July and October in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 initially
or (b) subject to the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Junior Participating Preferred Stock. In the event the
Corporation shall at any time after February 6, 1996 (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 shares of Series A Junior Participating Preferred
Stock were entitled immediately prior to such event under clause (b) of 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.
(B) The Corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Stock as provided in Paragraph
(A) above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided 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 initially $1.00 per
share on the Series A Junior Participating Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such
-2-
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall
initially entitle the holder thereof to 100 votes on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after 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 number of votes per share to which holders of
shares of Series A Junior Participating Preferred Stock 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.
(B) Except as otherwise provided herein or by law, the holders
of shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency shall xxxx the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series A Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series A Junior
Participating Preferred Stock) with dividends in arrears in an amount equal to
six (6) quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) directors.
(ii) During any default period, such voting right
of the holders of Series A Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders of
any other series of Preferred Stock, if any, to increase, in certain
cases, the authorized number of directors shall be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The absence of a
quorum of the holders of Common Stock shall not affect the exercise by
the holders of Preferred Stock of such voting right. At any meeting at
which the holders of Preferred Stock shall exercise such voting right
initially during an existing default period, they shall have the
-3-
right, voting as a class, to elect directors to fill such vacancies, if
any, in the Board of Directors as may then exist up to two (2)
directors or, if such right is exercised at an annual meeting, to elect
two (2) directors. If the number which may be so elected at any special
meeting does not amount to the required number, the holders of the
Preferred Stock shall have the right to make such increase in the
number of directors as shall be necessary to permit the election by
them of the required number. After the holders of the Preferred Stock
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 increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the rights
of any equity securities ranking senior to or pari passu with the
Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised their
right to elect directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of Preferred Stock
outstanding, irrespective of series, may request, the calling of a
special meeting of the holders of Preferred Stock, which meeting shall
thereupon be called by the President, a Vice-President or the Secretary
of the Corporation. Notice of such meeting and of any annual meeting at
which holders of Preferred Stock are entitled to vote pursuant to this
Paragraph (C)(iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him at his last address as
the same appears on the books of the Corporation. Such meeting shall be
called for a time not earlier than 20 days and not later than 60 days
after such order or request or in default of the calling of such
meeting within 60 days after such order or request, such meeting may be
called on similar notice by any stockholder or stockholders owning in
the aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding. Notwithstanding the provisions
of this Paragraph (C)(iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed
for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if applicable,
shall continue to be entitled to elect the whole number of directors
until the holders of Preferred Stock shall have exercised their right
to elect two (2) directors voting as a class, after the exercise of
which right (x) the directors so elected by the holders of Preferred
Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as provided
in Paragraph (C)(ii) of this Section 3) be filled by vote of a majority
of the remaining directors theretofore elected by the holders of the
class of stock which elected the director whose office shall have
become vacant. References in this Paragraph (C) to directors elected by
the holders of a particular class of stock shall include directors
elected by such directors to fill vacancies as provided in clause (y)
of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a class to
elect directors shall cease, (y) the term of any directors elected by
the holders of Preferred Stock as a class shall terminate, and (z)
-4-
the number of directors shall be such number as may be provided for in
the certificate of incorporation or by-laws irrespective of any
increase made pursuant to the provisions of Paragraph (C)(ii) of this
Section 3 (such number being subject, however, to change thereafter in
any manner provided by law or in the certificate of incorporation or
by-laws). Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock 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.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
A Junior Participating Preferred Stock 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
A Junior Participating 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 A Junior Participating Preferred Stock, except dividends
paid ratably on the Series A Junior Participating Preferred Stock and
all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided 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 A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
-5-
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued 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.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received an amount initially equal to $100 per share of Series A
Participating Preferred Stock, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity with the Series A Junior Participating
Preferred Stock, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after 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 Adjustment Number in effect immediately
-6-
prior to such event shall be adjusted by multiplying such Adjustment 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.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the shares
of Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after 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 set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the Corporation's
Preferred Stock as to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise, and shall rank
senior to the Common Stock as to such matters.
Section 10. Amendment. At any time when any shares of Series A
Junior Participating Preferred Stock are outstanding, neither the Certificate of
Incorporation of the Corporation nor this Certificate of Designation shall be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior Participating Preferred
Stock so as to affect them adversely without the affirmative vote of the holders
of at least two-thirds the outstanding shares of Series A Junior Participating
Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this day of __________, 2003.
-7-
PERSONNEL GROUP OF AMERICA, INC.
By:_____________________________
Name:___________________________
Title: Chairman of the Board
Attest:
Secretary
-8-
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER FEBRUARY 6, 2006 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, INITIALLY AT
$0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.](1)
Rights Certificate
PERSONNEL GROUP OF AMERICA, INC.
This certifies that __________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Amended and Restated Rights Agreement, dated as of April ___,
2003 (the "Rights Agreement"), between Personnel Group of America, Inc. a
Delaware corporation (the "Company"), and Wachovia Bank, National
-------------------------
(1) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
Association, a national banking corporation (the "Rights Agent"), to purchase
from the Company at any time prior to 5:00 P.M. (Charlotte, North Carolina time)
on February 6, 2006 (unless such date is extended prior thereto by the Board of
Directors) at the office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-hundredth of a fully paid,
non-assessable share of Series A Junior Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of initially $95.00 per
one one-hundredth of a share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of February 6, 1996, based on the Preferred
Stock as constituted at such date. The Company reserves the right to require
prior to the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that a number of Rights be exercised so that only whole shares
of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
-2-
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.
