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EXHIBIT 99.1
RIGHTS AGREEMENT
between
SUN COMMUNITIES, INC.
and
STATE STREET BANK AND TRUST COMPANY, as Rights Agent
Dated as of
April 24, 1998
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions...........................................1
Section 2. Appointment of Rights Agent...................................5
Section 3. Issue of Right Certificates...................................5
Section 4. Form of Right Certificates....................................6
Section 5. Countersignature and Registration.............................7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates..................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights........................................................8
Section 8. Cancellation and Destruction of Right Certificates...........10
Section 9. Reservation and Availability of Shares of Capital Stock......10
Section 10. Preferred Stock Record Date..................................11
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights....................................................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares...19
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power................................................19
Section 14. Fractional Rights and Fractional Shares......................20
Section 15. Rights of Action.............................................21
Section 16. Agreement of Right Holders...................................22
Section 17. Right Certificate Holder Not Deemed a Stockholder............22
Section 18. Concerning the Rights Agent..................................22
Section 19. Merger or Consolidation or Change of Name of Rights Agent....23
Section 20. Duties of Rights Agent.......................................23
Section 21. Change of Rights Agent.......................................25
Section 22. Issuance of New Right Certificates...........................26
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Page
Section 23. Redemption and Termination...................................26
Section 24. Exchange.....................................................27
Section 25. Notice of Certain Events.....................................28
Section 26. Notices......................................................29
Section 27. Supplements and Amendments...................................29
Section 28. Successors...................................................30
Section 29. Determinations and Actions by the Board of Directors.........30
Section 30. Benefits of this Agreement...................................30
Section 31. Severability.................................................30
Section 32. Governing Law................................................31
Section 33. Counterparts.................................................31
Section 34. Descriptive Headings.........................................31
EXHIBIT A Articles Supplementary, Description and Certain Terms
of Participating Preferred Stock............................A-1
EXHIBIT B Form of Right Certificate...................................B-1
EXHIBIT C Summary of Rights to Purchase Preferred Stock...............C-1
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RIGHTS AGREEMENT
This Rights Agreement is entered into as of April 24, 1998 between Sun
Communities, Inc., a Maryland corporation (the "Company"), and State Street Bank
and Trust Company, a Massachusetts trust company (the "Rights Agent").
RECITAL
A. The Company's Board of Directors on April 24, 1998 (the "Rights
Dividend Declaration Date") authorized and declared a dividend distribution (the
"Distribution") of one Right for each share of the Common Stock, $0.01 par
value, of the Company (the "Common Stock") outstanding at the close of business
on June 8, 1998 (the "Record Date") and has authorized and directed the issuance
of one Right (as such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p) hereof) in respect of each share of Common Stock
issued (whether originally issued or delivered from the Company's treasury
stock) between the Record Date and the earlier of the Distribution Date or the
Expiration Date (as such terms are hereinafter defined), each Right initially
representing the right to purchase, under certain circumstances, one
one-hundredth of a share of Junior Participating Preferred Stock of the Company
having the rights, powers and preferences set forth in the Articles
Supplementary attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (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, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of securities of the Company constituting a Substantial Block, but shall not
include (i) the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any Person
reorganized, appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such plan, (ii) any Person who or
which, together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of a Substantial Block solely as a result of a change in the
aggregate number of shares of Voting Stock outstanding since the last date on
which such Person acquired Beneficial Ownership of any shares of the Voting
Stock constituting all or a portion of such Substantial Block; and (iii) any
Person who or which, together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of a Substantial Block in the good faith belief
that such acquisition would not (x) cause such Person and its Affiliates and
Associates to become the Beneficial Owner of a Substantial Block and such Person
relied in good faith in computing the percentage of its voting power on publicly
filed reports or documents of the Company which are inaccurate or out-of-date or
(y) otherwise cause a Distribution Date or the adjustment provided for in
Section 11(a) to occur. Notwithstanding clause (ii) or (iii) of the prior
sentence, if any Person that is not an Acquiring Person due to such clause (ii)
or (iii) does not cease to be the Beneficial Owner of a Substantial Block 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 is the Beneficial Owner of
a Substantial Block, such Person shall, at the end of such five Business Day
period, become an Acquiring Person (and such clause (ii) or (iii) 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
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directors of the Company whose approval would be required to redeem the Rights
under Section 23.
(b) "Act" shall have the meaning set forth in Section 9(c) hereof.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date hereof.
(e) "Agreement" shall have the meaning set forth in the introduction
hereto.
(f) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates
has, directly or indirectly, the right to acquire (whether such right
is exercisable immediately or only after the passage of time or upon
the occurrence of an event) 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 the
"Beneficial Owner" of, or to "beneficially own," (1) 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, (2) securities
issuable upon exercise of Rights at any time prior to the occurrence of
a Triggering Event or (3) securities issuable upon exercise of Rights
from and after the occurrence of a Triggering Event, which Rights were
acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a)
hereof ("Original Rights") or pursuant to Section 11(i) or Section 22
hereof in connection with an adjustment made with respect to Original
Rights; or
(ii) which such Person or any of such Person's Affiliates or Associates
has, directly or indirectly, the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under
this subparagraph (ii) if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (f)) or disposing of any securities
of the Company. Notwithstanding the foregoing, nothing contained in
this definition shall cause a Person ordinarily engaged in business as
an underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially
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own," any securities acquired in a bona fide firm commitment
underwriting pursuant to an underwriting agreement with the Company.
(g) "Business Day" shall mean any day other than a Saturday, Sunday, or
a day on which banking institutions in the state in which the Rights Agent is
located are authorized or obligated by law or executive order to close.
(h) "Certification" shall have the meaning set forth in Section 18
hereof.
(i) "Close of business" on any given date shall mean 5:00 P.M., Boston
time, on such date, provided, however, if such date is not a Business Day it
shall mean 5:00 P.M., Boston time, on the next succeeding Business Day.
(j) "Common Stock" when used with reference to the Company shall mean
the Common Stock, $0.01 par value, of the Company. "Common Stock" when used with
reference to any Person other than the Company shall mean either the capital
stock with the greatest voting power of such other Person or, if such Person is
a Subsidiary of another Person, the equity securities or other equity interest
having power to control or direct the management of such Person.
(k) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Company" shall have the meaning set forth in the introduction
hereto.
(m) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(n) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(o) "Distribution" shall have the meaning set forth in the recitals
hereto.
(p) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(q) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
(r) "Exchange Act" shall have the meaning set forth in the definitions
of "Affiliate" and "Associate" above.
