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EXHIBIT 4.1
XXXX'X COMPANIES, INC.
and
WACHOVIA BANK, N.A.
Rights Agent
_______________
Rights Agreement
Dated as of September 8, 1998
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Table of Contents
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 6
Section 3. Issue of Rights and Rights Certificates 6
Section 4. Form of Rights Certificates 7
Section 5. Countersignature and Registration 9
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights; Restriction on Transfer of Rights 10
Section 8. Cancellation and Destruction of Rights Certificates 12
Section 9. Reservation and Availability of Series A Preferred Stock 12
Section 10. Series A Preferred Stock Record Date 14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights 14
Section 12. Certificates of Adjusted Purchase Price or Number of Shares 22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power 22
Section 14. Fractional Rights and Fractional Shares 24
Section 15. Rights of Action 25
Section 16. Agreement of Rights Holders 25
Section 17. Rights Certificate Holder Not Deemed a Shareholder 26
Section 18. Concerning the Rights Agent 27
Section 19. Merger or Consolidation or Change of Name of Rights Agent 27
Section 20. Duties of Rights Agent 28
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Section 21. Change of Rights Agent 30
Section 22. Issuance of New Rights Certificates 31
Section 23. Redemption and Termination 31
Section 24. Exchange 32
Section 25. Notice of Certain Events 33
Section 26. Notices 34
Section 27. Supplements and Amendments 35
Section 28. Successors 36
Section 29. Determinations and Actions by the Board of Directors, etc. 36
Section 30. Benefits of this Agreement 36
Section 31. Severability 36
Section 32. Governing Law 37
Section 33. Counterparts 37
Section 34. Descriptive Headings 37
EXHIBIT A -- Form of Rights Certificate
EXHIBIT B -- Form of Summary of Rights
(ii)
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RIGHTS AGREEMENT
This Agreement, dated as of September 8, 1998 (the "Agreement"), between
XXXX'X COMPANIES, INC., a North Carolina corporation (the "Company"), and
WACHOVIA BANK, N.A., a national banking association organized under the laws
of the United States (the "Rights Agent"), provides as follows:
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend distribution of one Right (as hereinafter defined) for
eachoutstanding share of Common Stock of the Company to shareholders of record
at the Close of Business (as hereafter defined) on the Record Date (as
hereinafter defined) and has authorized the issuance of one Right (as such
number may hereinafter be adjusted as provided herein) for each share of
Common Stock that shall be issued between the Record Date and the earliest of
the Distribution Date, the Redemption Date or the Expiration Date (as such
terms are hereinafter defined) unless the Board of Directors provides to the
contrary before or at the time of issuance of any such Common Stock, each
Right initially representing the right to purchase one Unit of Series A
Preferred Stock, (as hereinafter defined), and being in the form of the Rights
Certificate attached hereto as Exhibit A, upon the terms and subject to the
conditions hereof (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) Acquiring Person" shall mean any Person who or which, alone
or together with all Affiliates and Associates of such Person, shall at any
time be the Beneficial Owner of either or both of (i) 15% or more of the
shares of Common Stock then outstanding or (ii) 15% or more of the Rights then
outstanding, but shall not include (a) 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 or, (b) any such Person
who has become and is such a Beneficial Owner solely because (1) of a
reduction in the aggregate number of shares of Common Stock outstanding due to
a repurchase of shares of Common Stock by the Company since the last date on
which such Person acquired Beneficial Ownership of any shares of Common Stock
or (2) it acquired such Beneficial Ownership in the good faith belief that
such acquisition would not (A) cause such Beneficial Ownership to equal or
exceed 15% of the shares of Common Stock then outstanding and such Person
relied in good faith in computing the percentage of its Beneficial Ownership
on publicly filed reports or documents of the Company
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that are inaccurate or
out-of-date or (B) otherwise cause a Distribution Date or the adjustment
provided for in Section 11(a) to occur. Notwithstanding clause (b)(2) of the
preceding sentence, if any Person that is not an Acquiring Person due to such
clause (b)(2) does not reduce its percentage of Beneficial Ownership of shares
of Common Stock to less than 15% by the Close of Business on the fifth
Business Day after notice from the Company (the date of notice being the first
day) that such Person's Beneficial Ownership of shares of Common Stock so
equals or exceeds 15%, such Person shall, at the end of such five Business Day
period, become an Acquiring Person (and such clause (b)(2) shall no longer
apply to such Person). For purposes of this definition, the determination
whether any Person acted in "good faith" shall be conclusively determined by
the Board of Directors of the Company, acting by a vote of those directors of
the Company whose approval would be required to redeem the Rights under
Section 23.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) that such Person or any of such Person's Affiliates
or Associates is deemed to "beneficially own" within the meaning of Rule 13d-3
of the General Rules and Regulations under the Exchange Act;
(ii) that 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, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be deemed to
be 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 or (B) securities issuable upon exercise of
the Rights.