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,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-hundredths
of a share of Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised in part, the 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, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of initially $.01
-3-
per Right at any time prior to the earlier of (i) the close of business on the
tenth Business Day following the Stock Acquisition Date (as such time period may
be extended pursuant to the Rights Agreement), and (ii) the Final Expiration
Date. For 180 days following a change in control of the Board of Directors of
the Company, that has not been approved by the Board of Directors, occurring
within six months of announcement of an unsolicited third party acquisition or
business combination proposal or of a third party's intent or proposal otherwise
to become an Acquiring Person, the new directors are entitled to redeem the
rights (assuming the rights would have otherwise been redeemable), including to
facilitate an acquisition or business combination transaction involving the
Company, but only (1) if they have followed certain prescribed procedures or (2)
if such procedures are not followed, and if their decision regarding redemption
and any acquisition or business combination is challenged as a breach of
fiduciary duty of care or loyalty, the directors (solely for purposes of the
effectiveness of the redemption decision) are able to establish the entire
fairness of the redemption or transaction. In addition, under certain
circumstances following the Stock Acquisition Date, the Rights may be exchanged,
in whole or in part, for shares of the Common Stock, or shares of preferred
stock of the Company having essentially the same value or economic rights as
such shares. Immediately upon the action of the Board of Directors of the
Company authorizing any such exchange, and without any further action or any
notice, the Rights (other than Rights which are not subject to such exchange)
will terminate and the Rights will only enable holders to receive the shares
issuable upon such exchange.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Company, be
-4-
evidenced by depositary receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained 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 consent to or withhold consent from any corporate
action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this 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.
-5-
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ___________ ___,
ATTEST: PERSONNEL GROUP OF AMERICA, INC.
____________________________________ By: ____________________________
Secretary Name: __________________________
Title: _________________________
Countersigned:
WACHOVIA BANK NATIONAL
ASSOCIATION, as Rights Agent
By: ________________________________
Authorized Signature
-6-
[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____________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________ Attorney,
to transfer the within Rights Certificate on the books of the within named
Company, with full power of substitution.
Dated: _______________, ___
______________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ]is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [] did [] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, ___
______________________________
Signature
Signature Guaranteed:
-2-
NOTICE
The signature to the foregoing Assignment and 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.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: PERSONNEL GROUP OF AMERICA, INC.
The undersigned hereby irrevocably elects to exercise Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security
or other identifying number:
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced
by this 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 and address)
Dated: _______________, ___
______________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ____________________ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
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.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On February 6, 1996, the Board of Directors of Personnel Group
of America, Inc. (the "Company") declared a dividend distribution of one Right
for each outstanding share of Common Stock, par value $0.01 per share of the
Company (the "Common Stock") to stockholders of record at the close of business
on February 27, 1996 (the "Record Date"). Each Right initially entitled the
registered holder to purchase from the Company a unit consisting of one
one-hundredth of a share (a "Unit") of Series A Junior Participating Preferred
Stock, par value $0.01 per share (the "Series A Preferred Stock") at a Purchase
Price of $95.00 per Unit, subject to adjustment. The description and terms of
the Rights are set forth in the Amended and Restated Rights Agreement, dated
_____, 2003, between the Company and Wachovia Bank National Association as
Rights Agent (the "Rights Agreement").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified in the
Rights Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 business days following
a public announcement that a person or group of affiliated or associated persons
other than certain holders expressly set forth in the Rights Agreement and their
permitted transferees (an "Acquiring Person") has acquired beneficial ownership
of 15% or more of the outstanding shares of Common Stock (the "Stock Acquisition
Date"), other than as a result of repurchases of stock by the Company or certain
inadvertent actions by institutional or certain other stockholders or the
date during the Special Period (as defined below) (or at a time when the Rights
are no longer redeemable) that a Person has entered into an agreement or
arrangement with the Company or any Subsidiary of the Company providing for an
Acquisition Transaction (the "Stock Acquisition Date") or (ii) 10 business days
(or such later date as the Board shall determine, provided, however, that no
deferral of a Distribution Date by the Board pursuant to the terms of the Rights
Agreement described in clause (ii) may be made at any time during the Special
Period) following the commencement of a tender offer or exchange offer that
would result in a person or group becoming an Acquiring Person. An Acquisition
Transaction is defined in the Rights Agreement as (x) a merger, consolidation or
similar transaction involving the Company or any of its Subsidiaries as a result
of which stockholders of the Company will no longer own a majority of the
outstanding shares of Common Stock of the Company or a publicly traded entity
which controls the Company or, if appropriate, the entity into which the Company
may be merged, consolidated or otherwise combined with (based solely on the
shares of Common Stock received or retained by such stockholders, in their
capacity as stockholders of the Company, pursuant to such transaction), (y) a
purchase or other acquisition of all or a substantial portion of the assets of
the Company and its Subsidiaries, or (z) a purchase or other acquisition of
securities representing 15% or more of the shares of Common Stock then
outstanding. Until the Distribution Date, (i) the Rights will be evidenced by
the Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates issued after the
Record Date will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate. Pursuant to the Rights
Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that, upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of Preferred
Stock will be issued.