(s) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(t) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(u) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(v) "Independent Director" shall mean any member of the Board of
Directors of the Company, while such person is a member of the Board, who is not
an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative or nominee of an Acquiring Person or of any such Affiliate or
Associate and either (i) was a member of the Board on the date hereof, or (ii)
was recommended or elected to succeed the Independent Director by a majority of
the Independent Directors.
(w) "Original Rights" shall have the meaning set forth in the
definition of "Beneficial Owner" above.
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(x) "Person" shall mean any individual, firm, corporation, partnership
or other entity.
(y) "Preferred Stock" shall mean the shares of Junior Participating
Preferred Stock, par value $0.01 per share, of the Company.
(z) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(aa) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(bb) "Record Date" shall have the meaning set forth in the recitals
hereto.
(cc) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(dd) "Rights" shall have the meaning set forth in the recitals hereto.
(ee) "Rights Agent" shall have the meaning set forth in the
introduction hereto.
(ff) "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
(gg) "Rights Dividend Declaration Date" shall have the meaning set
forth in the recitals hereto.
(hh) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(ii) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(jj) "Section 13 Event" shall mean any event described in Section 13(a)
hereof.
(kk) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, includes 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.
(ll) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(mm) "Subsidiary" shall mean, with reference to any Person, any
corporation (or other entity) of which an amount of voting securities (or
comparable ownership interests) sufficient to elect at least a majority of the
directors (or comparable individuals) of such corporation (or other entity) is
beneficially owned or otherwise controlled, directly or indirectly, by such
Person.
(nn) "Substantial Block" shall mean a number of shares of the Voting
Stock which has 15% or more of the aggregate voting power of all outstanding
shares of Voting Stock.
(oo) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(pp) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(qq) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
(rr) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
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(ss) "Voting Stock" shall mean the outstanding shares of Common Stock,
$0.01 par value, and any other shares of capital stock of the Company which are
entitled to vote generally in the election of directors.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company shall act as Co-Rights Agent and may from time to time appoint such
other Co-Rights Agents as it may deem necessary or desirable upon ten calendar
days' written notice to the Rights Agent. In no event shall the Rights Agent
have any duty to supervise or in any way be liable for the acts or omissions of
such Co-Rights Agents.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth
calendar day after the Shares Acquisition Date (or, if the tenth calendar day
after the Shares Acquisition Date occurs before the Record Date, the close of
business on the Record Date) or (ii) the close of business on the tenth calendar
day (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement of, or first public announcement of the intent of 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 organized,
appointed or established by the Company or any Subsidiary of the Company or any
Person organized, appointed or established by the Company or any Subsidiary of
the Company for or pursuant to the terms of such plan) to commence, a tender or
exchange offer if, upon consummation thereof, such Person would be an Acquiring
Person (the earlier of the dates in subsections (i) and (ii) hereof being herein
referred to as the "Distribution Date") (x) the Rights will be evidenced by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for the Common Stock shall be deemed also to be
Right Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Stock. As soon as practicable after receipt by the Rights
Agent of written notice from the Company of the Distribution Date, the Rights
Agent, at the Company's expense, will send by first-class, postage prepaid mail,
to each record holder of 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, a Right Certificate, in substantially the form of Exhibit B hereto,
evidencing one Right for each share of the Common Stock so held, subject to
adjustment as provided herein. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) As soon as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Preferred Stock, in substantially
the form attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of Common Stock as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates for Common Stock, and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the certificates for Common Stock outstanding
on the Record Date shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common Stock
issued after the Record Date but prior to the earlier of the Distribution Date
or the Expiration Date (as such term is defined in Section 7), or, in certain
circumstances provided in Section 22 hereof, after the
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Distribution Date. Certificates representing such shares of Common Stock shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Sun
Communities, Inc. and State Street Bank and Trust Company (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of Sun Communities, Inc. 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. Sun Communities, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement as in effect on the date of
mailing without charge within five Business Days after receipt of a
written request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights beneficially owned by an Acquiring Person may
become null and void.
After the due execution of any supplement or amendment to this Agreement in
accordance with the terms hereof, the reference to this Agreement in the
foregoing legend shall mean the Agreement as so supplemented or amended. Until
the Distribution Date, the Rights associated with the Common Stock represented
by certificates containing the foregoing legend shall be evidenced by such
certificates alone, and the surrender for transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate. 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 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 which are no longer
outstanding. The failure to print the foregoing legend on any such Common Stock
certificate or any other defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of Section 7(e)
hereof.
SECTION 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. The Right Certificates shall be in
machine-printable format and in a form reasonably satisfactory to the Rights
Agent. Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record Date, shall
show the date of countersignature, and on their face shall entitle the holders
thereof to purchase such number of shares of Preferred Stock (or following a
Triggering Event, Common Stock, other securities, cash or other assets, as the
case may be) as shall be set forth therein at the price per one one-hundredth of
a share of Preferred Stock set forth therein (the "Purchase Price"), but the
number of such shares and the Purchase Price shall be subject to adjustment as
provided herein.
(b) Notwithstanding any other provision of this Agreement, (i) any
Right Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights beneficially owned by: (x) an Acquiring Person or any
Associate or Affiliate thereof, (y) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person became such, or (z) 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
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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 (whether or not in writing)
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
(whether or not in writing) which has as a primary purpose or effect avoidance
of Section 7(e) hereof, (ii) any Right Certificate issued at any time to any
nominee of such Acquiring Person, Associate or Affiliate, and (iii) any Right
Certificate issued pursuant to Section 6 or Section 11 hereof, upon transfer,
exchange, replacement or adjustment of any other Right Certificate referred to
in this sentence, shall contain (to the extent feasible following the written
instruction of the Company to the Rights Agent) the following legend, modified
as applicable to apply to such Person:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates shall be
executed on behalf of the Company by one of its authorized officers either
manually or by facsimile signature. The Right Certificates shall be
countersigned by an authorized signatory of the Rights Agent either manually or
by facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though the
person who countersigned such Right Certificates had not ceased to be such
signatory; and any Right Certificate may be countersigned on behalf of the
Rights Agent by any person who, at the actual date of the countersignature of
such Right Certificate, shall be a proper signatory of the Rights Agent to
countersign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such a signatory.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its office designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates, and
the date of each of the Right Certificates and the date of countersignature of
each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. Subject to the
provisions of Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Right Certificate or Right Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the
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registered holder to purchase a like number of shares of Preferred Stock (or
following a Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose, along
with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably request. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Right Certificate and shall have provided such additional
evidence, as the Company shall reasonably request, of the identity of the
Beneficial Owner, Affiliates or Associates thereof or of the holder, or of any
other Person with which such holder or any of such holder's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of
securities of the Company. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e), Section 14 and Section 20(k) hereof, countersign and deliver
to the Person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment from a Right
Certificate holder of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, along with a signature guarantee and
such other further documentation as the Rights Agent may reasonably request 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 Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Sections 9(c), 11(a)(iii), 23(b) and 24(b) hereof)
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the designated office of the
Rights Agent, together with payment of the aggregate Purchase Price for the
total number of one one-hundredths of shares of Preferred Stock (or shares of
Common Stock, other securities, cash or other assets, as the case may be) as to
which the Rights are then exercisable, at or prior to the earliest of (i) the
close of business on June 8, 2008 (the "Final Expiration Date"), (ii) the time
at which the Rights are exchanged as provided in Section 24, or (iii) the time
at which the Rights are redeemed as provided in Section 23 (such earliest date
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $125,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in accordance with paragraph (c) below.
