XXXXXXX XXXXXX CORPORATION
AND
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF APRIL 15, 1999
TABLE OF CONTENTS
Page
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Section 1. Certain Definitions...................................................................... 1
Section 2. Appointment of Rights Agent.............................................................. 10
Section 3. Issue of Right Certificates.............................................................. 10
Section 4. Form of Right Certificates............................................................... 13
Section 5. Countersignature and Registration........................................................ 15
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates....................................................................... 16
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights................................................................ 18
Section 8. Cancellation and Destruction of Right
Certificates............................................................................. 23
Section 9. Reservation and Availability of
Preferred Shares......................................................................... 24
Section 10. Preferred Shares Record Date............................................................. 27
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights............................................................... 28
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares...................................................................... 46
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power...................................................... 46
Section 14. Fractional Rights and Fractional Shares.................................................. 53
Section 15. Rights of Action......................................................................... 56
Section 16. Agreement of Rights Holders.............................................................. 57
Section 17. Right Certificate Holder Not Deemed a
Shareholder.............................................................................. 58
Section 18. Concerning the Rights Agent.............................................................. 59
i
Section 19. Merger or Consolidation or Change of
Name of Rights Agent..................................................................... 60
Section 20. Duties of Rights Agent................................................................... 62
Section 21. Change of Rights Agent................................................................... 66
Section 22. Issuance of New Right Certificates....................................................... 68
Section 23. Redemption and Termination............................................................... 68
Section 24. Exchange................................................................................. 70
Section 25. Notice of Certain Events................................................................. 72
Section 26. Notices.................................................................................. 74
Section 27. Supplements and Amendments............................................................... 75
Section 28. Successors............................................................................... 76
Section 29. Determinations and Actions by the Board
of Directors, etc........................................................................ 76
Section 30. Benefit of this Agreement................................................................ 77
Section 31. Severability............................................................................. 78
Section 32. Governing Law............................................................................ 78
Section 33. Counterparts............................................................................. 78
Section 34. Descriptive Headings..................................................................... 78
EXHIBIT A Form of Certificate of Designation,
Preferences and Rights of Series A
Preferred Stock of Xxxxxxx Xxxxxx
Corporation............................................................................ A-i
EXHIBIT B Form of Right Certificate.............................................................. B-i
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RIGHTS AGREEMENT
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Agreement, dated as of April 15, 1999, between Xxxxxxx Xxxxxx
Corporation, a Delaware corporation (the "Corporation"), and Continental Stock
Transfer & Trust Company, a New York corporation (the "Rights Agent").
The Board of Directors of the Corporation has authorized and declared
a dividend of one Right on each Common Share (as hereinafter defined) of the
Corporation outstanding at the close of business on April 30, 1999 (the "Record
Date"), each right representing the right to purchase one one-thousandth
(1/1000) of a Series A Preferred Share, $.01 par value, of the Corporation
having the rights and preferences set forth in the Form of Certificate of
Designation, Preferences and Rights of Series A Preferred Shares of Xxxxxxx
Xxxxxx Corporation attached hereto as Exhibit A, upon the terms and subject to
the conditions herein set forth (the "Rights"), and has further authorized the
issuance of one Right with respect to each Common Share of the Corporation that
shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Expiration Date (as such terms are hereinafter defined),
except as otherwise shall be provided herein.
Accordingly, 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:
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(a) "Acquiring Person" shall mean any Person (as hereinafter defined)
who or which, together with all Affiliates and Associates (as such terms are
hereinafter defined) of such Person, shall be the Beneficial Owner (as
hereinafter defined) of 20% or more of the Common Shares of the Corporation
then outstanding, but shall not include an Exempt Person (as such term is
hereinafter defined); provided, however, that if the Board of Directors of the
Corporation determines that a Person who would otherwise be an "Acquiring
Person" has become such inadvertently and without any intention of changing or
influencing control of the Corporation, and such Person, as promptly as
practicable divests himself, herself or itself of Beneficial Ownership of a
sufficient number of Common Shares so that such Person would no longer be an
Acquiring Person, then such Person shall not be deemed to be or to have become
an "Acquiring Person" for any purposes of this Agreement. Notwithstanding the
foregoing, (i) if a Person would be deemed an Acquiring Person upon the
adoption of this Agreement because of Beneficial Ownership of 20% or more but
less than 25% of the Common Shares outstanding on such date, such Person will
not be deemed an Acquiring Person for any purposes of this Agreement unless and
until such Person acquires Beneficial Ownership of any additional Common Shares
(other than pursuant to a dividend or distribution paid or made by the
Corporation on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), after the adoption of
this Agreement unless upon the
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consummation of the acquisition of such additional Common Shares such Person
does not own 20% or more of the Common Shares then outstanding, and (ii) no
Person shall become an "Acquiring Person" as the result of an acquisition of
Common Shares by the Corporation which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 20% or more of the Common Shares then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 20% or more of
the Common Shares then outstanding by reason of such share acquisitions by the
Corporation and thereafter become the Beneficial Owner of any additional Common
Shares (other than pursuant to a dividend or distribution paid or made by the
Corporation on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), then such Person shall
be deemed to be an "Acquiring Person" unless upon the consummation of the
acquisition of such additional Common Shares such Person does not own 20% or
more of the Common Shares then outstanding. For all purposes of this Agreement,
any calculation of the number of Common Shares outstanding at any particular
time, including for purposes of determining the particular percentage of such
outstanding Common Shares of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as in effect on the date hereof.
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(b) "Act" shall mean the Securities Act of 1933.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations (the "General Rules") promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
(d) 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 beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in writing), (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights
at any time prior to the occurrence of a Triggering Event (as hereinafter
defined) but thereafter including Rights acquired from and after the
Distribution Date (as hereinafter defined) other than Rights acquired pursuant
to Section 3(a), Section 11(i) and Section 22 hereof), warrants or options, or
otherwise; provided, however,
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that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or (B) the
right to vote or dispose of "beneficial ownership" (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement) (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 clause (B) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding (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 also then reportable by such Person 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 (or any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
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as described in the proviso to clause (B) of subparagraph (ii) of this
paragraph (c)) or disposing of any securities of the Corporation.
(e) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(g) "Common Shares" when used with reference to the Corporation shall
mean the Common Shares, .01 par value, of the Corporation. "Common Shares" when
used with reference to any Person other than the Corporation shall mean the
capital stock of such Person with the greatest voting power (or, if such Person
is a subsidiary of another Person, of the Person which ultimately controls such
first-mentioned Person), or the equity securities or other equity interest
having power to control or direct the management of such Person.
(h) "Common Share Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(i) "Current Per Share Market Price" shall have the meaning set forth
in Section 11(d)(i) hereof.
(j) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
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(k) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(l) "equivalent preferred shares" shall have the meaning set forth in
Section 11(b) hereof.
(m) "Exchange Act" shall have the meaning set forth in Section l(d)
hereof.