The Rights are not exercisable until the Distribution Date and
will expire at 5:00 P.M. (Charlotte, North Carolina time) on February 6, 2006,
unless such date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that a Person becomes an Acquiring Person, each
holder of a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the exercise price of the
Right. Notwithstanding any of the foregoing, following the occurrence of the
event set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are not exercisable
following the occurrence of the event set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company engages in a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company engages in a merger or other business combination transaction in which
the Company is the surviving corporation and the Common
Stock of the Company is changed or exchanged, or (iii) 50% or more of the
Company's assets, cash flow or earning power is sold or transferred, each holder
of a Right (except Rights which have previously been voided as set forth above)
shall thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such person or group of fifty percent (50%) or more
of the outstanding Common Stock, the Board may exchange the Rights (other than
Rights owned by such person or group which have become void), in whole or in
part, at an initial exchange ratio of one share of Common Stock, or one
one-hundredth of a share of Preferred Stock (or of a share of a class or series
of the Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the Preferred Stock
are granted certain rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness 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. No fractional Units will be
issued and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Stock on the last trading date prior to the date
of exercise.
The Rights Agreement contains provisions with respect to
permitted transfers enabling certain significant holders to effect transfers of
capital stock of the Company to a third party without the occurrence of a
Triggering Event. In the event a significant holder (as such term is defined in
the Company's Restated Certificate of Incorporation attached as Exhibit D to the
Rights Agreement) or one or more significant holders acting in concert sell or
transfer, in one transaction or a series of transactions, any shares of capital
stock of the Company representing an aggregate of 20% or more of the voting
stock to any person or a group, such significant holder shall give written
notice of the proposed transfer to each qualifying member (a "Qualifying
Holder") of a group constituting a five percent holder (as such term is defined
in the Company's Restated Certificate of Incorporation attached as Exhibit D to
the Rights Agreement) at least ten (10) days prior to the consummation of the
proposed sale or transfer and each Qualifying Holder shall have the right to
elect to sell its pro rata portion of such shares of capital stock to be sold or
transferred to the purchaser for the same price and pursuant to the same terms
as agreed by the transferor and the purchaser.
At any time until ten business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at an initial price of $0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the initial $0.01 redemption price.
For 180 days (the "Special Period") following a change in
control of the Board of Directors of the Company, that has not been approved by
the Board of Directors, occurring within six months of announcement of an
unsolicited third party acquisition or business combination proposal or of a
third party's intent or proposal otherwise to become an Acquiring Person, the
new directors are entitled to redeem the rights (assuming the rights would have
otherwise been redeemable), including to facilitate an acquisition or business
combination transaction involving the Company, but only (1) if they have
followed certain prescribed procedures or (2) if such procedures are not
followed, and if their decision regarding redemption and any acquisition or
business combination is challenged as a breach of fiduciary duty of care or
loyalty, the directors (solely for purposes of the effectiveness of the
redemption decision) are able to establish the entire fairness of the redemption
or transaction.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company or in the event of the
redemption of the Rights as set forth above.
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights, or to shorten or lengthen any time
period under the Rights Agreement. The foregoing notwithstanding
(i) no amendment may be made during the Special Period or at such time as the
Rights are not redeemable and (ii) the approval or affirmative vote of certain
five percent holders and the Board of Directors by a vote of at least 80% of the
entire Board is required to amend Section 25(b) of the Rights Agreement on
tag-along rights or to adopt any provision inconsistent with the purpose and
intent of Section 25(b), excluding any amendment in connection with a merger,
consolidation or similar transaction with certain parties that has a result of
causing stockholders of the Company to beneficially own less than 50% of the
voting shares of the Company and less than 50% of the outstanding common stock
of the surviving corporation (unless tag-along rights substantially similar of
those contained in the Rights Agreement are provided for in an agreement
reasonably satisfactory to such five percent holders).
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A/Current Report on Form 8-K dated _______, 2003. A copy of the Rights
Agreement is available free of charge from the Rights Agent. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated herein
by reference.
EXHIBIT D
(Form of Restated Certificate of Incorporation)
FORM OF
RESTATED
CERTIFICATE OF INCORPORATION
OF
PERSONNEL GROUP OF AMERICA, INC.
The undersigned, Xxxxx Xxxxxxxxx, certifies that he is the Chief
Executive Officer of Personnel Group of America, Inc. (the "Corporation"), a
corporation organized and existing under the General Corporation Law of the
State of Delaware (the "GCL"), and does hereby further certify as follows:
(A) The name of the Corporation is Personnel Group of America,
Inc. and the Corporation was originally incorporated under the name Personnel
Group of America, Inc.
(B) The original certificate of incorporation of the
Corporation was filed with the Secretary of State of the State of Delaware on
July 7, 1995 and the original restated certificate of incorporation of the
Corporation (the "Original Restated Certificate of Incorporation") was filed
with the Secretary of State of the State of Delaware on July 28, 1995.