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(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed
and completed accompanied by payment of the Purchase Price for the number of one
one-hundredths of shares of Preferred Stock (or shares of Common Stock, other
securities, cash or other assets, as the case may be) to be purchased and an
amount equal to any applicable transfer tax, the Rights Agent shall thereupon,
subject to Section 20(k), promptly (i) requisition from any transfer agent of
Preferred Stock certificates for the number of one one-hundredths of shares of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, (ii) if the Company shall
have elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number of shares of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (iii) when appropriate,
requisition from any transfer agent of the Common Stock of the Company
certificates for the total number of shares of Common Stock to be paid in
accordance with Section 11(a)(ii) and 11(a)(iii), (iv) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14, (v) promptly 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 Right Certificate, registered
in such name or names as may be designated by such holder and (vi) when
appropriate, after receipt promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate. The payment of the then
Purchase Price may be made in cash or by certified bank check or bank draft or
money order payable to the order of the Company or the Rights Agent. In the
event that the Company is obligated to issue securities, distribute property or
pay cash pursuant to Section 11(a)(iii) hereof, the Company will make all
arrangements necessary so that cash, property or securities are available for
issuance, distribution or payment by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, 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 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
became such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is a part of a plan,
arrangement or understanding (whether or not in writing) which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Right Certificates or other
Person as a result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder.
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(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 Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner, Affiliates or Associates thereof or of the holder, or of any
other Person with which such holder or any of such holder's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of any
securities of the Company as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
(and following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities) or out of its
authorized and issued shares of Preferred Stock (and, following the occurrence
of a Triggering Event, out of its authorized and issued Common Stock and/or
other securities) held in its treasury, the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) that will be sufficient to permit the exercise in full of all
outstanding Rights (it being understood that any of the foregoing shares or
securities may also be reserved for other purposes) or will take such other
steps as are appropriate to assure that the number of such shares or securities
(or their equivalents) sufficient to permit the exercise in full of all
outstanding Rights will be available upon such exercise.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
upon the exercise of 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 (but only to the extent that it is reasonably likely
that the Rights will be exercised), all shares reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (X) (i) to file, as soon as
practicable following the first occurrence of a Section 11(a)(ii) Event, or as
soon as required by law, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (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 and (Y) (i) to file appropriate
applications with any state or federal regulatory bodies having jurisdiction
over the
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issuance of the securities (or assets) purchasable upon exercise of the Rights
in order to obtain any approvals or orders of such bodies as may be legally
required, (ii) to cause such approvals to be obtained or orders to be issued as
soon as practicable after such filing and (iii) to cause such approvals or
orders to remain effective until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities (or assets), and (B) the
Expiration Date, to the extent not previously obtained. The Company will also
take such action as may be appropriate under the blue sky laws of the various
states. The Company may temporarily suspend, (X) for a period of time not to
exceed ninety (90) days after the date set forth in clause (X)(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
and (Y) for a period of time not in excess of 180 days after such date (or for
such longer period as is required by any applicable law, rule or regulation of
any appropriate regulatory bodies), the exercisability of the Rights in order to
obtain any such required regulatory body approvals or orders. Upon any such
suspension, the Company shall issue a public announcement and shall give
simultaneous written notice to the Rights Agent stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
and notice to the Rights Agent at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualifications 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 the Preferred Stock (and
following the occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any shares of the Preferred Stock (or Common Stock and/or other securities,
as the case may be) upon the exercise of Rights. The Company shall not, however,
be required (a) to pay any transfer tax which may be payable in respect of any
transfer involved in the transfer or delivery of Right Certificates or the
issuance or delivery of certificates for the Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that of the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or (b) to issue or deliver any certificates for shares of the Preferred
Stock (or Common Stock and/or other securities, as the case may be) in a name
other than that of the registered holder of the Right Certificate evidencing
Rights surrendered for exercise upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each person in whose name any
certificate for any number of shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of such
whole and/or fractional shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made and shall show the date of countersignature; provided,
however, that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby,
-11-
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the holder of a Right Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.
(a) The Purchase Price, the number 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.
(i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in
shares of the Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock
or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive upon payment of the
Purchase Price then in effect the aggregate number and kind of shares
of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock (or Common
Stock and/or other securities) transfer books of the Company were open,
he or she would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment
under both 11(a)(i) shall be in addition to, and shall be made prior
to, any this Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section adjustment required pursuant to section
11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event any Person,
alone or together with its Affiliates and Associates, becomes an
Acquiring Person except as the result of a transaction set forth in
Section 13(a) hereof, then, prior to the later of (x) the date on which
the Company's rights of redemption pursuant to Section 23(a) expire, or
(y) five (5) days after the date of the first occurrence of a Section
11(a)(ii) Event, proper provision shall be made so that each holder of
a Right, except as provided in Section 7(e) hereof, shall thereafter
have a right to receive, upon exercise thereof at the then current
Purchase Price for the number of one one-hundredths of a share of
Preferred Stock for which such Right is then exercisable in accordance
with the terms of this Agreement, in lieu of shares of Preferred Stock,
such number of shares of the Common Stock of the Company as shall equal
the result obtained by (x) multiplying the then current Purchase Price
by the then number of one one-hundredths of a share of Preferred Stock
for which a Right is then exercisable and dividing that product by (y)
50% of the Current Market Price per share of the Common Stock of the
Company (determined pursuant to Section 11(d)) on the date of the
occurrence of the event listed above in this subparagraph (ii) (such
number of shares are hereinafter referred to as the "Adjustment
Shares") provided that the Purchase Price and the number of Adjustment
Shares shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of such first occurrence.