(n) "Exempt Person" shall mean the Corporation, any Subsidiary (as
such term is hereinafter defined) of the Corporation, in each case including,
without limitation, in its fiduciary capacity, or, any employee benefit plan of
the Corporation or of any Subsidiary of the Corporation, or any entity or
trustee holding Common Shares for or pursuant to the terms of any such plan or
for the purpose of funding any such plan or funding other employee benefits for
employees of the Corporation or of any Subsidiary of the Corporation, or
Xxxxxxx Xxxxxx, members of her immediate family, e.g., her sons, trusts for
their benefit or charitable foundations created by them and their respective
personal representatives (the "Xxxxxxx Xxxxxx Group") and their respective
successors and assigns provided that such successors and assigns and their
Affiliates and Associates including the Xxxxxxx Xxxxxx Group own after such
transfer 50% or more of the outstanding common shares of the Corporation or the
transfer to any such successor and assign is approved by a majority of the
Board of Directors of the Corporation.
(o) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
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(p) "Final Expiration Date" shall mean the close of business on April
14, 2009.
(q) "Person" shall mean any individual, firm, corporation, partnership
or other entity and shall include any successor (by merger or otherwise) of
such entity.
(r) "Preferred Shares" shall mean Series A Preferred Shares, $.01 par
value, of the Corporation.
(s) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(t) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(u) "Record Date" shall have the meaning set forth in the second
paragraph of this Agreement.
(v) "Redemption Price" shall have the meaning set forth in section
23(a) hereof.
(w) "Rights" shall have the meaning set forth in the second paragraph
of this Agreement.
(x) "Rights Certificates" shall have the meaning set forth in Section
3 hereof.
(y) "Section 11(a)(ii) Event" shall mean the event described in
Section 11(a)(ii) hereof.
(z) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in section 11(a)(iii) hereof.
(aa) "Section 13 Event" shall mean any event described in Clause (i),
(ii) or (iii) of Section 13(a) hereof.
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(bb) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition shall include, without
limitation, a report filed pursuant to Section 13(d) promulgated under the
Exchange Act) by the Corporation or by an Acquiring Person that an Acquiring
Person has become such or such earlier date as a majority of the Board of
Directors shall become aware of the existence of an Acquiring Person, provided
however, that if such person is thereafter determined not to have become an
Acquiring Person within the meaning of Section 1(a), then no Shares Acquisition
Date shall have been deemed to have occurred.
(cc) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(dd) "Subsidiary" shall mean, with reference to any Person, any
corporation of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or other
persons performing similar functions are beneficially owned, directly or
indirectly, by such Person, and any corporation or other entity that is
otherwise controlled by such Person.
(ee) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ff) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(gg) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
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Any determination required by the definitions contained in this
Section shall be made by the Board of Directors of the Corporation in their
good faith judgment, which determination shall be final and binding on the
Rights Agent.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Corporation hereby
appoints the Rights Agent to act as agent for the Corporation in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i)
the close of business on the tenth Business Day after the Shares Acquisition
Date, or (ii) the close of business on the tenth Business Day after the date of
the commencement of, or first public announcement of the intent to commence, a
tender or exchange offer by any Person (other than an Exempt Person) if upon
consummation thereof, any such Person other than an Exempt Person would be the
Beneficial Owner of 20% or more of the Common Shares then outstanding (the
earlier of such dates, including any such date which is after the date of this
Agreement and prior to the issuance of the Rights, being herein referred to as
the "Distribution Date"): (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for Common
Shares registered in the names of the holders thereof (which certificates for
Common Shares shall be deemed also to be Right Certificates) and not by
separate Right
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Certificates, and (y) the Rights will be transferable only in connection with
the transfer of the underlying Common Shares (including a transfer to the
Corporation). As soon as practicable after the Distribution Date, the
Corporation will prepare and execute and the Rights Agent will countersign, and
the Rights Agent, if requested by the Corporation, will send, by first-class,
insured, postage prepaid mail, or, if requested by or on behalf of a holder,
shall otherwise deliver, to each record holder of Common Shares as of the close
of business on the Distribution Date, at the address of such holder shown on
the records of the Corporation, one or more Right Certificates, in
substantially the form of Exhibit B hereto (the "Right Certificates"),
evidencing one Right for each Common Share so held, subject to adjustment. In
the event that an adjustment in the number of Rights per Common Share has been
made pursuant to Section 11(p) hereof, at the time of distribution the
Corporation shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Right Certificates evidencing
only whole numbers of Rights are distributed and cash is paid in lieu of
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) Promptly following the Record Date, the Corporation will send a
copy of a Summary of Rights to Purchase Preferred Shares, by first-class,
postage prepaid mail, to each record holder of Common Shares as of the close of
business on the Record
11
Date, at the address of such holder shown on the records of the Corporation.
With respect to certificates for Common Shares outstanding as of the Record
Date until the Distribution Date, the Rights will be evidenced by such
certificates for Common Shares registered in the names of the holders thereof,
and the registered holders of the Common Shares shall also be the registered
holders of the associated Rights. Until the Distribution Date (or the
Expiration Date), the transfer of any certificate for Common Shares in respect
of which Rights have been issued shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby.
(c) Rights shall be issued in respect of all Common Shares that shall
become outstanding after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date, except as otherwise provided in
Section 11(p). Certificates representing such Common Shares (and certificates
delivered pursuant to Sections 6 and 7(d)) shall also be deemed to be Right
Certificates, and 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 Xxxxxxx
Xxxxxx Corporation and Continental Stock Transfer & Trust Company, as
Rights Agent, dated as of April 15, 1999 as the same may be amended
from time to time (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of Xxxxxxx Xxxxxx Corporation and
available for inspection by the holder of this certificate. Under
certain circumstances set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. Xxxxxxx Xxxxxx
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Corporation will mail to the holder of this certificate a copy of the
Rights Agreement without charge within five days after receipt of a
written request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person who is, was
or becomes an Acquiring Person or any Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement) and any subsequent
holder of such Rights may become null and void. In no event may the
Rights be exercised after April 14, 2009.