(iii) that such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote, 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
(iii) 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 solicitation made
pursuant to, and in accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) the beneficial ownership
of
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such security is not also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report); or
(iv) that 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 (iii) of this paragraph (c)) or disposing of
any voting securities of the Company; provided, however, that notwithstanding
any provision of this Section 1(c), any Person engaged in business as an
underwriter of securities who acquires any securities of the Company through
such Person's participation in good faith in a firm commitment underwriting
registered under the Securities Act of 1933, as amended (the "Act"), shall not
be deemed the "Beneficial Owner" of, or to "beneficially own," such securities
until the expiration of 40 days after the date of acquisition; and provided,
further, that in no case shall an officer or director of the Company be deemed
(x) the beneficial owner of any securities beneficially owned by another
officer or director of the Company solely by reason of actions undertaken by
such persons in their capacity as officers or directors of the Company; or (y)
the beneficial owner of securities held of record by the trustee of any
employee benefit plan of the Company or any Subsidiary of the Company for the
benefit of any employee of the Company or any Subsidiary of the Company, other
than the officer or director, by reason of any influence that such officer or
director may have over the voting of the securities held in the plan.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banks in the State of North Carolina are authorized
or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
North Wilkesboro, North Carolina time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 P.M., North Wilkesboro,
North Carolina time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the common stock of the Company,
except that "Common Stock" when used with reference to any Person other than
the Company, if such Person is a corporation, shall mean the capital stock of
such Person with the greatest voting power, or the equity securities or other
equity interest in such Person having power to control or direct the
management of such Person, or any shares of capital stock or other equity
interests into which the foregoing shall be reclassified or changed.
(g) "Continuing Director" shall mean any member of the Board of
Directors of the Company, while a member of the Board, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such
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Affiliate or Associate,
and (i) who is a member of the Board on the date of this Agreement or (ii)
whose subsequent nomination for election or election to the Board was
recommended or approved by a majority of the Continuing Directors serving at
the time of such nomination or election.
(h) "Distribution Date" shall mean the earlier of (i) the close
of business on the tenth business day after the Stock Acquisition Date (as
hereinafter defined) or (ii) the close of business on the tenth business day
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 be an Acquiring Person
(irrespective of whether any shares were actually purchased pursuant to any
such offer).
(i) "Equivalent Shares" shall mean shares of Series A Preferred
Stock (as hereinafter defined) and any other class or series of capital stock
of the Company that is entitled to participate in dividends and other
distributions, including distributions upon the liquidation, dissolution or
winding up of the Company, on a proportional basis with the Common Stock. In
calculating the number of any class or series of Equivalent Shares for
purposes of Section 11 hereof, the number of shares, or fractions of a share,
of such class or series of capital stock that is entitled to the same dividend
or distribution as a whole share of Common Stock shall be deemed to be one
share.
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement, unless a
different date is otherwise specifically provided herein.
(k) "Exchange Date" shall mean the date on which the Board of
Directors authorizes the exchange of Rights for shares of Common Stock
pursuant to Section 24 hereof.
(l) "Expiration Date" shall mean the earliest of (i) the close
of business on the Final Expiration Date, or (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof, or (iii) the Exchange Date.
(m) "Final Expiration Date" shall mean September 9, 2008.
(n) "Person" shall mean any individual, firm, corporation,
partnership or other entity and any particular Person shall include any
"group" acting as described in Section 13(d)(3) of the Exchange Act.
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(o) "Purchase Price" shall have the meaning set forth in Section
4(a) hereof, as adjusted in accordance with this Agreement and as in effect
from time to time.
(p) "Record Date" shall mean the Close of Business on September
9, 1998.
(q) "Rights" shall mean the rights to purchase Series A
Preferred Stock (or other securities) as provided in this Agreement.
(r) "Rights Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(s) "Section 11(a)(ii) Event" shall mean any occurrence of the
event described in the first sentence of Section 11(a)(ii) hereof.
(t) "Section 13 Event" shall mean any event described in clause
(w), (x), (y) or (z) of Section 13(a) hereof.
(u) "Series A Preferred Stock" shall mean shares of the
Company's Participating Cumulative Preferred Stock, Series A, par value $5.00
per share.
(v) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(w) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which an amount of voting securities sufficient
to elect a majority of the directors or Persons having similar authority of
such corporation or other entity is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.
(x) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
(y) "Unit" shall mean one one-thousandth of a share of Series A
Preferred Stock.
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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 holders of Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Rights and Rights Certificates.
(a) Until the Distribution Date, (x) the Rights shall be
evidenced (subject to the provisions of paragraphs (b) and (c) of this Section
3) by the certificates for the Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by separate certificates,
and (y) the Rights shall be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to the
Company). Subject to the provisions of Section 7(e) hereof, as soon as
practicable after the Company has notified the Rights Agent of the occurrence
of a Distribution Date, the Rights Agent shall send by first-class, insured,
postage prepaid mail, to each such record holder of shares 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 A 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(n)
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 shall be evidenced
solely by such Rights Certificates.
(b) A Summary of Rights, in substantially the form attached
hereto as Exhibit B (the "Summary of Rights"), shall be sent by the Company by
first-class, postage prepaid mail, to each record holder of the Common Stock
as of the Record Date, at the address of each such holder shown on the records
of the Company. Until the Distribution Date, the Rights shall be evidenced by
such certificates evidencing 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,
the transfer of any certificates evidencing shares of Common Stock in respect
of which Rights have been issued shall also constitute, subject to the
provisions of Section 7(e) hereof, 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 the issuance (including pursuant to the exercise of rights
under the Company's benefit plans)
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of any shares of Common Stock specifies to
the contrary, Rights shall be issued in respect of all shares of Common Stock
that are issued after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates representing shares of
Common Stock outstanding prior to the Record Date that are issued upon
transfer or exchange of such Common Stock, shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement (the "Rights
Agreement") between Xxxx'x Companies, Inc. (the "Company") and
Wachovia Bank, N.A. (the "Rights Agent") the terms of which are
hereby incorporated herein by reference and a copy of which is on
file at the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder
of this certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances set forth
in the Rights Agreement, Rights that are owned or that were
previously owned by a Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate of an Acquiring Person 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
transfer of any of such certificates shall also constitute, subject to the
provisions of Section 7(e) hereof, the transfer of the Rights associated with
the Common Stock represented by such certificates.