-12-
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(iii) In the event that the number of shares of Common Stock which are
authorized by the Company's Amended and Restated Articles of
Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights are not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), 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,
the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon exercise of the
Rights and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock which a majority of the Independent
Directors and the Board of Directors of the Company have deemed to have
the same value as shares of Common Stock (such shares of preferred
stock are hereinafter sometimes referred to as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been
determined by a majority of the Independent Directors and 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
thirty (30) days following the later of (x) the first occurrence of a
Section 11(a)(ii) Event and (y) the date on which the Company's rights
of redemption pursuant to Section 23(a) expires (the later of (x) and
(y) being referred to herein as the "Section 11(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If the Board of Directors of the Company shall determine
in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of
the Rights, the thirty (30) day period set forth above may be extended
to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek
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 and shall give simultaneous
written notice to the Rights Agent stating that the exercisability of
the Rights has been temporarily suspended, as well as a public
announcement and notice to the Rights Agent at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of 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 Section 11(a)(ii) Trigger Date and the value of any
Common Stock Equivalent shall be deemed to have the same value as the
Common Stock on such date. The Company shall give the Rights Agent
notice of the selection of any Common Stock Equivalent under this
Section 11(a)(iii).
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(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or securities having substantially
the same rights, privileges and preferences as the shares of Preferred Stock
("Equivalent Preferred Stock") or convertible into the Preferred Stock or
Equivalent Preferred Stock) at a price per share of the Preferred Stock or
Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into the Preferred Stock or Equivalent Preferred Stock)
less than the Current Market Price (as defined in Section 11(d)) per share of
the Preferred Stock or Equivalent Preferred Stock, as the case may be, on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, of which the numerator shall be the number of shares
of Preferred Stock outstanding on such record date plus the number of shares of
Preferred Stock or Equivalent Preferred Stock which the aggregate offering price
of the total number of shares of Preferred Stock or Equivalent Preferred Stock
so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Current Market
Price and of which the denominator shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by delivery
of consideration part or all of which 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. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular periodic cash dividend or a dividend payable in Preferred
Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the Current
Market Price per share of Preferred Stock (as defined in Section 11(d)) on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock and of which the denominator shall be
such Current Market Price per share of Preferred Stock. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii),
(i) the "Current Market Price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per share
of such Common Stock for the thirty (30) consecutive Trading Days (as
such term is hereinafter defined in this paragraph (d)) immediately
prior to such date and for purposes of
-14-
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computations made pursuant to Section 11(a)(iii) hereof, the "Current
Market Price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such Common
Stock for the ten (10) consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market
Price per share of Common Stock is determined during the 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 requisite thirty (30) Trading Day or ten (10) Trading Day period,
as set forth above after the ex-dividend date for such dividend or
distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Market Price
shall be appropriately 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 the 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 the Common Stock are listed or admitted
to trading or, if the shares of the Common Stock are not listed or
admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") or such other system then in use, or, if on any such
date the shares of the Common Stock are not quoted by 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 shall be as determined in good faith
by the Independent Directors if the Independent Directors constitute a
majority of the Board of Directors or, in the event the Independent
Directors do not constitute a majority of the Board of Directors, by an
independent investment banking firm selected by the Board of Directors,
whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. The term
"Trading Day" shall mean 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 the Common Stock are not listed or admitted to trading on any
national securities exchange, a Monday, Tuesday, Wednesday, Thursday or
Friday on which banking institutions in the State of New York are not
authorized or obligated by law or executive order to close. 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 Independent Directors if the
Independent Directors constitute a majority of the Board of Directors
or, in the event the Independent Directors do not constitute a majority
of the Board of Directors, by an independent investment banking firm
selected by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
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(ii) For the purpose of any computation hereunder, the "Current Market
Price" per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the Current
Market Price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or
listed or traded in any manner described in clause (i) of this Section
11(d), the "Current Market Price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock occurring after
the date of this Agreement) multiplied by the Current Market Price per
share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "Current
Market Price" per share of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Board 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 one
one-hundredths of a share of Preferred Stock shall be equal to the
"Current Market Price" of one share of Preferred Stock divided by one
hundred (100).
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in such price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common Stock or
one millionth of a share of Preferred Stock as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from the
date of the transaction which mandates such adjustment or (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than shares of Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares contained in Section 11(a) through (q),
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in 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 shares (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
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(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of shares of Preferred
Stock for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest 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 the adjustment
of the Purchase Price. The Company shall make a public announcement and shall
give simultaneous written notice to the Rights Agent of its election to adjust
the number of Rights, indicating the record date for the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least ten (10) days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates 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 Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then stated value, if any, of
a share of Preferred Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable such number of one one-hundredths of a share of such Preferred
Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such holder's right
to receive such additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Board of Directors of the Company shall determine to be
advisable in order that any consolidation or subdivision of shares of Preferred
Stock, issuance wholly for cash of any of shares of Preferred Stock at less than
the Current
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Market Price, issuance wholly for cash of the Preferred Stock or securities
which by their terms are convertible into or exchangeable for Preferred Stock,
stock dividends or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Sections 23, 24 and 27 hereof, take (nor
will it permit any of its Subsidiaries 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.
(o) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(n)),
(ii) merge with or into any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(n)), or (iii) sell or transfer
(or permit any of its Subsidiaries to sell or transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) 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(n)) if (x) at
the time of or immediately after such consolidation, merger or sale there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
stockholders of the Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates and
Associates.
(p) 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 shares
of Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction, the numerator 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.
(q) Notwithstanding anything in this Agreement to the contrary, prior
to the Distribution Date, the Company may, in lieu of making any adjustment to
the Purchase Price, the number of shares of Preferred Stock eligible for
purchase on exercise of each Right or the number of Rights outstanding, which
adjustment would otherwise be required by Section 11(a)(i), 11(b), 11(c), 11(h)
or 11(i), make such other equitable adjustment or adjustments thereto as the
Board of Directors (whose determination shall be conclusive) deems appropriate
in the circumstances and not inconsistent with the objectives of the Board of
Directors in adopting this Agreement and such Sections.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever
an adjustment is made as provided in Sections 11 and 13, the Company shall (a)
promptly prepare a certificate setting forth such adjustment, and a brief
statement of the facts accounting for such adjustment and the adjusted Purchase
Price, (b) promptly file with the Rights Agent and with
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each transfer agent for the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 26. 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 Shares Acquisition Date, directly
or indirectly, (x) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(n)) and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(n)) shall consolidate, merge with and 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 Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or more transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(n) hereof), then, and in each such case proper provision shall be made so
that (i) each holder of a Right (except as provided in Section 7(e)) shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly issued, fully paid, non-assessable and freely tradable shares
of Common Stock of the Principal Party (as hereinafter defined), not subject to
any liens, encumbrances, rights of call or first refusal, or other adverse
claims as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the then number of one one-hundredths of a share of
Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
such one one-hundredths of a share for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price
in effect immediately prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price per share of the Common Stock
of such Principal Party (determined in the manner described in Section 11(d)) on
the date of consummation of such consolidation, merger, sale or transfer; (ii)
the Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 shall thereafter apply to such Principal Party; (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 accordance with Section 9) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of its 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 (x) or (y) of the first
sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are
converted in such merger or consolidation,
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and if no securities are so issued, the Person that is the other party
to the merger or consolidation; and
(ii) in the case of any transaction described in (z) of the first
sentence in this Section 13, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (x) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another corporation the Common Stock of which
is and has been so registered, "Principal Party" shall refer to such other
corporation; (y) if such Person is a Subsidiary, directly or indirectly, of more
than one corporation, the Common Stocks of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such
corporations is the issuer of the Common Stock having the greatest market value.