(C) This Restated Certificate of Incorporation was duly
adopted by the Board of Directors of the Corporation (the "Board of Directors")
and by the stockholders of the Corporation in accordance with Sections 242 and
245 of the GCL.
(D) This Restated Certificate of Incorporation restates and
integrates and further amends the Original Restated Certificate of
Incorporation, as heretofore amended or supplemented.
(E) Upon the filing (the "Effective Time") of this Restated
Certificate of Incorporation pursuant to the GCL, and without further action on
the part of the Corporation or its stockholders: (a) each share of Common Stock,
par value $0.01 per share, of the Corporation shall be combined on a basis of 1
share for every 25 shares (the "Reverse Stock Split"); (b) the par value of each
share of Common Stock, par value $0.01 per share, shall be restated to $0.01 per
share; (c) each 25 shares of Common Stock, par value $0.01 per share,
outstanding shall be deemed to represent one share of Common Stock, par value
$0.01 per share; and (d) all fractional shares resulting from the foregoing
shall be eliminated and each holder thereof shall be entitled to receive a cash
payment equal to such holder's fraction of a share of Common Stock, par value
$0.01 per share, multiplied by $____ per share(1) Each certificate that
theretofore represented a share or shares of Common Stock (the "Original Share
Number") shall thereafter represent that number of shares of Common Stock equal
to the quotient resulting from the division of the Original Share Number by 25,
rounded down to the nearest whole number, plus cash in respect of any fractional
number of shares resulting from the Reverse Stock Split as calculated in
accordance with clause (d) of the preceding sentence.
(F) The text of the Original Restated Certificate of
Incorporation is hereby amended and restated to read in its entirety as follows:
First. The name of the corporation is Venturi Partners, Inc.
(the "Corporation").
Second. The address of the Corporation's registered office in
the State of Delaware is The Corporation Trust Company, The Corporation Trust
Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, County of New Castle.
The name of its registered agent at such address is The Corporation Trust
Company.
Third. The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of Delaware (the "GCL").
Fourth.
(a) Authorized Capital Stock. The total number
of shares of all classes of stock which the Corporation shall have authority to
issue is one hundred million (100,000,000), of which ninety-five million
(95,000,000) shares, par value $0.01 per share, shall be designated as "Common
Stock" and five million (5,000,000) shares, par value $0.01 per share, shall be
designated as "Preferred Stock". Subject to the terms of any serial designations
for any series of Preferred Stock, the number of authorized shares of Common
Stock or any series of Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the outstanding shares entitled to vote, voting
together as a single class, irrespective of the provisions of Section 242(b)(2)
of the GCL or any corresponding provision hereafter enacted.
(b) Common Stock. The powers, preferences and
rights, and the qualifications, limitations and restrictions, of each class of
the Common Stock are as follows:
(i) No Cumulative Voting. The holders
of shares of Common Stock shall not have cumulative voting
rights.
(ii) Dividends; Stock Splits. Subject to
the rights of the holders of Preferred Stock, and subject to
any other provisions of this Restated Certificate of
Incorporation, as it may be amended from time to time, holders
of shares of Common Stock shall be entitled to receive such
dividends and other distributions
---------------------------
1 To be calculated in accordance with Section 3.4 of the Agreement prior
to filing the restated certificate of incorporation with the Delaware
Secretary of State.
in cash, stock or property of the Corporation when, as and if
declared thereon by the Board of Directors from time to time
out of assets or funds of the Corporation legally available
therefor.
(iii) Liquidation, Dissolution, Etc. In
the event of any liquidation, dissolution or winding up
(either voluntary or involuntary) of the Corporation, the
holders of shares of Common Stock shall be entitled to receive
the assets and funds of the Corporation available for
distribution after payments to creditors and to the holders of
any Preferred Stock of the Corporation that may at the time be
outstanding, in proportion to the number of shares held by
them, respectively.
(iv) Merger, Etc. In the event of a
merger or consolidation of the Corporation with or into
another entity (whether or not the Corporation is the
surviving entity), the holders of each share of Common Stock
shall be entitled to receive the same per share consideration
on a per share basis.
(v) No Preemptive Or Subscription
Rights. No holder of shares of Common Stock shall be entitled
to preemptive or subscription rights.
(vi) Power To Sell And Purchase Shares.
Subject to the requirements of applicable law, the Corporation
shall have the power to issue and sell all or any part of any
shares of any class of stock herein or hereafter authorized to
such persons, and for such consideration, as the Board of
Directors shall from time to time, in its discretion,
determine, whether or not greater consideration could be
received upon the issue or sale of the same number of shares
of another class, and as otherwise permitted by law. Subject
to the requirements of applicable law, the Corporation shall
have the power to purchase any shares of any class of stock
herein or hereafter authorized from such persons, and for such
consideration, as the Board of Directors shall from time to
time, in its discretion, determine, whether or not less
consideration could be paid upon the purchase of the same
number of shares of another class, and as otherwise permitted
by law.