In the event that the Company purchases or acquires any shares of Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such shares of Common Stock shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the shares of Common Stock that are no longer outstanding.
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 A 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
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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 Distribution Date, and on their face
shall entitle the holders thereof to purchase such number of Units of Series
A Preferred Stock as shall be set forth therein at the price set forth therein
(such exercise price per unit, being hereinafter referred to as 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) 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 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 that the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has a primary purpose to avoid or effects 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 an Associate of an Acquiring Person.
Accordingly, this Rights Certificate and the Rights represented
hereby may become void in the circumstances specified in Section 7(e)
of the Rights Agreement.
The Company shall notify the Rights Agent, and, if such notification is given
orally, the Company shall confirm promptly the same in writing, at such time
as the Company has notice that any Person constitutes an Acquiring Person or
an Affiliate or Associate of an Acquiring Person, and until such notice is
received by the Rights Agent the Rights Agent may conclusively presume for all
purposes that the foregoing legend need be imprinted only on Right
Certificates beneficially owned by Persons that the Company has previously
identified to the Rights Agent as constituting an Acquiring Person or an
Affiliate or Associate of an Acquiring Person and transferees of any such
Persons.
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Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chief Executive Officer, its President or any Vice President,
either manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned manually or by
facsimile by the Rights Agent and shall not be valid for any purpose unless so
countersigned. The Rights Certificates shall be countersigned by an
authorized signatory of the Rights Agent but it shall not be necessary for the
same signatory to countersign all of the Rights Certificates issued hereunder.
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 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
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 may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, (other than Rights
Certificates that have become void pursuant to Section 7(e) hereof or that
have been exchanged pursuant to Section 24 hereof) entitling the registered
holder to purchase a like number of Units of Series A Preferred Stock (or,
following a Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitle 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
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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 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 from the
holder of the Rights 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) Subject to Section 7(e) hereof, 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 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; Restriction on Transfer of Rights.
(a) Subject to Section 7(e) hereof, 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)(ii), Section
11(a)(iii), Section 13, Section 23(a), and Section 24 hereof) in whole or in
part at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such purpose, together,
except as otherwise provided in Section 11(a)(ii) hereof, with payment of the
aggregate Purchase Price with respect to the total number of Units of Series A
Preferred Stock (or Common Stock or other securities or property, as the case
may be) as to which surrendered Rights are then exercisable, at or prior to
the Expiration Date.
(b) The Purchase Price for each Unit of Series A Preferred
Stock pursuant to the exercise of a Right shall initially be $152.50 and
shall be subject to adjustment from time to time as provided in Section 11
hereof and shall be payable in accordance with paragraph (c) below.
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(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per Unit of Series A Preferred Stock (or
Common Stock, other securities or property, 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 Units of Series A
Preferred Stock (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of Units of Series A
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 Units of Series A Preferred
Stock issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of Units of Series A Preferred Stock as are to be purchased (in which
case certificates for the Units of Series A 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 (including to zero) pursuant
to Section 11(a)(iii) hereof) may 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 of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of,
the registered holder of such 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,
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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 effects the
avoidance of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure 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 its Affiliates or Associates, or any transferee
thereof, hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder 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 and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled 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 canceled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of Series A Preferred Stock.
(a) The Company represents, covenants and agrees that it has
caused to be reserved and will cause to be kept available out of its
authorized and unissued shares of Series A Preferred Stock (or, following the
occurrence of a Triggering Event, out of its authorized and unissued Series A
Preferred Stock or other securities, as the case may be), the number of shares
of Series A Preferred Stock (or such other securities) that, except as
provided in Section 11(a)(iii)
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hereof, will be sufficient from time to time to
permit the exercise in full of all outstanding Rights and all Rights that are
at the time issuable, in accordance with the provisions of this Agreement.
(b) So long as the shares of Series A Preferred Stock (and,
following the occurrence of a Triggering Event, any 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.
(c) The Company shall use its best efforts (i) to 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)(ii) and (iii) hereof, or as soon as is required by law following
the Distribution Date, as the case may be, a registration statement under the
Act on an appropriate form, with respect to the securities purchasable upon
exercise of the Rights, (ii) to cause such registration statement to become
effective as soon as practicable after such filing, and (iii) to cause such
registration statement to remain effective (with a prospectus at all times
meeting 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
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to exceed ninety
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, and notify
the Rights Agent, that the exercisability of the Rights has been temporarily
suspended. The Company shall also issue a public announcement at such time as
the suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have been obtained.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Series A Preferred
Stock (or other securities, as the case may be) delivered upon exercise of the
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly authorized, validly
issued, fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
that may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for shares of Series A Preferred Stock
(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 that may be
payable in respect
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of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of a number of shares of Series
A Preferred Stock (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 shares of Series A Preferred Stock (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 Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Series A Preferred Stock Record Date. Each person in whose
name any certificate for a number of Units of Series A Preferred Stock (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
Units of Series A Preferred Stock (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 Series A Preferred Stock (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
such transfer books are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate as such shall not be entitled to
any rights of a shareholder 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, and 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 Series A Preferred Stock
payable in shares of Series A Preferred Stock, (B) subdivide the outstanding
Series A Preferred Stock, (C) combine the outstanding Series A Preferred Stock
into a smaller number of shares, or (D) issue any shares of its capital stock
in a reclassification of the Series A 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), 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 Series A Preferred Stock or the number and kind of shares of other
capital stock, as the 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
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aggregate number of shares of Series A Preferred Stock or the
number and kind of shares of other capital stock, as the case may be, that, if
such Right had been exercised immediately prior to such date and at a time
when the Series A Preferred Stock transfer books of the Company were open, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. If an event
occurs that 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 23 and Section 24 hereof, in the
event any Person becomes an Acquiring Person, then, proper provision shall be
made by the Company so that each record holder of each Right (except as
provided in Section 7(e) hereof) shall thereafter have the right to receive,
upon exercise thereof for the Purchase Price in accordance with terms of this
Agreement, such number of Units of Series A Preferred Stock (or, in lieu of
Series A Preferred Stock, at the option of the Company and to the extent
available, such number of shares of Common Stock) as shall equal the result
obtained by multiplying the Purchase Price by a fraction, the numerator of
which is the number of Units of Series A Preferred Stock for which a Right is
then exercisable and the denominator of which is 50% of the current market
price of a share of Common Stock (determined pursuant to Section 11(d) hereof)
on the date of the first occurrence of a Section 11(a)(ii) Event (such result
being hereinafter referred to as the "Adjustment Shares").