(c) The Company shall not consummate any Section 13 Event unless all
regulatory approvals for the consummation of such Section 13 Event and the
exercise of the Rights in accordance with the terms of this Agreement have been
obtained and the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which are neither outstanding nor reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, will use its best efforts to cause
such registration statement to become effective as soon as practicable
after such filing and will use its best efforts to cause such
registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Expiration Date;
and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive Section 13
Events. In the event that a Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
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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 in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares (other than fractions
which are integral multiples of one one-hundredth of a share of Preferred
Stock). In lieu of fractional shares that are not integral multiples of one
one-hundredth of a share of Preferred Stock, the Company may pay to the
registered holders of Right Certificates at the time the Rights evidenced
thereby are exercised or exchanged as herein provided an amount in cash equal to
the same fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii)) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as otherwise permitted by this Section 14.
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SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this Agreement
are vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock); and
any registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
the Common Stock), may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by accepting the
same consents and agrees with the Company and the Rights Agent and with every
other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed, along with a signature guarantee and such other
and further documentation as the Rights Agent may reasonably request;
(c) subject to Section 6 and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the Person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificates
or the associated Common Stock certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be required to be affected by any notice to the contrary;
(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. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder, as
such, of any Right Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the number of shares of Preferred Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), or to receive dividends or
subscription
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rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent (including the reasonable fees and expenses of counsel), for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability hereunder.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, instruction, adjustment notice, 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.
In addition to the foregoing, the Rights Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or omitted by
it in connection with its administration of this Agreement in reliance upon (i)
the proper execution of the certification concerning beneficial ownership
appended to the Form of Assignment and the Form of Election to Purchase included
as part of Exhibit B hereto (the "Certification"), unless the Rights Agent shall
have actual knowledge that, as executed, the Certification is untrue or (ii) the
non-execution or failure to complete the Certification including, without
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such non-execution or failure.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. 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 that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
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name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, 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 any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct. The issuance or non-issuance of a
Right Certificate or Preferred Stock or other security issued in lieu of
Preferred Stock in accordance with instructions given to the Rights Agent by the
Company pursuant to Section 20(k) hereof or in accordance with the terms hereof
shall not constitute gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any adjustment required under the provisions of Sections 11
or 13 or responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or Common Stock to
be issued pursuant to this Agreement or any Right Certificate or as to whether
any shares of Preferred Stock or Common Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any
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provision hereof from any one of the Chairman of the Board, the President, any
Vice President, the Secretary or the Treasurer of the Company, and is authorized
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. An
application by the Rights Agent for instructions may set forth in writing any
action proposed to be taken or omitted by the Rights Agent with respect to its
duties and 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 not be less
than one Business Day after the Company receives such application) without the
consent of the Company unless prior to taking or omitting such action, the
Rights Agent has received written instructions in response to application
specifying the actions to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either by itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, reasonable care was exercised in the
selection 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, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer
without first consulting the Company. The Company shall give the Rights Agent
prompt written instructions as to the action to be taken regarding the Rights
Certificates involved. The Rights Agent shall not be liable for acting in
accordance with such instructions.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon
thirty (30) days' notice in writing mailed to the Company and to each transfer
agent of the Preferred Stock and the Common Stock by registered or certified
mail, and, at the Company's expense, to the holders of the Right Certificates by
first class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Preferred Stock and the Common Stock by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice,
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submit his Right Certificate for inspection by the Company), then the Company
shall become the temporary Rights Agent and the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of any state of the United
States so long as such corporation is authorized to do business as a banking or
trust institution in such state, is in good standing, is authorized under such
laws to exercise corporate trust powers, is subject to supervision or
examination by federal or state authority, and has at the time of its
appointment as Rights Agent a combined capital and surplus of at least One
Hundred Million Dollars ($100,000,000.00), or (b) an Affiliate of a corporate
described in clause (a) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
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 Preferred Stock and the Common Stock, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Right Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) the close of business on the tenth calendar day
following the Shares Acquisition Date (or if the Shares Acquisition Date shall
have occurred prior to the Record Date, the close of business on the tenth day
following the Record Date), or (y) the Final Expiration Date, redeem all but not
less than all of the then outstanding Rights at a redemption price of $.001 per
Right as appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), and the Company may, at its
option, pay the Redemption Price either in shares of its Common Stock (valued at
their Current Market Price as defined in Section 11(d)(i) on the date of the
redemption), other securities, cash or other assets; provided, however, that if
the Board of Directors of the Company authorizes redemption of the Rights on or
after the Shares Acquisition
-26-
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Date, then there must be Independent Directors in office and such authorization
shall require the concurrence of a majority of the Independent Directors.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired.
(b) In deciding whether or not to exercise the Company's right of
redemption hereunder, the Board of Directors of the Company shall act in good
faith, in a manner they reasonably believe to be in the best interests of the
Company and with such care, including reasonable inquiry, skill and diligence,
as a person of ordinary prudence would use under similar circumstances, and they
may consider the long-term and short-term effects of any action upon employees,
customers and creditors of the Company and upon communities in which offices or
other establishments of the Company are located, and all other pertinent
factors.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right held. Within ten (10) days after the action of
the Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to the Rights Agent and to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23, and other than in
connection with the repurchase of Common Stock prior to the Distribution Date.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option (provided
that there are then Independent Directors in office and a majority of the
Independent Directors concur), at any time and from time to time on or after a
Section 11(a)(ii) Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for 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
after the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. Promptly after
the action of the Board of Directors ordering an exchange of the Rights, the
Company shall give notice of any such exchange to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the shares of Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
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number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Preferred Stock (or Equivalent Preferred Stock,
as such term is defined in Section 11(b) hereof) for shares of Common Stock
exchangeable for the Rights, at the initial rate of one one-hundredth of a share
of Preferred Stock (or Equivalent Preferred Stock) for each share of Common
Stock, as appropriately adjusted to reflect adjustments in the dividend rights
of the Preferred Stock pursuant to the terms thereof.