(c) Preferred Stock. Shares of Preferred Stock
may be issued in one or more series from time to time by the Board of Directors,
and the Board of Directors is expressly authorized to fix for each such class or
series such voting powers, full or limited, or no voting powers and such
designations, preferences and relative participating optional or other special
rights and such qualifications, limitations and restrictions thereof, as shall
be stated and expressed in the resolution or resolutions adopted by the Board of
Directors providing for the issuance of such class or series, in each case
subject to the terms of this Restated Certificate of Incorporation including
without limitation the following:
(i) the distinctive serial designation
of such series which shall distinguish it from other series;
(ii) the number of shares included in
such series;
(iii) the dividend rate (or method of
determining such rate) payable to the holders of the shares of
such series, any conditions upon which such dividends shall be
paid and the date or dates upon which such dividends shall be
payable;
(iv) whether dividends on the shares of
such series shall be cumulative and, in the case of shares of
any series having cumulative dividend rights, the date or
dates or method of determining the date or dates from which
dividends on the shares of such series shall be cumulative;
(v) the amount or amounts which shall
be payable out of the assets of the Corporation to the holders
of the shares of such series upon voluntary or involuntary
liquidation, dissolution or winding up the Corporation, and
the relative rights of priority, if any, of payment of the
shares of such series;
(vi) the price or prices at which, the
period or periods within which and the terms and conditions
upon which the shares of such series may be redeemed, in whole
or in part, at the option of the Corporation or at the option
of the holder or holders thereof or upon the happening of a
specified event or events;
(vii) the obligation, if any, of the
Corporation to purchase or redeem shares of such series
pursuant to a sinking fund or otherwise and the price or
prices at which, the period or periods within which and the
terms and conditions upon which the shares of such series
shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;
(viii) whether or not the shares of such
series shall be convertible or exchangeable, at any time or
times at the option of the holder or holders thereof or at the
option of the Corporation or upon the happening of a specified
event or events, into shares of any other class or classes or
any other series of the same or any other class or classes of
stock of the Corporation, and the price or prices or rate or
rates of exchange or conversion and any adjustments applicable
thereto; and
(ix) whether or not the holders of the
shares of such series shall have voting rights, in addition to
the voting rights provided by law, and if so the terms of such
voting rights.
Fifth. The following provisions are inserted for the
management of the business and the conduct of the affairs of the Corporation,
and for further definition, limitation and regulation of the powers of the
Corporation and of its directors and stockholders:
(a) The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors.
(b) The Board of Directors shall consist of not
less than seven (7) nor more than nine (9) members, the exact number of
which shall be fixed from time to time in the manner provided in the By-Laws of
the Corporation, as amended from time to time (the "By-
Laws"). The number of directors constituting the Board of Directors shall be
fixed at seven (7) as of the date hereof. Election of directors need not be by
written ballot unless the By-Laws so provide.
(c) In addition to the powers and authority
hereinbefore or by statute expressly conferred upon them, the directors are
hereby empowered to exercise all such powers and do all such acts and things as
may be exercised or done by the Corporation, subject, nevertheless, to the
provisions of the GCL, this Restated Certificate of Incorporation, and any
By-Laws adopted by the stockholders; provided, however, that no By-Laws
hereafter adopted by the stockholders shall invalidate any prior act of the
directors which would have been valid if such By-Laws had not been adopted.
Sixth. No director shall be personally liable to the
Corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except to the extent such exemption from liability
or limitation thereof is not permitted under the GCL as the same exists or may
hereafter be amended. If the GCL is amended hereafter to authorize the further
elimination or limitation of the liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the fullest extent
authorized by the GCL, as so amended. Any repeal or modification of this Article
Sixth shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification with respect to
acts or omissions occurring prior to such repeal or modification.
Seventh. The Corporation shall indemnify its directors and
officers to the fullest extent authorized or permitted by law, as now or
hereafter in effect, and such right to indemnification shall continue as to a
person who has ceased to be a director or officer of the Corporation and shall
inure to the benefit of his or her heirs, executors and personal and legal
representatives; provided, however, that, except for proceedings to enforce
rights to indemnification, the Corporation shall not be obligated to indemnify
any director or officer (or his or her heirs, executors or personal or legal
representatives) in connection with a proceeding (or part thereof) initiated by
such person unless such proceeding (or part thereof) was authorized or consented
to by the Board of Directors. The right to indemnification conferred by this
Article Seventh shall include the right to be paid by the Corporation the
expenses incurred in defending or otherwise participating in any proceeding in
advance of its final disposition.
The Corporation may, to the extent authorized from time to
time by the Board of Directors, provide rights to indemnification and to the
advancement of expenses to employees and agents of the Corporation similar to
those conferred in this Article Seventh to directors and officers of the
Corporation.
The rights to indemnification and to the advance of expenses
conferred in this Article Seventh shall not be exclusive of any other right
which any person may have or hereafter acquire under this Restated Certificate
of Incorporation, the By-Laws, any statute, agreement, vote of stockholders or
disinterested directors or otherwise.
Any repeal or modification of this Article Seventh shall not
adversely affect any rights to indemnification and to the advancement of
expenses of a director or officer of the
Corporation existing at the time of such repeal or modification with respect to
any acts or omissions occurring prior to such repeal or modification.
Eighth. Meetings of stockholders may be held within or without
the State of Delaware, as the By-Laws may provide. The books of the Corporation
may be kept (subject to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws.