(iii) To the extent that the number of shares of Series A
Preferred Stock that are authorized by the Company's articles of incorporation
but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of this Section
11(a), and subject to such limitations as are necessary to prevent a default
under any agreement for money borrowed as presently constituted to which the
Company is a party and subject to any limitations contained in any applicable
law, the Company shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value"),
over (2) the Purchase Price (such excess being hereinafter referred to as the
"Spread"), and (B) with respect to each Right, make adequate provision to
substitute for such unavailable Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) other equity securities of the Company, (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having,
together with the Adjustment Shares issued upon exercise of such Right, an
aggregate value equal to the Current Value, where such aggregate value has
been determined by the Board of Directors of the Company based upon the advice
of a nationally recognized investment banking firm selected by the Board of
Directors of the Company; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above within
30 days following the first occurrence of a Section 11(a)(ii) Event, then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of preferred
stock of the Company or Common Stock (to the extent such securities are
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available) and then, if necessary, cash, which securities and/or assets in the
aggregate are equal to the Spread. If the Board of Directors of the Company
shall determine in good faith that it is likely that sufficient additional
shares of preferred stock of the Company or Common Stock could be authorized
for issuance upon exercise in full of the Rights, the 30 day period set forth
above may be extended to the extent necessary, but not more than 90 days
following the first occurrence of a Section 11(a)(ii) Event, in order that the
Company may seek shareholder approval for the authorization of such additional
shares (such period, as it may be extended, the "Substitution Period"). To
the extent that the Company determines that some action need be taken pursuant
to the first and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence
and to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Stock shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share of the Common
Stock on the date of the first occurrence of a Section 11(a)(ii) Event.
(b) If at any time after the date of this Agreement the Company
shall fix a record date for the issuance of rights, options or warrants to all
holders of Common Stock or of any class or series of Equivalent Shares
entitling such holders (for a period expiring within 45 calendar days after
such record date) to subscribe for or to purchase Common Stock or Equivalent
Shares (or securities convertible into Common Stock or Equivalent Shares) at a
price per share (or having a conversion price per share, if a security
convertible into Common Stock or Equivalent Shares) less than the current
market price of such Common Stock or Equivalent Shares on such record date,
then, in each such case, each Right outstanding immediately prior to such
record date shall thereafter evidence the right to purchase, for the Purchase
Price, that number of Units of Series A Preferred Stock or Equivalent Shares
obtained by multiplying the number of Units of Series A Preferred Stock
issuable upon exercise of a Right immediately prior to such record date by a
fraction, the numerator of which shall be the total number of shares of Common
Stock and Equivalent Shares (if any) outstanding on such record date plus the
number of additional shares of Common Stock and Equivalent Shares (if any) to
be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible) and the denominator of
which shall be the total number of shares of Common Stock and Equivalent
Shares (if any) outstanding on such record date plus the number of shares of
Common Stock or Equivalent Shares, as the case may be, that the aggregate
offering price of the total number of shares of Common Stock or Equivalent
Shares, as the case may be, 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. In case such subscription price may be
paid in a consideration, part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent. Common
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Stock and Equivalent
Shares owned by or held for the account of the Company or any Subsidiary of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants
are not so issued, each Right shall be adjusted to evidence the right to
receive that number of Units of Series A Preferred Stock that such Right would
have entitled the holder to receive, for the Purchase Price, if such record
date had not been fixed.
(c) If at any time after the date of this Agreement the Company
shall fix a record date for the making of a distribution to all holders of
Common Stock or of any class or series of Equivalent Shares (including any
such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of cash (other than a
regular quarterly cash dividend of the Company in compliance with any
applicable law), evidences of indebtedness, assets, securities (other than
Common Stock or any Equivalent Shares) or subscription rights, options or
warrants (excluding those referred to in Section 11(b) hereof), then, in each
such case, each Right outstanding immediately prior to such record date shall
thereafter evidence the right to purchase, for the Purchase Price, that number
of Units of Series A Preferred Stock obtained by multiplying the number of
Units of Series A Preferred Stock issuable upon exercise of a Right
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price of a share of Common Stock or an Equivalent
Share on the record date and the denominator of which shall be the current
market price of a share of Common Stock or an Equivalent Share on such record
date less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, evidences
of indebtedness, assets or securities so to be distributed or of such
subscription rights, options or warrants applicable to a share of Common Stock
or an Equivalent Share, as the case may be. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, each Right shall be adjusted to evidence the
right to receive that number of Units of Series A Preferred Stock that such
Right would have entitled the holder to receive, for the Purchase Price, 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 30
consecutive Trading Days (as such term is hereinafter defined) 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 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 prior to the expiration of the
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requisite 30 Trading Day or
ten Trading Day period, as set forth above, after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, 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 quoted on the Nasdaq Stock
Market, as reported by the National Association of Securities Dealers, Inc.