With respect to such certificates containing the foregoing legend,
until the Distribution Date (or the earlier Expiration or Final Expiration
Date), the Rights associated with the Common Shares represented by such
certificates shall be evidenced by such certificates alone and registered
holders of Common Shares shall also be the registered holders of the associated
Rights, and the transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Corporation purchases or otherwise acquires any Common
Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed cancelled and retired so
that the Corporation shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES. (a) The Right
Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be
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substantially in the form set forth as Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Corporation may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Right Certificates,
whenever issued, shall be dated as of the Distribution Date, and on their face
shall entitle the holders thereof to purchase such number of Preferred Shares
as shall be set forth therein at the price per share set forth therein (the
"Purchase Price"), but in any event the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring
Person (or 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
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transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which is part of a plan,
arrangement or understanding which has as a primary-purpose or effect avoidance
of Section 7(e) hereof, and 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 and otherwise reasonably identifiable as such) the following
legend:
The Rights represented by this Right Certificate are or
were beneficially owned by a Person who was or became
an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby may become void in
the circumstances specified in Section 7(e) of such
Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Corporation by its Chairman of
the Board, President or any Vice President, either manually or by facsimile
signature, and have affixed thereto the Corporation's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Corporation, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Corporation who shall have signed any of the Right Certificates shall cease to
be such
15
officer of the Corporation before countersignature by the Rights Agent and
issuance and delivery by the Corporation, such Right Certificates nevertheless
may be countersigned by the Rights Agent, and issued and delivered by the
Corporation, with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Corporation;
and any Right Certificate may be signed on behalf of the Corporation by any
person who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Corporation to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such person
was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at one of its offices in the United States, 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,
the Right Certificate number and the date 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 Sections 4(b), 7(e) and 14 hereof, at any time after the
close of business on the Distribution Date, and at or prior to the close of
business of the Expiration Date, any Right Certificate or Right Certificates
16
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase
a like number of Preferred Shares (or, following a Triggering Event, Common
Shares, other securities or property, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate 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 principal office of the Rights Agent. Neither the
Rights Agent nor the Corporation 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 the Corporation shall have been provided with such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Corporation shall
reasonably request. Thereupon the Rights Agent shall, subject to Sections 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Corporation may require payment of a sum sufficient to
cover any tax or governmental charge that may be
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imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
Subject to the provisions of Section 7(e) hereof, at any time after
the Distribution Date and prior to the close of business on the earlier of the
Redemption Date or the Final Expiration Date, upon receipt by the Corporation
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the Corporation's request, reimbursement to the Corporation 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
Corporation will make and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.
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) 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
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purposes, together
with payment of the
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Purchase Price with respect to each surrendered Right for the total number of
shares (or other securities or property, as the case may be) as to which such
surrendered Rights are exercisable, at or prior to the earlier of (i) the Final
Expiration Date; (ii) the time at which the Rights are redeemed as provided in
Section 23 or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof, or (iv) immediately prior to the effective time of a
consolidation, merger or share exchange of the Company (A) into another
corporation or (B) with another corporation in which the Company is the
surviving corporation, but Common Shares are converted into cash and/or
securities of another corporation in either case pursuant to an agreement
entered into prior to the Share Acquisition Date, (such earliest time being
herein referred to as the "Expiration Date"). At the close of business on the
Final Expiration Date, the Rights shall become null and void.
(b) The "Purchase Price" for each one one-thousandth of a Preferred
Share pursuant to the exercise of a Right shall initially be $70, shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right (in cash, or by
certified bank check or money order
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payable to the order of the Corporation) of the Purchase Price for the shares
(or other securities or property, as the case may be) to be purchased and an
amount equal to any applicable transfer tax, the Rights Agent shall thereupon
promptly (i) (A) requisition from the Corporation or any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Preferred Shares to be purchased and the
Corporation will comply and hereby authorizes its transfer agent to comply with
all such requests, or (B) if the Corporation shall have elected to deposit the
Preferred Shares issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-thousandths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Corporation hereby directs the depositary agent to comply with
such request, (ii) when appropriate, requisition from the Corporation the
amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14, (iii) 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 (iv) when appropriate, after
receipt thereof, promptly deliver such cash to or upon the order
20
of the registered holder of such Right Certificate. In the event that the
Corporation is obligated to issue other securities (including Common Shares) of
the Corporation, pay cash and/or distribute other property pursuant to Section
11(a) hereof, the Corporation will make all arrangements necessary so that such
other securities, cash and/or property are available for distribution by (or on
behalf) of 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 and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the occurrence of a Triggering Event, any Rights beneficially owned
by (1) an Acquiring Person, or an Associate or Affiliate of an Acquiring
Person, (2) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(3) 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 (i) a transfer
(whether or not for consideration) from the Acquiring Person (or from any such
21
Associate or Affiliate) to holders of equity interests in such Acquiring Person
(or in any such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or any such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(ii) a transfer which the Board of Directors otherwise concludes (whether
before or after such transfer) is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
and subsequent transferees of such Persons, shall become null and void without
any further action, and any holder of such Rights shall thereupon have no
rights to exercise such Rights, whether under any provision of this Agreement
or otherwise, from and after the occurrence of a Triggering Event. The
Corporation shall use all reasonable efforts to insure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights or other Person for the inability to make any
determinations with respect to an Acquiring Person or their Affiliates,
Associates or transferees hereunder. No Right Certificate shall be issued
pursuant to Section 3 or Section 6 hereof that represents Rights that are or
have become void pursuant to the provisions of this paragraph, and any Right
Certificate delivered to the Rights Agent that represents Rights that are or
have become void pursuant to the provisions of this paragraph shall be
cancelled. The Corporation will inform the
22
Rights Agent of any rights that are of have become void pursuant to the
provisions of this paragraph.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Corporation shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported transfer or exercise as set forth in Section 6 or in this Section 7
unless the certificate contained in the form of assignment or election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such transfer or exercise shall have been completed and signed by the
registered holder thereof and the Corporation shall have been provided with
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Corporation 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 Corporation or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Corporation
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
23
acquired by the Corporation otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates to the Corporation,
or shall, at the written request of the Corporation, destroy such cancelled
Right Certificates and deliver a certificate of destruction thereof to the
Corporation.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES. The
Corporation covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares (and, following
the occurrence of a Triggering Event, Common Shares and/or other securities) or
any authorized and issued Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) held in its treasury,
the number of Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) that will be sufficient (in
accordance with the terms of this Agreement, including Section 11(a)(iii)
hereof) to permit the exercise in full of all outstanding Rights. So long as
the Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) issuable upon the exercise of Rights may
be listed on any national securities exchange or quotation system, the
Corporation shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance to be
listed on such exchange or quotation system upon official notice of issuance in
connection with such exercise.
24
The Corporation shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act of 1933 (the "Act"), with
respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the date of the expiration of the Rights. The
Corporation will also take such action as may be appropriate under the blue sky
laws of the various states. The Corporation may temporarily suspend, for a
period of time not to exceed ninety (90) days, the exercisability of the Rights
in order to prepare and file such registration statement or in order to comply
with such blue sky laws. Upon any such suspension, the Corporation shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction, unless the requisite qualification in such jurisdiction shall
have been obtained and until a registration statement has been declared
effective.
The Corporation covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred
25
Shares (and, following the occurrence of a Triggering Event, Common Shares
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 shares.
The Corporation 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 Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) upon the exercise of Rights. The
Corporation shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates for the
Preferred Shares (and, following the occurrence of a Triggering Event, Common
Shares and/or other securities) in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise, or
to issue or deliver any certificates for Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities) 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 Corporation's satisfaction
that no such tax is due.
26
SECTION 10. PREFERRED SHARES RECORD DATE. Each person in whose name
any certificate for Preferred Shares (or Common Shares 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 the Preferred Shares
(or Common Shares 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; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Shares (or Common Shares and/or other securities, as the case may be)
transfer books of the Corporation 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 Shares (or
Common Shares and/or other securities, as the case may be) transfer books of
the Corporation are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a shareholder of the Corporation 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
Corporation, except as provided herein.