(d) In the event that there shall not be sufficient shares of Common
Stock or Preferred Stock issued, but not outstanding, or authorized but
unissued, to permit any exchange of Rights as contemplated in accordance with
this Section 24 or that any regulatory actions or approvals are required in
connection therewith, the Company shall take all such action as may be necessary
to authorize additional Common Stock or Preferred Stock for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractional shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock pursuant to this Section 24. In lieu of such fractional shares of
Common Stock, the Company shall pay 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
Section 24(e), 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 the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
(f) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any share of Common Stock exchangeable for a Right
(i) Common Stock Equivalents (ii) cash, (iii) debt securities of the Company,
(iv) other assets, or (v) any combination of the foregoing, having an aggregate
value which a majority of the Independent Directors and the Board of Directors
of the Company shall have determined in good faith to be equal to the Current
Market Price of one share of Common Stock (determined pursuant to Section 11(d)
hereof) on the Trading Date immediately preceding the date of exchange pursuant
to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS. In case the Company shall propose at any
time following the Distribution Date (a) to pay any dividend payable in stock of
any class to the holders of Preferred Stock or to make any other distribution to
the holders of Preferred Stock (other than a regular periodic cash dividend), or
(b) to offer to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of stock
of any class or any other securities, rights or options, or (c) to effect any
reclassification of Preferred Stock (other than a reclassification involving
only the subdivision of outstanding Preferred Stock), or (d) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(n) 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 or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to, any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies with Section
11(n) hereof), or (e) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to the Rights Agent
and to each holder of a Right, in accordance with Section 26, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or Rights, or the date on which such
reclassification, consolidation, merger, sale, transfer,
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liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the 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 (a) or (b) above at least twenty (20) days prior to the record date
for determining holders of the Preferred Stock for purposes of such action, and
in the case of any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Preferred Stock, whichever shall be the earlier.
In case a Section 11(a)(ii) Event shall occur, then, in any such case, the
Company shall as soon as practicable thereafter give to the Rights Agent and to
each holder of a Right, to the extent feasible and in accordance with Section
26, 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) and
all references in the preceding paragraph to Preferred Stock shall be deemed to
thereafter refer to Common Stock and/or other securities, as the case may be.
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 Right Certificate to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, or overnight courier service addressed (until another address
is filed in writing with the Rights Agent) as follows:
Sun Communities, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxx
with a copy to:
Jaffe, Raitt, Heuer & Xxxxx, P.C.
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, or overnight courier
service addressed (until another address is filed in writing with the Company)
as follows:
State Street Bank and Trust Company
c/o Boston EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid, or
overnight courier service 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 earlier of the Distribution
Date or the Shares Acquisition Date and subject to the last sentence of this
Section 27, the Company may from time to time supplement or amend this Agreement
without the approval of any holders of Right Certificates. From and after the
earlier of the Distribution Date or the Shares Acquisition
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Date, and subject to the penultimate sentence of this Section 27, the Company
may from time to time supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or (iii) to lengthen the time
period during which the Rights may be redeemed following the Shares Acquisition
Date for up to an additional twenty (20) days beyond the time period set forth
in Section 23(a) (provided that any such lengthening shall be effective only if
there are Independent Directors and shall require the concurrence of a majority
of such Independent Directors), or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment unless the Rights Agent shall have determined in
good faith that such supplement or amendment would adversely affect its
interests under this Agreement. Notwithstanding anything in this Agreement to
the contrary, no supplement or amendment shall be made on or after the
Distribution Date which changes the Redemption Price, the Final Expiration Date,
the Purchase Price or the number of shares of Preferred Stock for which a Right
is then exercisable.
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. 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
provisions 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 Independent 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, as expressly provided, the
Independent 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 the purpose of clause (ii) below, all omissions
with respect to the foregoing) which are done or made by the Board (or, as
provided for, by the Independent Directors) in good faith, shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Right Certificates and all other parties, and (ii) not subject the Board or the
Independent Directors to any liability to the holders of the Right Certificates.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, registered holders of the Common Stock).
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
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in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant or restriction is held by
such court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
SECTION 32. GOVERNING LAW. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Maryland and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State except that the rights, duties and obligations of the
Rights Agent under this Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, including its principles of conflicts of law.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
SUN COMMUNITIES, INC. STATE STREET BANK AND TRUST
COMPANY, as Rights Agent
By:___________________________________________ By:_________________________
Xxxx X. Xxxxxxxx, Chief Executive
Officer and President
Its:________________________
Attest:
By:___________________________________________ By:_________________________
Xxxxxxx X. Xxxxxxxx, Senior Vice
President, Treasurer, Chief Financial
Officer, and Secretary Its:________________________
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EXHIBIT "A"
SUN COMMUNITIES, INC.
----------
ARTICLES SUPPLEMENTARY OF BOARD OF DIRECTORS CLASSIFYING
AND DESIGNATING A SERIES OF PREFERRED STOCK AS
JUNIOR PARTICIPATING PREFERRED STOCK
AND FIXING DISTRIBUTION AND
OTHER PREFERENCES AND RIGHTS OF SUCH SERIES
----------
Sun Communities, Inc., a Maryland corporation, having its principal
office in the State of Michigan, in the City of Farmington Hills (the
"Company"), hereby certifies to the State Department of Assessments and Taxation
of Maryland that:
Pursuant to authority conferred upon the Board of Directors by the
Charter and Bylaws of the Company, the Board of Directors pursuant to
resolutions adopted on April 24, 1998 (i) has duly classified 1,000,000 shares
of the authorized but unissued shares of the Preferred Stock of the Company as a
series designated the "Junior Participating Preferred Stock", and (ii)
determined the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption of the shares of such series. Such preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption, and number of
shares are as follows:
SECTION 1. NUMBER OF SHARES AND DESIGNATION. This series of Preferred Stock
shall be designated the Junior Participating Preferred Stock (the "Preferred
Shares") and the number of shares which shall constitute such series shall be
1,000,000 shares, par value $.01 per share. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of Preferred Shares to a number less than
the number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Company convertible
into Preferred Shares.
SECTION 2. DIVIDEND RIGHTS.