("Nasdaq") or such other quotation 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 of
Directors of the Company. 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 of Directors of the Company 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 value
per share 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 conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Series A Preferred Stock shall be
determined in the same manner as set forth above for the Common Stock in
Section 11(d)(i) hereof (other than the last sentence thereof). If the
current market price per share of Series A Preferred Stock cannot be
determined in the manner provided above or if the Series A 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 Series A Preferred
Stock shall be conclusively deemed to be an amount equal to 1000 (as such
number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock and Series A
Preferred 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 Series A Preferred Stock is publicly held or so listed or
traded, "current market price" per share of the Series A Preferred Stock shall
mean the fair value per share 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 conclusive for all
purposes. For all purposes of this Agreement, the "current market price" of
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one one-thousandth of a share of Series A Preferred Stock shall be equal to
the "current market price" of one share of Series A Preferred Stock divided by
1000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the number of Units of Series A Preferred Stock for which a
Right is exercisable or in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one percent in
such number of shares or in the Purchase Price; provided, however, that any
adjustments that 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 Unit of Series A 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 years from the date of the transaction that mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) or 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Series A
Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and, if required, 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 Series A
Preferred Stock contained in Section 11(a), (b), (c), (e), (g), (h), (i), (k
and (l) hereof, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Series A 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 number or kind of shares purchasable upon exercise of
the Rights or to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the adjusted number of Units of
Series A Preferred Stock or other securities 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 below in this Section 11(h), upon each adjustment of the Purchase
Price as a result of the calculations made in Section 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of Units of Series A Preferred Stock obtained by (i) multiplying
(x) the number of Units of Series A Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment of the
Purchase Price. On or after the date of any adjustment of the Purchase Price,
in lieu of any adjustment in the number of Units of Series A Preferred Stock
or any other capital stock purchasable upon the exercise of a Right, the
Company may elect to adjust the number of Rights. Each of the Rights
outstanding after the adjustment in the number of Rights shall be exercisable
for the number of Units of Series A Preferred Stock for which a Right was
exercisable immediately prior to such
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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 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(h), 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 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.
(i) Irrespective of any adjustment or change in the Purchase
Price or the number of Units of Series A Preferred Stock or the number and
kind of other securities issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per Unit, the number of Units and the other terms that were
expressed in the initial Rights Certificates issued hereunder.
(j) In any case in which this Section 11 shall require that an
adjustment be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date of the number of
Units of Series A Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of
Units of Preferred Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise before giving effect 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.
(k) 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 its 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 Series A Preferred Stock, (ii) issuance wholly for cash of
any
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shares of Series A Preferred Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Series A Preferred Stock or
securities that by their terms are convertible into or exchangeable for shares
of Series A Preferred Stock, (iv) stock dividend or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Series A Preferred Stock shall not be taxable to
such shareholders.
(l) 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 that complies with Section
11(m) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(m)
hereof), (iii) effect a statutory share exchange with any Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(m)
hereof), or (iv) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(m) hereof), if at the time
of or immediately after such consolidation, merger, statutory share exchange
or sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(m) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 27 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.
(n) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Record 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 Common Stock, or (iii) combine the outstanding 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 of which shall be the 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.
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Section 12. Certificates of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 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
Series A Preferred Stock or the Common Stock, a copy of such certificate, and
(c) 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 25 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 or
Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (w) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(m) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or
merger, (x) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(m) 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 securities of any
other Person or cash or any other property, (y) the Company shall be a party
to a statutory share exchange with any other Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(m) hereof) after
which the Company is a Subsidiary of any other Person, or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
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(m) hereof),
then, and in each such case, proper provision shall be made so that: (i) each
record 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, nonassessable and freely
tradable shares of Common Stock of the Principal Party (as 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 shares of Common
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 shares 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), 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 for all purposes of this
Agreement) by 50% of the current market price
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(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; and (ii) such Principal
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 ensure 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
(w), (x) or (y) of the first sentence of Section 13(a) hereof, the Person that
is the issuer of any securities into which shares of Common Stock of the
Company are converted in such merger, consolidation or statutory share
exchange, and if no securities are so issued, the Person that is the other
party to such merger, consolidation or statutory share exchange; and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act, 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 Stocks 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, statutory share exchange, sale or transfer unless the Principal Party
shall have a sufficient number of authorized shares of its Common Stock that
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
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this Section 13 and further providing that, as soon
as practicable after the date of any consolidation, merger, statutory share
exchange 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 on an appropriate form 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 similarly comply with applicable state securities laws;
and
(ii) deliver to record holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates that
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 statutory share exchanges 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 that have not theretofore
been exercised shall thereafter become exercisable in the manner described in
Section 13(a) hereof.
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(n)
hereof, or to distribute Rights Certificates that evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid 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
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 on the Nasdaq
Stock 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
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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 Series A Preferred Stock (other than fractions that are integral
multiples of one one-thousandth of a share of Series A Preferred Stock) upon
exercise of the Rights or to distribute certificates that evidence fractional
shares of Series A Preferred Stock (other than in such integral multiples).