Ninth. In furtherance and not in limitation of the powers
conferred upon it by the laws of the State of Delaware, the Board of Directors
shall have concurrent power with the stockholders to adopt, amend, alter, add to
or repeal the By-Laws. Notwithstanding any other provision of this Restated
Certificate of Incorporation (and in addition to any other vote that may be
required by law), for so long as there is a Significant Holder, either (i) the
approval of the Board of Directors, including the affirmative vote of at least
one of the persons designated as nominees by the Significant Holder prior to
their election to the Board of Directors and in accordance with the terms of the
By-Laws ("Significant Holder Designees"), or (ii) the affirmative vote of the
holders of at least seventy-five percent (75%) of the voting power of the shares
entitled to vote generally in the election of directors shall be required to
amend, alter, add to or repeal the By-Laws (including by merger, consolidation,
recapitalization or otherwise).
Tenth. The Corporation hereby elects not to be governed by
Section 203 of the GCL pursuant to Section 203(b)(3) therein.
Eleventh. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Restated Certificate of
Incorporation in the manner now or hereafter prescribed in this Restated
Certificate of Incorporation, the By-Laws or the GCL, and all rights herein
conferred upon stockholders are granted subject to such reservation; provided,
however, that, notwithstanding any other provision of this Restated Certificate
of Incorporation (and in addition to any other vote that may be required by
law), for so long as there is a Significant Holder:
(d) subject to the following paragraph (b),
either (i) the recommendation or approval of the Board of Directors, including
the recommendation or affirmative vote of at least one of the Significant Holder
Designees, or (ii) the affirmative vote of the holders of at least seventy-five
percent (75%) of the voting power of the shares entitled to vote generally in
the election of directors, shall be required to amend, alter, change or repeal
any provision of this Restated Certificate of Incorporation or to adopt any
provisions inconsistent with the purpose and intent thereof (including by
merger, consolidation, recapitalization or otherwise); and
(e) the approval or affirmative vote of (i) any
and each Five Percent Holder and (ii) the Board of Directors by a vote of at
least eighty percent (80%) of the entire Board of Directors shall be required to
amend, alter, change or repeal Article Twelfth or to adopt any provisions
inconsistent with the purpose and intent of Article Twelfth hereof (including by
merger, consolidation, recapitalization or otherwise) but excluding any
amendment, alteration, change or repeal in connection with a merger,
consolidation or similar transaction with an entity that is not a Significant
Holder or Controlled or Controlling Affiliate thereof or a Subsidiary of
the Corporation and that has the result of causing the stockholders of the
Corporation immediately prior to such transaction to beneficially own less than
fifty percent (50%) of the voting power of the shares entitled to vote generally
in elections of directors of the Corporation or the corporation surviving or
resulting from such transaction and less than fifty percent (50%) of the
outstanding shares of Common Stock or common stock of the surviving or resulting
corporation.
Twelfth.
(f) Control Transactions.
(i) In addition to any affirmative vote
required by law or this Restated Certificate of Incorporation
or the By-Laws, and except as otherwise expressly provided in
Section (a)(ii) of this Article Twelfth, a Control Transaction
shall require the affirmative vote of not less than fifty
percent (50%) of the votes actually cast by the holders of all
the then outstanding shares of Voting Stock, voting together
as a single-class, excluding Voting Stock beneficially owned
by any Significant Holder, or any Controlled or Controlling
Affiliate thereof, proposing to effect the Control
Transaction. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that
a lesser percentage or separate class vote may be specified,
by law or in any agreement with any national securities
exchange or otherwise.
(ii) The provisions of Section (a)(i) of
this Article Twelfth shall not be applicable to any particular
Control Transaction, and such Control Transaction shall
require only such affirmative vote, if any, as is required by
law or by any other provision of this Restated Certificate of
Incorporation or the By-Laws, or any applicable rule or
listing standard of any securities exchange or market on which
any of the Corporation's securities are listed or approved for
trading, if all of the conditions specified in either of the
following paragraphs (A) or (B) are met (any Control
Transaction that satisfies the conditions in paragraphs (A) or
(B) or in Section (a)(i) of this Article Twelfth being, an
"Approved Control Transaction"):
Prior to the consummation
of the Control Transaction, it shall have
been approved by the Board of Directors by a
vote of at least eighty percent (80%) of the
entire Board of Directors.
Prior to consummating the
Control Transaction, the Significant Holder,
or any Controlled or Controlling Affiliate
thereof, proposing to effect such a Control
Transaction shall have made an offer to all
of the holders of shares of the class of
Capital Stock the acquisition of which by a
Significant Holder, or any Controlled or
Controlling Affiliate thereof, would give
rise to the proposed Control Transaction
(the "Target Stock") and on a proportionate
basis to all holders of shares of any
class of Capital Stock that is convertible
into or exchangeable for Target Stock or
into or for which Target Stock is
convertible or exchangeable, for the
purchase of any or all of such shares
("Qualifying Offer"), which offer remains
open for at least twenty (20) business days
and otherwise complies with the rules and
regulations of the Securities Exchange Act
of 1934, as amended (the "Act") and which
offer is made for consideration that is at
least equal to or greater than any other
consideration to be paid by the Significant
Holder, or the Controlled or Controlling
Affiliate, for Voting Stock to be acquired
in the Control Transaction or that was paid
by the Significant Holder, or the Controlled
or Controlling Affiliate, for Voting Stock
during the one hundred and eighty (180) days
preceding the commencement of the Qualifying
Offer; provided that any such Control
Transaction shall be consummated within
ninety (90) days of the expiration of the
Qualifying Offer.