27
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Corporation shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of shares or (D) issue
any shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Corporation 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 capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares transfer books of the Corporation
were open, he would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision,
28
combination or reclassification; provided however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Corporation issuable
upon exercise of one Right. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required by Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event
any Person becomes an Acquiring Person then, promptly following the first
occurrence of such Section 11(a)(ii) Event, proper provision shall be made so
that each holder of a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon exercise thereof at
the then-current Purchase Price in accordance with the terms of this Agreement,
in lieu of a number of one one-thousandths of a Preferred Share, such number of
Common Shares of the Corporation as shall equal the result obtained by (x)
multiplying the then-current Purchase Price by the then number of one
one-thousandths of a Preferred Share for which a Right assuming it was
exercisable, and could have been exercised immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which,
following such first occurrence shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by 50%
of the
29
current per share market price (determined pursuant to Section 11(d) hereof) of
the Common Shares on the date of such first occurrence (such number of shares,
the "Adjustment Shares"); provided, however, that the Purchase Price and the
number of Common Shares so receivable upon exercise of a Right shall thereafter
be subject to further adjustment as appropriate in accordance with Section
11(f) hereof.
(iii) The Corporation may at its option (evidenced by a
certified resolution of the Corporation's Board of Directors delivered to the
Rights Agent) substitute for a Common Share issuable upon the exercise of
Rights in accordance with the foregoing subparagraph (ii) such number of
fractions of Preferred Shares having an aggregate current market value equal to
the current per share market price of a Common Share. In the event that the
number of Common Shares which are authorized by the Corporation's Certificate
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) of this Section 11(a), the Corporation shall to the extent permitted by
applicable law and any material agreement then in effect to which the
Corporation is a party: (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, (other than Rights which have become void pursuant to Section
30
7(e)) make adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Shares or other equity securities of the Corporation
(including, without limitation, preferred shares which the Board of Directors
of the Corporation has deemed to have the same value as Common Shares (such
preferred shares, "common share equivalents")), (4) debt securities of the
Corporation, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value (less the amount of any reduction
in the Purchase Price), where such aggregate value has been determined by the
Board of Directors of the Corporation based upon the advice of one or more
investment or financial advisors selected by the Board of Directors of the
Corporation; provided, however, if the Corporation shall not have made adequate
provisions to deliver value pursuant to clause (B) above within thirty (30)
days following the first occurrence of a Section 11(a)(ii) Event (the "Section
11(a)(ii) Trigger Date"), then the Corporation shall be obligated to deliver,
to the extent permitted by applicable law and any material agreement then in
effect to which the Corporation is a party, upon the surrender for exercise of
a Right and without requiring payment of the Purchase Price, Common Shares (to
the extent available) and then, if necessary, such number of Preferred Shares
or fractions of Preferred Shares (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread. If the
31
Board of Directors of the Corporation shall determine in good faith that it is
likely that sufficient additional Common Shares 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
Corporation 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 Corporation determines that some action need
be taken pursuant to the second and/or third sentences of this Section
11(a)(iii), the Corporation (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 second sentence and to determine the value thereof. In the event of any
such suspension, the Corporation shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Common Shares shall be
the current per share market price (as determined pursuant to Section 11(d)
hereof) of the Common Shares on the Section 11(a)(ii) Trigger Date and the
value of any "common share
32
equivalents" shall be deemed to have the same value as the Common Shares on
such date.
(iv) In lieu of issuing Common Shares in accordance with
subparagraph (ii) of this Section 11(a), the Corporation may with respect to
each Right, if a majority of members of the Board of Directors determines that
such action is in the best interests of the Corporation and not contrary to the
interests of the holders of Rights, make adequate provision to substitute for
the Adjustment Shares, (x) upon the surrender for exercise of a Right and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in Purchase
Price, (3) Common Shares, or other equity securities of the Corporation
(including without limitation common share equivalents), (4) debt securities of
the Corporation, (5) other assets or (6) any combination of the foregoing
having an aggregate value equal to the Current Value where such aggregate value
has been determined by the Board of Directors of the Corporation based upon the
advice of one or more investment or financial advisers selected by the Board of
Directors of the Corporation or (y) upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, (1) cash, (2) Common
Shares or other equity securities of the Corporation (including, without
limitation, common share equivalents), (3) debt securities of the Corporation,
(4) other assets or (5) any combination of the foregoing, having an aggregate
value equal to the Spread where such aggregate value has been determined by the
Board of Directors of the Corporation
33
based upon the advice of one or more investment or financial advisors selected
by the Board of Directors of the Corporation.
(b) In the event the Corporation shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
current per share market price of the Preferred Shares (as defined in Section
11(d)) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus
the number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the denominator
of which shall be the number of Preferred Shares outstanding on such record
date plus the number of additional Preferred Shares and/or
34
equivalent preferred shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible)
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Corporation issuable upon exercise of one Right. In case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Corporation, whose
determination shall be described in a statement filed with the Rights Agent
(and shall be binding on the Rights Agent and the holders of the Rights).
Preferred Shares owned by or held for the account of the Corporation shall not
be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights or warrants are not so issued, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In the event the Corporation shall fix a record date for the
making of a distribution to all holders of the Preferred Shares (including any
such distribution made in connection with a consolidation or merger in which
the Corporation is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular periodic cash dividend out of the
35
earnings or the retained earnings of the Corporation or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current per share market price of the Preferred Shares (as defined in Section
11(d)) on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Corporation, 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 Preferred Share, and the
denominator of which shall be such current per share market price of the
Preferred Shares provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Corporation to be issued upon exercise of
one Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not 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) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) and Section 11(a)(iv) hereof,
the "current per share market price" of
36
the Preferred Shares on any date shall be deemed to be the average of the daily
closing prices per share of such Preferred Shares for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the current per share market
price of the Preferred Shares is determined during a period following the
announcement by the issuer of such Preferred Shares of (A) a dividend or
distribution on such Preferred Shares payable in such Preferred Shares or
securities convertible into such Preferred Shares (other than the Rights), or
(B) any subdivision, combination or reclassification of such Preferred Shares,
and prior to the expiration of the requisite 30 Trading Day period after the
exdividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
"current per share market price" shall be appropriately adjusted to take into
account ex-dividend trading. The closing price for each Trading 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 Preferred Shares 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
37
national securities exchange on which the Preferred Shares are listed or
admitted to trading or, if the Preferred Shares are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then
in use, or, if on any such date the Preferred Shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Preferred Shares selected by
the Board of Directors of the Corporation. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the Preferred
Shares are listed or admitted to trading is open for the transaction of
business or, if the Preferred Shares are not listed or admitted to trading on
any national securities exchange, a Business Day. If the current per share
market price of the Preferred Shares on any date cannot be determined in the
manner provided above, the "current per share market price" of the Preferred
Shares shall be conclusively deemed to be an amount equal to one thousand (as
such number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common Shares
occurring after the date of this Agreement) multiplied by the current per share
market price of the Common Shares. If neither the Common Shares nor the
Preferred Shares is publicly held or so
38
listed or traded, "current per share market price" shall mean the fair value
per share as determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) and Section 11(a)(iv) hereof,
the "current per share market price" of the Common Shares shall be determined
in the same manner set forth above for Preferred Shares in clause (i) of this
Section 11(d), provided, however, for the purpose of any computation in Section
11(a)(iii) and Section 11(a)(iv) hereof, the "current per share market price"
of the Common Shares on any date shall be deemed to be the average of the daily
closing prices per Common Share for ten consecutive Trading Days immediately
following such date and the reference to the "30 Trading Day period" in Section
11(d)(i)(B) shall be the "ten Trading Day period."