(A) Subject to the rights of holders of any shares of any series of Preferred
Stock (or any similar stock) ranking prior and superior to the Preferred Shares
with respect to dividends, the holders of Preferred Shares shall be entitled
prior to the payment of any dividends on shares ranking junior to the Preferred
Shares to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the 15th day of January, April, July, and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Preferred Shares, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision
for adjustment hereinafter set forth, 100 times the aggregate per share amount
of all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions (other than a dividend
payable in shares of common stock, par value $0.01 per share, of the Company
(the "Common Stock") or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise)) declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Preferred Shares. In the event the Company shall at any
time (i) declare or pay any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of Preferred Shares were
A-1
36
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on the Preferred Shares
as provided in subparagraph (A) above immediately after it declares a dividend
or distribution on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Preferred Shares shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding Preferred
Shares from the Quarterly Dividend Payment Date next preceding the date of issue
of such Preferred Shares, unless the date of issue of such shares is prior to
the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue and be cumulative from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of Preferred Shares entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
Preferred Shares in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of Preferred
Shares entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than thirty (30) days prior to the
date fixed for the payment thereof.
SECTION 3. LIQUIDATION.
(A) Upon any liquidation, dissolution or winding up of the Company, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Preferred Shares unless, prior thereto, the holders of shares of Preferred
Shares shall have received $1.00 per share (the "Liquidation Preference"), plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment. Following the payment of
the full amount of the Liquidation Preference, no additional distributions shall
be made to the holders of shares of Preferred Shares unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stocks splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of the
Liquidation Preference and the Common Adjustment in respect of all outstanding
Preferred Shares and shares of Common Stock, respectively, holders of Preferred
Shares and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to the Preferred Shares and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available to
permit payment in full of the Liquidation Preference and the liquidation
preferences of all other series of Preferred Stock, if any, which rank on a
parity with the Preferred Shares, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to their
respective liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common Adjustment
after the payment in full of the Liquidation Preference, then such remaining
assets shall be distributed ratably to the holders of Common Stock.
A-2
37
(C) In the event the Company shall at any time (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment
Number by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
SECTION 4. NO REDEMPTION.
(A) Except as provided below, the Preferred Shares shall not be redeemable.
(B) The Preferred Shares are subject to the provisions of Article VII of the
Charter, including, without limitation, the provisions for the redemption of
Excess Stock (as defined in such Article).
SECTION 5. VOTING RIGHTS. The holders of Preferred Shares shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
Preferred Share shall entitle the holder thereof to 100 votes on all matters
voted on at a meeting of the stockholders of the Company. In the event the
Company shall at any time (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the number of votes per share to which holders of
Preferred Shares were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of Preferred
Shares and the holders of shares of Common Stock and any other capital stock of
the Company having general voting rights shall vote together as one voting group
on all matters submitted to a vote of stockholders of the Company.
(C) Except as set forth herein or as otherwise provided by law, holders of
Preferred Shares shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
SECTION 6. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions payable on
the Preferred Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on Preferred Shares outstanding shall have been paid in full, the
Company shall not:
declare or pay dividends on, make any other distributions on, or redeem or
purchase or otherwise acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Preferred Shares; declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Preferred Shares, except dividends paid ratably on the Preferred Shares and
all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled; redeem or purchase or otherwise acquire for
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consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Preferred Shares, provided that the Company may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Company ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Preferred
Shares; or purchase or otherwise acquire for consideration any shares of
Preferred Shares or any shares of stock ranking on a parity with the
Preferred Shares, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to purchase or
otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under subparagraph (A) of this Section 6, purchase or
otherwise acquire such shares at such time and in such manner.
SECTION 7. REACQUIRED SHARES. Any Preferred Shares purchased or otherwise
acquired by the Company in any manner whatsoever shall be canceled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein or in the Charter.
SECTION 8. MERGER, CONSOLIDATION, ETC. In case the Company shall enter into any
merger, consolidation, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each Preferred Share shall at
the same time be similarly exchanged or changed into an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Company shall at any time
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of
Preferred Shares shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
SECTION 9. RANKING. The Preferred Shares shall rank, with respect to the payment
of dividends and distribution of assets, junior to all other series of the
Company's Preferred Stock unless the terms of any such series shall provide
otherwise.
SECTION 10. AMENDMENT. The Charter, including the Articles Supplementary
establishing the rights and preferences of the Preferred Shares, shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Preferred Shares so as to affect them
adversely without the affirmative vote of the holders of a majority of the
outstanding shares of Preferred Shares, voting separately as one voting group.
SECTION 11. FRACTIONAL SHARES. Preferred Shares may be issued in fractions of a
share which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of
Preferred Shares.
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IN WITNESS WHEREOF, the Company has caused these Articles Supplementary
to be signed in its name and on its behalf and attested to by the undersigned on
this ___ day of May, 1998 and the undersigned acknowledges under the penalties
of perjury that these Articles Supplementary are the corporate act of said
Company and that to the best of his knowledge, information and belief, the
matters and facts set forth herein are true in all material respects.
SUN COMMUNITIES, INC.
By:_______________________________________
Xxxx X. Xxxxxxxx, Chief Executive
Officer and President
Attest:
By:___________________________________________
Xxxxxxx X. Xxxxxxxx, Senior Vice
President, Treasurer, Chief Financial
Officer, and Secretary
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EXHIBIT B
[FORM OF RIGHT CERTIFICATE]
Certificate No. R-___________ __________Rights
NOT EXERCISABLE AFTER JUNE 8, 2008 OR EARLIER IF NOTICE OF REDEMPTION IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.](1)
SUN COMMUNITIES, INC.
RIGHT 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 April 24, 1998 (the "Rights Agreement")
between Sun Communities, Inc., a Maryland corporation (the "Company"), and
State Street Bank and Trust Company, a Massachusetts trust company (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Boston time) on June 8, 2008 at the designated office of the Rights Agent, or
its successors as Rights Agent, one one-hundredth of a fully paid non
assessable share of the Junior Participating Preferred Stock, par value $.01
per share (the "Preferred Stock"), of the Company, at a purchase price of $125
per one one-hundredth of a share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase and
related certificate duly executed, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably request. The
number of Rights evidenced by this Right 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 _____,
1998, based on the Preferred Stock of the Company as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
person who after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Triggering Event.
____________________
(1) The portion of the legend in brackets shall be inserted only if applicable.
B-1
41
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock (or, in certain circumstances, common
stock and/or other securities) which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events, including Triggering Events (as
such term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent, and at the executive offices of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths of a share of Preferred
Stock as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request, another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be (i) redeemed by the Company at a redemption price of
$.001 per Right or (ii) exchanged by the Company in whole or in part for shares
of common stock or Preferred Stock.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred Stock
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or, to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
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This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of________________, __________.
SUN COMMUNITIES, INC.