In lieu of fractional shares of Series A Preferred Stock that are not in such
integral multiples, 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-thousandth of a share of Series A Preferred Stock. For purposes of this
Section 14(b), the current market value of one one-thousandth of a share of
Series A Preferred Stock shall be one one-thousandth of the current market
price of a share of Series A Preferred Stock (as determined pursuant to
Section 11(d) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Right 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 in respect of which Rights have been issued); and any
registered holder of any Rights Certificate (or, prior to the Distribution
Date, of such 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
such 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 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:
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(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 Certificate 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, subject to the last sentence of Section
7(e) hereof, nor the Rights Agent 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 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 Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Units of Series A
Preferred Stock or any other securities of the Company that 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 shareholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
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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 and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability 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, instruction, 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 business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
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
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Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
and the determination of "current market price") be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, any Vice-Chairman, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; 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
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 be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof
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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 Series A Preferred Stock to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Series A Preferred Stock
will, when so issued, be duly authorized, validly issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman, the President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any such officer.
At any time the Rights Agent may apply to the Company for written instructions
with respect to any matter arising in connection with the Rights Agent's
duties and obligations arising under this Agreement. Such application by the
Rights Agent for written instructions from the Company may, at the option of
the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent with respect to its duties or obligations under
this Agreement and the date on and/or after which such action shall be taken
and the Rights Agent shall not be liable for any action taken or omitted in
accordance with a proposal included in any such application on or after the
date specified therein (which date shall be not less than one Business Day
after the Company receives such application, without the Company's consent)
unless, prior to taking or initiating any such action, the Rights Agent has
received written instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company.
(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
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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 of transfer without first consulting with
the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days notice in writing mailed to the Company, and to each transfer
agent of the Series A Preferred Stock or Common Stock, by registered or
certified mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Series A Preferred Stock or Common Stock, by registered or certified mail, and
to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder
of any Rights Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or the State of North
Carolina (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the State
of North Carolina), in good standing, having an office in the State of North
Carolina, that is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority and that has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the
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Common Stock, and mail
a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, 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 its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, the Company
may, 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 the issuance or sale of shares of Common Stock
following the Distribution Date.
Section 23. Redemption and Termination.
(a) (i) The Company may, at its option, at any time prior
to the earlier of (A) the close of business on the tenth day following the
Stock Acquisition Date, or (B) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights (which shall not include any rights
that have become void pursuant to Section 7(e) hereof) at a redemption price
of $.001 per Right, as it may be appropriately adjusted by the Board of
Directors of the Company to reflect any stock split or combination, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price") and
the Company may, at its option, pay the Redemption Price either in shares of
Common Stock (based on the current market price (as determined pursuant to
Section 11(d) hereof) per share of the Common Stock at the time of redemption)
or cash; provided, however, that if the Board of Directors of the Company
authorizes redemption of the Rights in either of the circumstances set forth
in clauses (x) and (y) below, then there must be Continuing Directors in
office and such authorization shall require the concurrence of a majority of
such Continuing Directors: (x) such authorization occurs on or after the date
a Person becomes an Acquiring Person, or (y) such authorization occurs on or
after the date of a change (resulting from a proxy solicitation) in a majority
of the directors in office at the commencement of such solicitation if any
Person who is a participant in such solicitation has stated (or, if upon the
commencement of such solicitation, a majority of the Board of Directors of the
Company has determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider taking, any action
that would result in such Person becoming an Acquiring Person or that would
cause the occurrence of a Triggering Event.
(ii) In addition, if there are Continuing Directors then
in office, the Board of Directors may redeem all, but not less than all, of
the then outstanding Rights at the Redemption Price with the concurrence of a
majority of such Continuing Directors, following the
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occurrence of a Stock
Acquisition Date and following the expiration of the right of redemption
hereunder, if either (A)(1) a Person who is an Acquiring Person shall have
transferred or otherwise disposed of a number of shares of Common Stock in one
transaction or a series of transactions not directly or indirectly involving
the Company or any of its Subsidiaries, such that such Person is thereafter a
Beneficial Owner of less than 15% of the outstanding shares of Common Stock
and (2) there are no other Persons, immediately following the occurrence of
the event described in clause (1), who are Acquiring Persons, or (B) in
connection with the type of transaction specified in Section 13(a) hereof in
which all holders of Common Stock are treated alike and not involving an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or any
other Person in which such Acquiring Person, Affiliate or Associate has any
interest, or any other Person acting directly or indirectly on behalf of or in
association with any such Acquiring Person, Affiliate or Associate.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Triggering
Event until such time as the Company's right of redemption hereunder is not
exercisable.
(b) Immediately upon the action of the Board of Directors of the
Company authorizing the redemption of the Rights pursuant to subsection (a) of
this Section 23 and without any further action and without any notice, the
right to exercise the Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the action of the Board of Directors
authorizing the redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and to the holders of such 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 that is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption shall state the method by which the payment of the Redemption
Price will be effected.
Section 24. Exchange.
(a) The Company may, at its option, by resolution of its Board
of Directors, 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 Section 7(e)
hereof) for shares of 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 with respect to the Common Stock
after the date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"); provided, however, under the circumstances described in
the proviso to Section 23(a)(i) hereof, an Exchange shall be effective only if
there are Continuing Directors and shall require the concurrence of a majority
of such Continuing Directors.
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(b) Immediately upon the action of the Board of Directors of the
Company authorizing the exchange of the Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise the Rights will 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 Rights held by such holder multiplied by the
Exchange Ratio. Promptly after the action of the Board of Directors
authorizing the exchange of the Rights, the Company shall give notice of such
exchange to the Rights Agent and to the holders of such 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
that is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state
the method by which the exchange of the shares of Common Stock for Rights will
be effected.