(iii) Anything to the contrary herein
notwithstanding, the provisions of this Article Twelfth shall
not apply to any transaction following the consummation of an
Approved Control Transaction.
(g) Related-Party Transactions. In addition to
any affirmative vote required by law or this Restated Certificate of
Incorporation or the By-Laws, a Related-Party Transaction shall require the
approval or affirmative vote of (i) any and each Five Percent Holder prior to
the consummation of such Related-Party Transaction and (ii) the Board of
Directors by a vote of at least eighty percent (80%) of the entire Board of
Directors prior to the consummation of such Related-Party Transaction. Such
affirmative vote or approval shall be required notwithstanding the fact that no
vote may be required, or that a lesser or separate class vote may be specified,
by law or in any agreement with any national securities exchange or otherwise.
(h) The following definitions shall apply with
respect to this Restated Certificate of Incorporation:
(i) The term "Control Transaction"
shall mean:
A. The acquisition in one or
a series of transactions by a Significant
Holder, or any Controlled or Controlling
Affiliate thereof, of shares of any class or
series of Capital Stock that has the effect
of causing such Significant Holder to
increase its beneficial ownership to
seventy-five percent (75%) or more of the
votes entitled to be cast by the holders of
all then outstanding shares of Voting Stock;
or
B. any reclassification of
securities (including any reverse stock
split), or recapitalization of the
Corporation (including any stock repurchases
by the Corporation), or any merger or
consolidation of the Corporation with any of
its Subsidiaries or any other transaction
(whether or not with or otherwise involving
a Significant Stockholder) that has the
effect, directly or indirectly, of
increasing the proportionate share of any
class or series of Capital Stock, or any
securities convertible into Capital Stock or
into equity securities of any Subsidiary,
that is beneficially owned by any
Significant Stockholder, such that after
giving effect to such reclassification,
recapitalization or other transaction, a
Significant Holder will beneficially own
seventy-five percent (75%) or more of the
votes entitled to be cast by the holders of
all then outstanding shares of Voting Stock.
(A) The term "Related-Party Transaction" shall
mean:
A. a liquidation or
dissolution of the Corporation that is voted
for or consented to by any Related Party, or
any Controlled or Controlling Affiliate
thereof, that immediately prior to such
transaction beneficially owns more than
fifty percent (50%) of the votes entitled to
be cast by the holders of all then
outstanding shares of Voting Stock; or
B. any sale of assets of the
Corporation or any material Subsidiary to,
or any acquisition of assets from or share
subscription in, a Related Party, or any
Controlled or Controlling Affiliate thereof,
directly or indirectly and in any
transaction or series of related
transactions, the value of which in each
case exceeds $5 million; or
C. any merger, statutory
share exchange or consolidation involving
the Corporation or any Subsidiary, directly
or indirectly and in any transaction or
series of related transactions, the value of
which in each case exceeds $5 million, with
any Related Party or any Controlled or
Controlling Affiliate thereof; or
D. any merger, statutory
share exchange or consolidation involving
the Corporation or any Subsidiary, directly
or indirectly and in any transaction or
series of related transactions, the value of
which in each case exceeds $5 million and
pursuant to which any Related Party, or any
Controlled or Controlling Affiliate thereof,
is entitled to receive consideration in
respect of its securities
that is different in form (including, as
different in form, the retention by some
stockholders of their existing securities,
while other stockholders of the same class
are not so retaining their existing
securities) or amount from that offered to
other holders of the same class of
securities (excluding ancillary arrangements
or rights entailing no monetary payments
other than for reasonable third-party legal
fees, out-of-pocket expense reimbursement
and indemnification for the benefit of a
Related Party or its Controlled or
Controlled Affiliates for liabilities in
respect of which other holders of the same
class have no liability); or
E. any other transaction or
series of related transactions, the value of
which in each case exceeds $5 million,
between or among the Corporation and/or any
Subsidiary, on the one hand, and any Related
Parties or any Controlled or Controlling
Affiliates thereof, on the other hand (other
than a subscription for shares of the
Corporation by any Related Party or any
Controlled or Controlling Affiliate thereof,
pursuant to a rights offering made available
to all holders of Common Stock on a pro rata
basis and for the same amount and form of
consideration and otherwise on substantially
the same terms and conditions).
(ii) The term "Capital Stock" shall mean
all capital stock of the Corporation authorized to be issued
from time to time under Article Fourth of this Certificate of
Incorporation; and the term "Voting Stock" shall mean all
Capital Stock which by its terms may be voted on all matters
submitted to stockholders of the Corporation generally.