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a Common Share or other share or
one-ten-thousandth of a Preferred Share,
39
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 requires such
adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11 or
Section 13 hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in Section 11(a),
(b), (c), (e), (g), (h), (i), (j), (k) and (m) and the provisions of Sections
7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Corporation subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Preferred Shares
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Corporation shall have exercised its election as
provided in Section 11(i), below, upon each adjustment of the Purchase Price as
a result of the calculations
40
made in Sections 11(b) and (c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of one one-thousandths of a Preferred
Share (calculated to the nearest one-millionth) obtained by (i) multiplying (x)
the number of one one-thousandths of a share covered by a Right immediately
prior to such adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) In lieu of the adjustment in the number of one one-thousandths of
a Preferred Share purchasable upon the exercise of a Right, the Corporation
instead may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of
shares or fraction of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price.
The Corporation shall make a public announcement of its election to adjust the
number of Rights,
41
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if Right
Certificates have been issued, shall be at least 10 days later than the date of
such public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Corporation, 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
Corporation, 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 Corporation, 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 such public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Preferred Shares issuable upon
42
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
Preferred 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 the then par value, if any, of the Preferred Shares
issuable upon exercise of the Rights, the Corporation shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and nonassessable
Preferred Shares 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 Corporation may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date the Preferred Shares and other capital stock or securities of the
Corporation, if any, issuable upon such exercise over and above the Preferred
Shares and other capital stock or securities of the Corporation, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Corporation 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.
43
(m) Anything in this Section 11 to the contrary notwithstanding, the
Corporation 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 it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any of the Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares, stock
dividends or issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Corporation to holders of its Preferred
Shares shall not be taxable to such shareholders.
(n) The Corporation covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer (or permit any Subsidiary 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 Corporation and its Subsidiaries (taken
as a whole) to, any other Person if 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.
44
(o) The Corporation covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Corporation shall at any time after the date of this Agreement
and prior to the Distribution Date (i) pay a dividend on the outstanding Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares,
(iii) combine the outstanding Common Shares into a smaller number of shares, or
(iv) issue any shares of its capital stock in a reclassification of the
outstanding Common Shares, the number of Rights associated with each Common
Share 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 Common Share following any such event
(including other Common Shares issued after the date of such event, but prior
to the Distribution Date) shall equal the result obtained by multiplying the
number of Rights associated with each Common Share immediately prior to such
event by a fraction the numerator of which shall be the total number of Common
Shares outstanding immediately prior to the occurrence of the event and the
denominator of which shall be
45
the total number of Common Shares outstanding immediately following the
occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Corporation shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Shares and the Common Shares a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 26 hereof.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) In the event that, following the Distribution Date, directly
or indirectly, (i) the Corporation shall consolidate with, or merge with and
into, any other Person, and the Corporation shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) any Person shall
consolidate with the Corporation, or merge with and into the Corporation, and
the Corporation 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 Shares of the Corporation shall be changed into or
exchanged for stock or other securities of any other Person or cash or any
other property, or (iii) the Corporation shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets
46
or earning power aggregating more than 50% of the assets or earning power of
the Corporation and its Subsidiaries (taken as a whole and calculated on the
basis of the Corporation's most recent regularly prepared financial statements)
to any Person or Persons (other than the Corporation or any Subsidiary of the
Corporation), then, and in each such case, proper provision shall be made so
that (1) each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the exercise thereof at the
then-current Purchase Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid, nonassessable and
freely tradable Common Shares of the Principal Party (as hereinafter defined),
not subject to any rights of first refusal or similar rights, as shall be equal
to the result obtained by (x) multiplying the then-current Purchase Price by
the number of one one-thousandths of a Preferred Share for which a Right is
then exercisable (or, if such Right is not currently exercisable for a number
of Preferred Shares) the number of such fractional shares for which it was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event and dividing that product by (y) 50% of the current per share market
price of the Common Shares of such Principal Party (determined pursuant to
Section 11(d)(ii) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; provided that the Purchase Price and the number of
Common Shares of such Principal Party issuable upon exercise of each Right
shall be further
47
adjusted as provided in Section 11(f) of this Agreement to reflect any events
occurring in respect of such Principal Party after the date of such
consolidation, merger, sale or transfer; (2) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Corporation
pursuant to this Agreement; (3) the term "Corporation" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended that
the provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of an event set forth in Section 13(a) hereof;
(4) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Common Shares in accordance with
Section 9) 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 its Common Shares thereafter deliverable upon
the exercise of the Rights; provided that, upon the subsequent occurrence of
any consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Purchase Price as provided in this Section 13(a), such cash, shares, rights,
warrants and other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the Common
Stock of the Principal
48
Party receivable upon the exercise of a Right pursuant to this Section 13(a),
and such Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property; and (5) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first occurrence of any
event set forth in this Section 13(a).
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (i) or (ii)
of the first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into which the Common Shares are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
of the shares of Common Stock which has the greatest aggregate market value of
shares outstanding, or (B) if no securities are so issued, (x) the Person that
is the other party to the merger, if such Person survives said merger, or, if
there is more than one such Person, the Person the shares of Common Stock of
which have the greatest aggregate market value of shares outstanding or (y) if
the Person that is the other party to the merger does not survive the merger,
the Person that does survive the merger (including the Corporation if it
survives) or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in (iii) of the
first sentence in Section 13(a), the Person that is the
49
party receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if such Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever of such
Persons as is the issuer of Common Stock having the greatest aggregate market
value of shares outstanding; provided, however, that in any case described in
the foregoing clauses (b)(i) and (b)(ii), (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value or (3) if such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2)
above shall apply to each of the owners having an interest in the venture as if
the Person owned by the joint venture was a Subsidiary of both or all of such
joint
50
venturers, and the Principal Party in each such case shall bear the obligations
set forth in this Section 13 in the same ratio as its interest in such Person
bears to the total of such interests.
(c) The Corporation shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have sufficient
Common Shares authorized to permit the full exercise of the Rights and prior
thereto the Corporation 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 that such
consolidation, merger, sale or transfer of assets shall not result in a default
by the Principal Party under this Agreement as the same shall have been assumed
by the Principal Party pursuant to paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times meeting
the requirements of the Act) until the Expiration Date; and
51
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York Stock
Exchange or on another national securities exchange to list or admit to trading
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on the New York Stock Exchange or such securities
exchange, or, if the Common Stock of the Principal Party shall not be listed or
admitted to trading on the New York Stock Exchange or a national securities
exchange, to cause the Rights and the securities receivable upon exercise of
the Rights to be reported by such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue (other than to holders of
Rights pursuant to this Section 13), in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party
52
at less than the then current market price per share thereof (determined
pursuant to Section 11(d) hereof) or securities exercisable for, or convertible
into, Common Stock of such Principal Party at less than such then current
market price, or (ii) providing for any special payment, tax or similar
provision in connection with the issuance of the Common Stock of such Principal
Party pursuant to the provisions of Section 13, then, in such event, the
Corporation hereby agrees with each holder of Rights that it shall not
consummate any such transaction unless prior thereto the Corporation and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event 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 Corporation shall not be required to issue fractions of
Rights, except prior to the Distribution Date as
53
provided in Section 11(p) hereof, or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Right Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right. For 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 Trading Day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other similar system
then in use or, if on any such date the Rights are not quoted by any such
organization, the
54
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 Corporation. 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 Corporation shall be used.