By:___________________________________________
Xxxx X. Xxxxxxxx, Chief Executive
Officer and President
Attest:
By:___________________________________________
Xxxxxxx X. Xxxxxxxx, Senior Vice
President, Treasurer, Chief Financial
Officer, and Secretary
Countersigned:
STATE STREET BANK AND TRUST
COMPANY, as Rights Agent
By:_________________________________
Its:________________________________
Attest:
By:_________________________________
Its: _______________________________
Date:____________
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED____________________ hereby sells, assigns and transfers unto
________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint_________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _____________, ________
_____________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange.)
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44
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _______________, _________
___________________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange.)
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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45
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights evidenced by the Right Certificate.)
TO: Sun Communities, Inc.:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the shares of the
Preferred Stock issuable upon the exercise of such Rights (or such other
securities of the Company or of any other Person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of:
Please insert social security or
other taxpayer identifying number: ___________________________
_______________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security or
other taxpayer identifying number: ______________________
_______________________________________________________________________
(Please print name and address)
Dated: ____________, _________
______________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange.)
B-6
46
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ______________, __________
___________________________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
B-7
47
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On April 24, 1998, the Board of Directors of Sun Communities, Inc. (the
"Company") declared a dividend distribution of one Right for each outstanding
share of Common Stock, $0.01 par value (the "Common Stock"), of the Company. The
distribution is payable on June 9, 1998 to stockholders of record as of the
close of business on June 8, 1998 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Junior Participating Preferred Stock (the "Preferred Stock"), at a price of $125
per one one-hundredth of a share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and State Street Bank and Trust Company,
as Rights Agent (the "Rights Agent").
DISTRIBUTION DATE; TRANSFER OF RIGHTS
Until the earlier to occur of (i) ten calendar days following the date (the
"Shares Acquisition Date") of public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") acquired, or obtained
the right to acquire, beneficial ownership of Common Stock or other voting
securities ("Voting Stock") that have 15% or more of the voting power of the
outstanding shares of Voting Stock or (ii) ten calendar days (or such later date
as may be determined by action of the Board of Directors prior to the time any
person or group of affiliated persons becomes an Acquiring Person) following the
commencement or announcement of an intention to make a tender offer or exchange
offer the consummation of which would result in such person acquiring, or
obtaining the right to acquire, beneficial ownership of Voting Stock having 15%
or more of the voting power of the outstanding shares of Voting Stock (the
earlier of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Company's Common Stock certificates
outstanding as of the Record Date, by such Common Stock certificates. The Rights
Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the Company's Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after the Record Date upon transfer or new
issuance of the Company's Common Stock will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any of
the Company's Common Stock certificates outstanding as of the Record Date will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Company's Common Stock
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on June 8, 2008, unless earlier redeemed or
exchanged by the Company as described below.
EXERCISE OF RIGHTS FOR COMMON STOCK OF THE COMPANY
In the event that a Person becomes an Acquiring Person, each holder of
a Right will thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void.
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EXERCISE OF RIGHTS FOR SHARES OF THE ACQUIRING COMPANY
In the event that, at any time following the Shares Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction, or (ii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the Exercise Price of the Right.
ADJUSTMENTS TO PURCHASE PRICE
The Purchase Price payable, and the number of shares of Preferred Stock (or
Common Stock or other securities, as the case may be) issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution (i)
in the event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for shares of the
Preferred Stock or convertible securities at less than the current market price
of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends out of earnings or retained earnings or dividends
payable in the Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until the earlier of (i) three years from the date of the event giving
rise to such adjustment and (ii) the time at which cumulative adjustments
require an adjustment of at least 1% in such Purchase Price. No fractional
shares will be issued (other than fractional shares which are integral multiples
of one one-hundredth of a share of Preferred Stock) and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred Stock
on the last trading date prior to the date of exercise.
REDEMPTION AND EXCHANGE OF RIGHTS
At any time after the occurrence of the event set forth under the
heading "Exercise of Rights for Common Stock of the Company" above, the Board of
Directors (with the concurrence of a majority of the Independent Directors) may
exchange the Rights (other than Rights owned by the Acquiring Person which shall
have become void), in whole or in part, at an exchange ratio of one share of
Common Stock (or a fraction of a share of Preferred Stock having the same market
value) per Right (subject to adjustment).
At any time prior to 5:00 P.M. Boston time on the tenth calendar day
following the Shares 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
redeem shall require that there be Independent Directors in office and that a
majority of the Independent Directors concur in such decision. Immediately upon
the action of the Board of Directors of the Company electing to redeem the
Rights with, if required, the concurrence of the Independent Directors, the
Company shall make an announcement thereof, and upon such action, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised or exchanged, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
TERMS OF THE PREFERRED STOCK
The Preferred Stock will rank junior to all other series of the
Company's preferred stock with respect to payment of dividends and as to
distributions of assets in liquidation. Each share
C-2
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of Preferred Stock will have a quarterly dividend rate per share equal
to the greater of $1.00 or 100 times the per share amount of any dividend
(other than a dividend payable in shares of Common Stock or a subdivision of
the Common Stock) declared from time to time on the Common Stock, subject to
certain adjustments. The Preferred Stock will not be redeemable. In the event
of liquidation, the holders of the Preferred Stock will be entitled to receive
a preferred liquidation payment per share of $1.00 (plus accrued and unpaid
dividends) or, if greater, an amount equal to 100 times the payment to be made
per share of Common Stock, subject to certain adjustments. Generally, each
share of Preferred Stock will vote together with the Common Stock and any other
series of cumulative preferred stock entitled to vote in such manner and will
be entitled to 100 votes, subject to certain adjustments. In the event of any
merger, consolidation, combination or other transaction in which shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or other property, each share of Preferred Stock will be entitled to
receive 100 times the aggregate amount of stock, securities, cash and/or other
property, into which or for which each share of Common Stock is changed or
exchanged, subject to certain adjustments. The foregoing dividend, voting and
liquidation rights of the Preferred Stock are protected against dilution in the
event that additional shares of Common Stock are issued pursuant to a stock
split or stock dividend or distribution. Because of the nature of the Preferred
Stock's dividend, voting, liquidation and other rights, the value of the one
one-hundredth of a share of Preferred Stock purchasable with each Right is
intended to approximate the value of one share of Common Stock.
AMENDMENTS TO TERMS OF THE RIGHTS
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board (in certain circumstances, with the concurrence of the Independent
Directors) in order to cure any ambiguity, defect or inconsistency, or to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person); provided, however, that no
supplement or amendment may be made after the Distribution Date which changes
those provisions relating to the principal economic terms of the Rights.
The term "Independent Directors" means any member of the Board of
Directors of the Company who either (i) was a member of the Board on the date of
the Rights Agreement or (ii) is subsequently elected to the Board if such person
is recommended or approved by a majority of the Independent Directors, but shall
not include an Acquiring Person, or an affiliate or associate of an Acquiring
Person, or any representative of the foregoing entities.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
[ , 1998]. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
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