(c) In the event that there shall not be sufficient shares of
Common Stock authorized but unissued to permit the exchange in full of such
Rights 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. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional shares of Common Stock, the Company shall
substitute, for each share of Common Stock that would otherwise be issuable
upon exchange of a Right, a number of shares of other equity securities of the
Company or fraction thereof such that the current per share market price of
one share of such other equity securities multiplied by such number or
fraction is equal to the current per share market price of one share of Common
Stock as of the date of issuance of such shares of such other equity
securities or fraction thereof.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates that 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 Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this subsection
(d), the current market value of a whole share of Common Stock shall be the
closing price of a share of Common Stock (as determined pursuant to Section
11(d) hereof) for the Trading Day immediately prior to the Exchange Date.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Series A Preferred Stock or to make any other distribution to
the holders of Series A Preferred Stock (other than a regular quarterly cash
dividend of the Company in compliance with any applicable law), or (ii) to
offer
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43
to the holders of Series A Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Series A Preferred Stock
or shares of stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Series A Preferred Stock (other
than a reclassification involving only the subdivision of outstanding shares
of Series A 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 that complies with Section 11(m) hereof), or to effect a statutory
share exchange with any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(m) 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 or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or Persons (other
than a Subsidiary of the Company in one or more transactions each of which
complies with Section 11(m) 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 26 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, statutory share exchange, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Series A
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
20 days prior to the record date for determining holders of the shares of
Series A Preferred Stock for purposes of such action, and in the case of any
such other action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Series A Preferred Stock whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event 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 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the preceding paragraph
to Series A Preferred Stock shall be deemed thereafter to refer, if
appropriate, not only to Series A Preferred Stock but also to Common Stock or
other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any 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 with the Rights Agent) as follows:
Xxxx'x Companies, Inc.
Xxxxxxx 000 Xxxx
Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Corporate Secretary
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44
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any 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 with the Company) as
follows:
Wachovia Bank, N.A.
Corporate Trust Department
000Xxxxx Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Shareholder Services Department
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.
Section 27. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 27, the Company may,
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 penultimate sentence of this Section 27,
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 that may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period
hereunder (which lengthening or shortening, under the circumstances described
in the proviso to Section 23(a)(i) hereof, shall be effective only if there
are Continuing Directors and shall require the concurrence of a majority of
such Continuing Directors), or (iv) to change or supplement the provisions
hereunder in any manner that the Company may deem necessary or desirable and
that 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); provided, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment. No
supplement or amendment shall be made that changes the Redemption Price, the
Final Expiration Date, the Purchase Price or the number of shares of Common
Stock for which a Right is exercisable; provided, however, that at any time
prior to the Distribution Date, the Board of Directors of the Company may
amend this Agreement to increase
35
45
the Purchase Price or extend the Final
Expiration Date. 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.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common 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
(and, where specifically provided for herein, the Continuing Directors) shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board, or the
Company (or, where specifically provided for herein, the Continuing
Directors), or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board (or, where specifically provided for
herein, by the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board or the Continuing
Directors to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent,
the registered holders from time to time 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; and this
Agreement shall be for the sole and exclusive benefit of the Company and the
Persons specified above.
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; 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
36
46
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 day following the date of such
determination by the Board of Directors.
Section 32. 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 North Carolina 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 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
XXXX'X COMPANIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Chairman of the Board, President and Chief
Executive Officer
WACHOVIA BANK, N.A.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
38
48
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 9, 2008, OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY. THE COMPANY, AT ITS OPTION, MAY REDEEM THE RIGHTS EVIDENCED
BY THIS CERTIFICATE AT A REDEMPTION PRICE OF $.001 PER RIGHT OR EXCHANGE THE
RIGHTS FOR SHARES OF COMMON STOCK 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 AN ASSOCIATE
OF AN ACQUIRING PERSON. ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF THE RIGHTS AGREEMENT.
Rights Certificate
This certifies that ________________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of September 8, 1998 (the "Rights Agreement"),
between Xxxx'x Companies, Inc., a North Carolina corporation (the "Company"),
and Wachovia Bank, N.A., a national banking association organized and existing
under the laws of the United States (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 P.M. (North Wilkesboro, North Carolina time)
on September 9, 2008 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 (a "Unit") of Series C Junior Participating
Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock") or
other securities of the Company, at a purchase price of $_____ per Unit (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate duly executed.
(All capitalized terms not defined herein shall have the meaning set forth in
the Rights Agreement.) The Purchase Price may be paid in cash or by certified
bank check or bank draft payable to the order of the Company. 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
$152.50, based on the Series A Preferred Stock as constituted at such date.
A-1
49
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Series A Preferred Stock or other securities that 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. Under certain circumstances specified in Section 7(e)
of the Rights Agreement, Rights that are or were owned by an Acquiring Person
or an Affiliate or Associate of an Acquiring Person may become null and void
and no longer exercisable by any Person (including any subsequent transferee).
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 or the Secretary of the Corporation.
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 Units of Series A Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
then entitle 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 Company, at its
option, may redeem the Rights evidenced by this Certificate at a redemption
price of $.001 per Right or exchange the Rights for shares of Common Stock.
No fractional shares of Series A Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions that
are integral multiples of one one-hundredth of a share of Series A Preferred
Stock), 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 Series A
Preferred Stock or of any other securities of the Company that may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a shareholder of the Company or any right to vote for the
A-2
50
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this 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.
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of ___________ __, ______
[SEAL]
ATTEST: XXXX'X COMPANIES, INC.
________________________________ By: ____________________________________
Secretary Name: ____________________________
Title: ____________________________
A-3
51
Countersigned:
[RIGHTS AGENT]
By __________________________
Authorized Signature
A-4
52
[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:
A-5
53
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:
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.