(b) The Corporation shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a share may, at the election of the Corporation, be evidenced
by depositary receipts, pursuant to an appropriate agreement between the
Corporation and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares. In lieu of fractional Preferred Shares that are not
integral multiples of one one-thousandth of a Preferred Share, the Corporation
shall 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 a Preferred Share. For purposes of this
Section 14(b), the current market
55
value of a Preferred Share shall be the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Corporation
shall not be required to issue fractions of Common Shares upon exercise of the
Rights or to distribute certificates which evidence fractional Common Shares.
In lieu of fractional Common Shares, the Corporation shall 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 Common Share. For purposes of this Section 14(c), the
current market value of one Common Share shall be the closing price of one
Common Share (as determined pursuant to of Section 11(d)(ii) 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 permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
56
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of any Common Shares), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Corporation 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 under, and injunctive relief against
actual or threatened violations of, the obligations of any Person subject to
this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Corporation and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
57
(c) the Corporation and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Corporation or the Rights Agent) for
all purposes whatsoever, and neither the Corporation nor the Rights Agent shall
be affected by any notice to the contrary.
(d) notwithstanding anything in this Agreement to the contrary,
neither the Corporation 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 Corporation
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 SHAREHOLDER. No
holder, as such, of any Right Certificate shall
58
be entitled to vote, receive dividends or be deemed for any purpose the holder
of the Preferred Shares or any other securities of the Corporation 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 Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in Section
25 hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. The Corporation 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 Corporation also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability or expense
incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with
59
the acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises. This
indemnification shall survive the expiration or termination of the Rights or
this Rights Agreement.
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 Preferred or Common Shares or for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust or stock transfer business of the Rights Agent or any successor Rights
Agent, or any Affiliate of the Rights Agent that undertakes the corporate trust
or stock transfer business of the Rights Agent as a result of transfer,
assignment or any other
60
means, 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
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such
61
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 Corporation 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 Corporation), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current per share market price") be proved or established by
the Corporation 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, a
Vice President, the Treasurer or the Secretary of the Corporation and delivered
to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or
62
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 to the Corporation and
any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except as to 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 Corporation 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 as to its countersignature thereof);
nor shall it be responsible for any breach by the Corporation of any covenant
or condition contained in this Agreement or in any Right Certificate; nor shall
it be responsible for any change in the transferability or exercisability of
the Rights or any adjustment required under the provisions of Sections 11 or 13
or any other provision hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment);
nor shall it by any act
63
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
purchased pursuant to this Agreement or any Right Certificate or as to whether
any Preferred Shares or Common Shares will, when so issued, be validly
authorized and issued, fully paid and nonassessable; nor will it be liable for
any federal or state transfer taxes or charges that may be due upon the
issuance or transfer of any Preferred Share, Common Share or Right Certificate.
(f) The Corporation agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, a Vice President, the
Secretary or the Treasurer of the Corporation, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with the instructions of any such officer or for any delay in acting
while waiting for such instructions. When applying to any such officer for
instructions, the Rights Agent may set forth in writing (i) any proposed action
or
64
omission of the Rights Agent with respect to its duties or obligations under
this Agreement and (ii) the date on or after which the Rights Agent proposes
such action will be taken or omitted. Such date shall not be less than three
Business Days after any such officer receives such application for instructions
from the Rights Agent, unless an earlier date is mutually agreed to by the
parties. Unless the Rights Agent has received written instructions from the
Corporation (including any such officer) with respect to such proposed action
or omission prior to such date (or, if longer, in the case of a proposed action
to be taken, prior to the Rights Agent actually taking such action), the Rights
Agent shall not be liable for the actions or omissions set forth in such
application, provided that such action or omission does not violate any express
provisions of this Rights Agreement. The Rights Agent may execute and exercise
any of the rights or powers vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents.
(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 Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or
lend money to the Corporation 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 Corporation or for any
other legal entity.
65
(i) 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
hereunder 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 the Rights Agent.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting with the
Corporation.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Corporation and to each transfer
agent of the Common Shares and the Preferred Shares by registered or certified
mail, and to the holders of the Right Certificates by first class mail. The
Corporation may remove the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Shares and the
Preferred Shares, by registered or certified mail, and to the holders of
66
the Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Corporation shall
appoint a successor to the Rights Agent. If the Corporation shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Corporation), then the incumbent Rights Agent or 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 Corporation or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States or
any state therein, in good standing, having a principal office in a state in
the United States, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100 million or (b) an
Affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall
67
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 Corporation shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares and the Preferred Shares, and as soon as practicable thereafter mail a
notice thereof in writing to the registered holders of the Right Certificates
(which notice may be included in any regularly scheduled mailing to
shareholders whether such mailing is by first-class mail or otherwise). 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
Corporation 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 per share and/or 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.
SECTION 23. REDEMPTION AND TERMINATION. (a) The Board of
Directors of the Corporation may, at its option, at any time
68
prior close of business on the earlier of (i) the Shares Acquisition date (or
such later date as the Board of Directors may determine) or (ii) 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 such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price").
(b) Immediately upon the action of the Board of Directors of the
Corporation ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price
for each Right so held. Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Corporation shall give notice of
such redemption to the Rights Agent and to the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. The failure to
give notice or any defect in notice shall not affect the validity of the
redemption. Each such notice of redemption will state the
69
method by which the payment of the Redemption Price will be made. Neither the
Corporation 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 Shares prior to the Distribution Date.
SECTION 24. EXCHANGE. (a) The Board of Directors of the Corporation
may, at its option, at any time after any Person first becomes an Acquiring
Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have not become effective or that have
become void pursuant to the provisions of Section 7(e) hereof) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such amount per Right being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such exchange at any time (1)
after any Person (other than an Exempt Person), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of Common Shares
aggregating 50% or more of the Common Shares then outstanding. From and after
the occurrence of a Section 13 Event, any Rights that theretofore have not been
exchanged pursuant to this Section 24(a) shall thereafter be exercisable only
in accordance with Section 13 and may not be exchanged pursuant to this Section
24(a). The exchange of the
70
Rights by the Board of Directors may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole discretion
may establish.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Corporation ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of Common
Shares equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Corporation shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Corporation shall
promptly mail a notice of any such exchange to all of the holders of the Rights
so exchanged at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the Common
Shares for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged.