(iii) The term "Significant Holder" shall
mean any person (other than the Corporation or any Subsidiary
and other than any profit-sharing, employee stock ownership or
other employee benefit plan of the Corporation or any
Subsidiary or any trustee of or fiduciaries with respect to
any such plan when acting in such capacity) who, individually
or as a member of a group within the meaning of Rule 13d-5
under the Act, is the beneficial owner of Voting Stock
representing twenty percent (20%) or more of the votes
entitled to be cast by the holders of all then outstanding
shares of Voting Stock;
(iv) A person shall be a "beneficial
owner" of any Capital Stock (A) which such person or any of
its Controlled or Controlling Affiliates owns, directly or
indirectly; (B) which such person or any of its Controlled or
Controlling Affiliates has, directly or indirectly, (1) the
right to acquire (whether such right is exercisable
immediately or subject only to the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversation rights, exchange rights,
warrants or options or otherwise, or (2) the right to vote
pursuant to any agreement, arrangement or understanding; or
(C) which are owned, directly or indirectly, by any other
person with which such person or any of its Controlled or
Controlling Affiliates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Capital Stock. For the purposes of
determining whether a person is a Significant Holder pursuant
to paragraph (c)(iv) of this Article Twelfth or a Controlled
or Controlling Affiliate pursuant to paragraph (c)(vi) of this
Article Twelfth, the number of shares of Capital Stock deemed
to be outstanding shall include shares deemed beneficially
owned by such person through application of this paragraph
(c)(v) of this Article Twelfth, but shall not include any
other shares of Capital Stock that may be issuable pursuant to
any agreement, arrangement or understanding, or upon exercise
of conversion rights, warrants or options, or otherwise.
(v) The term "Controlled or Controlling
Affiliate" shall mean with respect to a specified person, a
person that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under
common control with, the person specified; provided that the
Corporation and its Subsidiaries shall not, and the executive
officers or directors of the Corporation or any of its
Subsidiaries shall not, solely as a result of holding such
office, be deemed a "Controlled or Controlling Affiliate" of a
Significant Holder; and provided, further, that for purposes
of this definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control
with") shall mean the possession direct or indirect, of the
power to direct or cause the direction of the management and
policies of a person through the ownership of more than fifty
percent (50%) of the voting securities of such person or the
ability to otherwise designate a majority of the board of
directors or managers of such person.
(vi) The term "Subsidiary" means any
company or other entity of which a majority of any class of
equity security is beneficially owned by the Corporation;
provided, however, that for the purposes of the definition of
Significant Holder set forth in paragraph (c)(iv) of this
Article Twelfth, the term "Subsidiary" shall mean only a
company of which a majority of each class of equity security
is beneficially owned by the Corporation.
(vii) The term "Five Percent Holder"
means any person (other than the Corporation or any Subsidiary
and other than any profit-sharing, employee stock ownership or
other employee benefit plan of the Corporation or any
Subsidiary or any trustee of or fiduciaries with respect to
any such plan when acting in such capacity) who, as of the
record date (if any) established for any applicable
transaction or vote (or if there is no record date, as of the
date of consummation of the transaction) and based on the most
recent reports or disclosures filed publicly under the Act,
individually or as a member of a group within the meaning of
Rule 13d-5 under the Act, is the beneficial owner of Voting
Stock representing five percent (5%) or more of the votes
entitled to be cast by
the holders of all then outstanding shares of Voting Stock;
provided that for purposes of this definition only, a person
who reports or discloses beneficial ownership as a member of a
group or by virtue of a relationship with other persons with
respect to the Voting Stock, shall not be deemed to
beneficially own any shares of Voting Stock held by persons
beneficially owning Voting Stock representing two percent (2%)
or less of the votes entitled to be cast by the holders of all
then outstanding shares of Voting Stock and any such person
beneficially owning Voting Stock representing two percent (2%)
or less of the votes entitled to be cast by the holders of all
then outstanding shares of Voting Stock shall not be deemed a
Five Percent Holder or otherwise be entitled to exercise any
rights of a Five Percent Holder.
(viii) The term "Related Party" means, in
connection with any Related Party Transaction, any person who
at any time during the eighteen (18) month period preceding
such Related Party Transaction constituted a Significant
Holder.
(ix) The term "entire Board of
Directors" as used in this Article Twelfth and in this
Restated Certificate of Incorporation, generally, means the
total number of directors of the Corporation then holding
office and entitled to vote.
(x) The Board of Directors shall for
purposes of this Article Twelfth be entitled to rely on
information contained in the most recent disclosures filed
publicly under the Act as to (i) whether a person is a
Significant Holder, (ii) the number of shares of Capital Stock
or other securities beneficially owned by any person, and
(iii) whether a person is a Controlled or Controlling
Affiliate of another. Any such decision made in good faith on
such basis shall be conclusive. Any persons deemed Significant
Holders or Five Percent Holders solely by virtue of being a
member of a group or having a relationship with other persons,
which membership or relationship is described in disclosures
filed publicly under the Act, shall at the request of the
Corporation, select one designee to act on their behalf with
respect to any rights or obligations hereunder.
IN WITNESS WHEREOF, the corporation has caused this Restated
Certificate of Incorporation to be signed by Xxxxx Xxxxxxxxx, its Chief
Executive Officer, this ____ day of _____________, 2003.
PERSONNEL GROUP OF AMERICA,
INC.
By: _______________________
Xxxxx Xxxxxxxxx
Chief Executive Officer