A-6
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: XXXX'X COMPANIES, INC.:
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Rights Certificate to purchase the shares of Series A
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person that may be issuable upon the
exercise of the Rights) and requests that certificates for such shares (or
other securities) 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)
______________________________________________________________________________
(Please print name and address)
Date: _______________, ____
________________________________
Signature
Signature Guaranteed:
A-7
55
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.
A-8
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EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE SERIES A PREFERRED STOCK
The Board of Directors of Xxxx'x Companies, Inc., a corporation organized
under the laws of North Carolina (the "Company"), has approved a Rights
Agreement, dated as of September 8, 1998 and to be effective on September 9,
1998 (the "Rights Agreement") between the Company and Wachovia Bank, N.A., as
Rights Agent, having the principal terms summarized below. In accordance with
the Rights Agreement, the Board also declared a dividend distribution of one
Right for each outstanding share of common stock (the "Common Stock"), of the
Company to shareholders of record at the close of business on September 9,
1998 (the "Record Date").
Each Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of the Company's Participating Cumulative
Preferred Stock, Series A, ("Series A Preferred Stock"). Each one one-
thousandth of a share (a "Unit") of Series A Preferred Stock is structured to
be the equivalent of one share of Common Stock of the Company ("Common
Stock"). Shareholders will receive one Right per share of Common Stock held
of record at the close of business on the Record Date. The exercise price of
the Right will be $152.50 subject to adjustment (the "Purchase Price").
Rights will also attach to shares of Common Stock issued after the Record
Date but prior to the Distribution Date unless the Board of Directors
determines otherwise at the time of issuance. The description and terms of
the Rights are set forth in the Rights Agreement.
The Rights will be appurtenant to the shares of Common Stock and will be
evidenced by Common Stock certificates, and no separate certificates
evidencing the Rights (the "Rights Certificates") will be distributed
initially. The Rights will separate from the Common Stock and a distribution
of the Rights Certificates will occur (the "Distribution Date") upon the
earlier of (i) 10 business days following a public announcement that a person
or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of Common Stock (the "Stock Acquisition Date"),
or (ii) 10 business days following the commencement of a tender offer or
exchange offer that would result in a person or group beneficially becoming an
Acquiring Person. 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) any Common Stock certificates
issued 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 certificates.
B-1
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The Rights are not exercisable until the Distribution Date and will
expire at the close of business on September 9, 2008, unless 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 such separate Rights Certificates alone will represent the Rights.
The Agreement provides that if any person becomes an Acquiring Person,
proper provision shall be made so that each holder of a Right (except as set
forth below) will thereafter have the right to receive, upon exercise and
payment of the Purchase Price, Series A Preferred Stock or, at the option of
the Company, Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to twice the amount of
the Purchase Price.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger, statutory share exchange, or other
business combination in which the Company is not the surviving corporation, or
(ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except as set forth below) shall
thereafter have the right to receive, upon exercise and payment of the
Purchase Price, common stock of the acquiring company having a value equal to
twice the Purchase Price. The events set forth in this paragraph and in the
immediately preceding paragraph are referred to as the "Triggering Events."
Upon the occurrence of a Triggering Event that entitles Rights holders to
purchase securities or assets of the Company, Rights that are or were owned by
the Acquiring Person, or any affiliate or associate of such Acquiring Person,
on or after such Acquiring Person's Stock Acquisition Date shall be null and
void and shall not thereafter be exercised by any person (including subsequent
transferees). Upon the occurrence of a Triggering Event that entitles Rights
holders to purchase common stock of a third party, or upon the authorization
of an Exchange, Rights that are or were owned by any Acquiring Person or any
affiliate or associate of any Acquiring Person on or after such Acquiring
Person's Stock Acquisition Date shall be null and void and shall not
thereafter be exercised by any person (including subsequent transferees).
The Purchase Price payable, and the number of shares of Series A
Preferred Stock, Common Stock or other securities or property issuable upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution.
At any time after any person becomes an Acquiring Person, the Company may
exchange all or part of the Rights (except as set forth below) for shares of
Common Stock (an "Exchange") at an exchange ratio of one share per Right, as
appropriately adjusted to reflect any stock split or similar transaction.
B-2
58
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.001
per Right (the "Redemption Price"). Under certain circumstances set forth in
the Rights Agreement, the decision to make an Exchange or to redeem the Rights
shall require the concurrence of a majority of the Continuing Directors (as
defined below). Additionally, the Company may thereafter but prior to the
occurrence of a Triggering Event redeem the Rights in whole, but not in part,
at the Redemption Price provided that such redemption is incidental to a
merger or other business combination transaction involving the Company that is
approved by a majority of the Continuing Directors, does not involve an
Acquiring Person, and in which all holders of Common Stock are treated alike.
After the redemption period has expired, the Company's right of redemption may
be reinstated if an Acquiring Person reduces his beneficial ownership to less
than 15% of the outstanding shares of Common Stock in a transaction or series
of transactions not involving the Company. Immediately upon the action of the
Board ordering redemption of the Rights, with, where required, the concurrence
of the Continuing Directors, the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
The term "Continuing Directors" means any member of the Board who was a
member of the Board immediately before the adoption of the Rights Agreement,
and any person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing Directors, but does
not include an Acquiring Person, or an affiliate or associate of an Acquiring
Person, or any representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder 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 shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Series A Preferred Stock (or other
consideration) of the Company or for common stock of the acquiring company as
set forth above.
Other than certain provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by
the Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board (in certain
circumstances, only with the concurrence of the Continuing Directors) in order
to cure any ambiguity, to make certain other changes that do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, no amendment to adjust the time period governing
redemption may be made at such time as the Rights are not redeemable.
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