(c) The Corporation may at its option and in the event that there
shall not be sufficient Common Shares issued but not outstanding or authorized
but unissued to permit an exchange of
71
Rights as contemplated in accordance with this Section 24, the Corporation
shall substitute to the extent of such insufficiency, for each Common Share
that would otherwise be issuable upon exchange of a Right, a number of
Preferred Shares or fraction thereof (or equivalent preferred shares as such
term is defined in Section 11(b)) such that the current per share market price
(determined pursuant to Section 11(d) hereof) of one Preferred Share (or
equivalent preferred share) multiplied by such number or fraction is equal to
the current per share market price of one Common Share (determined pursuant to
Section 11(d) hereof) as of the date of such exchange.
SECTION 25. NOTICE OF CERTAIN EVENTS. In case the Corporation shall
propose, at any time after the Distribution Date, (a) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of Preferred Shares (other than a regular
periodic cash dividend out of earnings or retained earnings of the Corporation)
or (b) to offer to the holders of its Preferred Shares rights or warrants to
subscribe for or to purchase any additional Preferred Shares or shares of stock
of any class or any other securities, rights or options, or (c) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), or (d) to
effect any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
72
other transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Corporation and its Subsidiaries (taken as a whole) to,
any other Person, or (e) to effect the liquidation, dissolution or winding up
of the Corporation, then, in each such case, the Corporation shall give to each
holder of a Right Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the Preferred Shares, 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 20 days prior to the
record date for determining holders of the Preferred Shares for purposes of
such action, and in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Preferred Shares, whichever shall be the earlier.
In case any Section 11(a)(ii) Event shall occur, then, in any such
case, (i) the Corporation shall as soon as practicable thereafter give to each
holder of a Right Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights
73
under Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Shares shall be deemed thereafter to refer to Common
Shares and/or, if appropriate, other securities.
SECTION 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate to or on the Corporation shall be
sufficiently given or made if sent by first class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Xxxxxxx Xxxxxx Corporation
Xxx Xxxxxx Xxxx
Xxx, Xxx Xxxx 00000-0000
Attention: Chairman
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Corporation or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Corporation) as follows:
Continental Stock Transfer & Trust Company
Attention: Compliance Department
0 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Subject to the provisions of Sections 19 and 21, notices or demands authorized
by this Agreement to be given or made by the Corporation or the Rights Agent
to the holder of any Right Certificate shall be sufficiently given or made if
sent by first class mail, postage prepaid, addressed to such holder at the
74
address of such holder as shown on the registry books of the
Corporation.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Except as otherwise provided
in this Section 27, for so long as the Rights are then redeemable, the
Corporation may in its sole and absolute discretion, and the Rights Agent shall
if the Corporation so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of the Rights. At
any time when the Rights are no longer redeemable, except as otherwise provided
in this Section 27, the Corporation may, and the Rights Agent shall, if the
Corporation so directs, supplement or amend this Agreement without the approval
of any holders of Rights Certificates in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen any
time period hereunder (including any time period used for determining whether
or not a Distribution Date has occurred), or (iv) change or supplement the
provisions hereunder in any manner which the Corporation may deem necessary or
desirable; provided that no such supplement or amendment shall adversely affect
the interests of the holders of Rights as such (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person), and no such amendment may
cause the Rights again to become redeemable or cause the Agreement again to
become amendable other than in accordance with this sentence. Notwithstanding
anything contained in this
75
Agreement to the contrary, no supplement or amendment shall be made which
decreases the Redemption Price. Upon the delivery of a certificate from an
appropriate officer of the Corporation 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.
SECTION 28. SUCCESSORS. All the covenants and provisions
of this Agreement by or for the benefit of the Corporation or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
(a) For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares 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 Corporation 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 Corporation, 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
76
redeem or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purpose of
clause (ii) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith, shall (i) be final, conclusive and binding
on the Corporation, the Rights Agent, the holders of the Right Certificates and
all other parties and (ii) not subject the Board to any liability to the
holders of the Right Certificates.
(b) For purposes of this Agreement, any determination to be made by
the Board of Directors of the Corporation may be by a duly constituted
committee thereof if so authorized to act by the Board of Directors pursuant to
the Corporation's By-Laws and enabling resolutions, and in such circumstances
any reference to the Board of Directors herein shall be deemed to include a
reference to such committee.
SECTION 30. BENEFIT OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Corporation, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, registered holders of the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Corporation, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the
Distribution Date, registered holders of the Common Shares).
77
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
SECTION 32. GOVERNING LAW. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of Delaware applicable to contracts made
and to be performed entirely within such State.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each such counterpart 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 HEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
78
Attest: XXXXXXX XXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxx
-------------------------- -------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxxxx Xxxxxx
------------------------- -----------------------
Title: Secretary Title: Chairman - CEO
------------------------ ----------------------
Attest: CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------- --------------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxxx
------------------------ ------------------------
Title: Assistant Secretary Title: Vice President
----------------------- -----------------------
79
EXHIBIT A
Form of Certificate of Designation, Preferences and Rights of Series A
Preferred Stock of Xxxxxxx Xxxxxx Corporation.
A-i
EXHIBIT A
CERTIFICATE OF DESIGNATION
OF
XXXXXXX XXXXXX CORPORATION
The undersigned corporation hereby certifies as follows:
FIRST: The name of the corporation is
XXXXXXX XXXXXX CORPORATION
SECOND: The following resolutions establishing a new series of
Preferred Shares were adopted by the Board of Directors in accordance with
Section 151 of the General Corporation Laws of the State of Delaware:
RESOLVED, that twenty thousand (20,000) of Preferred Shares, with a
par value of $.01 dollars per share, are to be designated Series A, and be it
further
RESOLVED, that the relative rights, privileges, preferences,
restrictions and/or limitations of those shares designated Series A are as
follows:
(1) Dividends and Distributions.
(A) The holders of the Series A Preferred Shares shall be
entitled to receive, when and as declared by the Board of Directors, out of
funds legally available for that purpose, cumulative dividends in cash on the
1st 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 Series A
Preferred Share or fraction thereof, in an amount per
A-i
share per quarter (rounded to the nearest cent) equal to the greater of (i) $10
or (ii) subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount, (payable in kind) of all non-cash dividends or
other distributions (other than a dividend payable in Common Shares or a
subdivision of the outstanding Common Shares, by reclassification or
otherwise), declared on the Common Shares, since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of a Series A Preferred Share
or fraction thereof; provided that, in the event no dividend or distribution
shall have been declared on the Common Shares during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend on the Series A Preferred Shares of $10 per share
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. In the event the Corporation shall at any time declare or pay any
dividend on the Common Shares payable in Common Shares, or effect a subdivision
or combination of the outstanding Common Shares (by reclassification or
otherwise) into a greater or lesser number of Common Shares, then in each such
case the amount to which holders of the Series A Preferred Shares were entitled
immediately prior to such event under clause (ii) of the next preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of
A-ii
which is the number of Common Shares that were outstanding immediately prior to
such event.
(B) The Board of Directors may fix a record date for the
determination of holders of the Series A Preferred Shares entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be no more than 60 days prior to the date fixed for the payment thereof.
Dividends shall begin to accrue and be cumulative on outstanding Series A
Preferred Shares from the Quarterly Dividend Payment Date next preceding the
date of issue of such Series A Preferred Shares, unless the date of the issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of the Series A Preferred Shares entitled to received 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 Series A 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.
(2) Liquidation Rights. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the
A-iii
Corporation, then, subject to the provisions of this Article Fourth, the
holders of the Series A Preferred Shares shall be entitled to receive, from the
assets of the Corporation available for distribution to shareholders, an amount
equal to all dividends accumulated to the date of final distribution plus an
amount equal to the greater of (A) $10,000 per share or (B) an aggregate amount
per share, subject to the provision for adjustment hereinafter set forth, of
1,000 times the aggregate amount to be distributed per share to holders of
Common Shares. All such preferential amounts shall be paid or set apart for
payment before the payment or setting apart for payment of any amount for, or
the distribution of any assets of the Corporation to, the holders of any class
of shares ranking junior as to assets to the Series A Preferred Shares, or the
holders of any series of Preferred Shares ranking junior as to assets to the
Series A Preferred Shares. In the event the Corporation shall at any time
declare or pay any dividend on Common Shares payable in Common Shares, or
effect a subdivision or combination of the outstanding Common Shares (by
reclassification or otherwise) into a greater or lesser number of Common
Shares, then in each such case the aggregate amount to which holders of the
Series A Preferred Shares were entitled immediately prior to such event under
clause (B) of the next preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to such event.
A-iv
(3) Redemption. The Series A Preferred Shares shall not be
redeemable.
(4) Voting Rights. Each Series A Preferred Share shall
entitle the holder thereof to one vote on all matters submitted to a vote of
the shareholders of the Corporation. The holders of fractional Series A
Preferred Shares shall not be entitled to any vote on any matter submitted to a
vote of the shareholders of the Corporation.
(5) Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Shares are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on outstanding Series a Preferred Shares shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Shares;
(ii) redeem, purchase or otherwise acquire for
consideration shares ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Shares;
provided that the Corporation may at any time redeem, purchase or otherwise
acquire any such junior shares in exchange for any shares of the Corporation
ranking junior (either as to
A-v
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Shares;
(iii) declare or pay dividends on or make any
other distributions on any shares ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with a Series A Preferred
Shares, except dividends paid ratably on the Series A Preferred Shares and all
such parity shares 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;
(iv) purchase or otherwise acquire for
consideration any Series A Preferred Shares, or any shares ranking on a parity
with the Series A 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 Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
the Corporation unless the Corporation could, pursuant to paragraph (A) of this
subparagraph 5, purchase or otherwise acquire such shares at such time and in
such manner.
(6) Reacquired Shares. Any Series A Preferred Shares
purchased or otherwise acquired by the Corporation in any manner
A-vi
whatsoever shall be retired promptly after the acquisition thereof. All such
shares shall upon their retirement become authorized but unissued Preferred
Shares and may be reissued as part of a new series of Preferred Shares to be
created by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
(7) Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the Common Shares are exchanged for or changed into other shares or securities,
cash and/or any other property, then in any such case the Series A Preferred
Shares shall at the same time be similarly exchanged or changed in an amount
per share, subject to the provision for adjustment hereinafter set forth, equal
to 1000 times the aggregate amount of shares, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
Common Share is changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on Common Shares payable in Common Shares, or
effect a subdivision or combination of the outstanding Common Shares (by
reclassification or otherwise) into a greater or lesser number of Common
Shares, then in each such case the amount set forth in the next preceding
sentence with respect to the exchange or change of Series A Preferred Shares
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of Common Shares outstanding immediately after such
A-vii
event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
IN WITNESS WHEREOF, the corporation has caused this Certificate to be
executed under its corporate seal this ____ day of _______________, 1999.
XXXXXXX XXXXXX CORPORATION
By: _______________________________
Xxxxxxx Xxxxxx, Chairman and
Chief Executive Officer
Attest:
----------------------------------
(Secretary or Assistant Secretary)
A-viii
EXHIBIT B
Form of Right Certificate
B-i
EXHIBIT B
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R-____________ _____________Rights
NOT EXERCISABLE AFTER APRIL 14, 2009 OR EARLIER IF REDEEMED BY THE COMPANY (AS
DEFINED HEREINAFTER). 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, RIGHT BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERM IS DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1
Rights Certificate
XXXXXXX XXXXXX CORPORATION
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 Shareholder
Rights Plan, the terms of which are set forth in the Rights Agreement dated as
of April 15, 1999 (the "Rights Agreement"), between Xxxxxxx Xxxxxx Corporation,
a Delaware corporation (the "Company"), and the Continental Stock Transfer &
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. (New York, New York time) on April 14, 2009 at the
office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth of a fully paid, nonassessable
Series A Preferred Share (the "Preferred Shares") of the Company, at a purchase
price of $70 per one one-thousandth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase and related Certificate duly executed. The Purchase Price may be
paid in cash or by certified bank check or money order payable to the order of
--------
(1) The portion of the legend in brackets shall be inserted only if applicable,
shall be modified to apply to an Acquiring Person, as applicable, and shall
replace the preceding sentence.
B-i
the Company. The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above are the number and Purchase
Price as of April 30, 1999, based on the Preferred Shares as constituted at
such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquired Person, or an Affiliate
or Associate of any such 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 any such Person, such Rights
shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Preferred Shares or other securities which may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions,
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are available upon written request to the
Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and the date evidencing Rights entitling the
holder to purchase a like aggregate number of Preferred Shares as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its
B-ii
option at a redemption price of $.001 per Right at any time prior to the Shares
Acquisition Date.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting shareholders except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS, the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of: ____________, _____.
ATTEST: XXXXXXX XXXXXX CORPORATION
________________________________ By:___________________________
Secretary
Title:________________________
Countersigned:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, Rights Agent
By:____________________________
Authorized Signature
B-iii
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _______________________________ hereby sells,
assigns and transfers unto ________________________________________________
(Please print name and address of transferee)
____________________________________________________________________________
____________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Date: __________________, ______
---------------------------
Signature
Signature Guaranteed:__________________________
B-iv
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate
[ ] is [ ] is not
being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it
[ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated: ____________________, _____
---------------------------
Signature
Signature Guaranteed:_______________________
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-v
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise
Rights represented by Rights Certificate)
To: XXXXXXX XXXXXX CORPORATION
The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Rights Certificate to purchase the Preferred Shares
issuable upon the exercise of the Rights (or such other securities or property
of the Company or of any other person which may be issuable upon the exercise
of the Rights) and requests that certificates for such shares be issued in the
name of and delivered to:
Please insert social security or other identifying #:_____________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying #:______________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated: __________________, ______
---------------------------
Signature
Signature Guaranteed:_________________________
B-vi
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an
Acquiring Person, or an Affiliate or Associate of any such
Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it
[ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or became an Acquiring Person, or an
Affiliate or Associate of any such Person.
Dated: _______________, _____
---------------------------
Signature
Signature Guaranteed: __________________________
NOTICE
------
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
B-vii
