LANDMARK BANCORP, INC.
and
LANDMARK NATIONAL BANK,
as Rights Agent
RIGHTS AGREEMENT
Dated as of October 3, 2001
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 6
Section 3. Issue of Right Certificates 6
Section 4. Form of Right Certificates 8
Section 5. Countersignature and Registration 8
Section 6. Transfer, Split Up, Combination and
Exchange of Right
Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates 9
Section 7. Exercise of Rights, Purchase Price;
Expiration Date of Rights 10
Section 8. Cancellation and Destruction of Right
Certificates 11
Section 9. Availability of Shares of Preferred
Stock 11
Section 10. Preferred Stock Record Date 12
Section 11. Adjustment of Purchase Price,
Number of Shares and Number of Rights 13
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares 21
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power 21
Section 14. Fractional Rights and Fractional
Shares 25
Section 15. Rights of Action 26
Section 16. Agreement of Right Holders 26
Section 17. Right Certificate Holder Not Deemed
a Stockholder 27
Section 18. Concerning the Rights Agent 27
Section 19. Merger or Consolidation or Change of
Name of Rights Agent 28
Section 20. Duties of Rights Agent 28
Section 21. Change of Rights Agent 31
Section 22. Issuance of New Right Certificates 32
Section 23. Redemption 32
Section 24. Exchange 33
Section 25. Notice of Certain Events 34
Section 26. Notices 35
Section 27. Supplements and Amendments 35
Section 28. Successors 36
Section 29. Benefits of this Agreement 36
Section 30. Determinations and Actions by the
Board of Directors 36
Section 31. Severability 36
Section 32. Governing Law 37
Section 33. Counterparts 37
Section 34. Descriptive Headings 37
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated
as of October 3, 2001 (this "Agreement"), is
between LANDMARK BANCORP, INC. a
Delaware corporation (the "Company"), and
LANDMARK NATIONAL BANK, a national
banking association, as Rights Agent (the "Rights
Agent").
The Board of Directors of the
Company has authorized and declared a dividend
of one preferred share purchase right (a "Right")
for each share of Common Stock (as hereinafter
defined) of the Company outstanding as of the
Close of Business (as defined below) on February
1, 2002 (the "Record Date"), each Right
representing the right to purchase one one-
thousandth (subject to adjustment) of a share of
Preferred Stock (as hereinafter defined), upon the
terms and subject to the conditions herein set forth,
and has further authorized and directed the
issuance of one Right (subject to adjustment as
provided herein) with respect to each share of
Common Stock that shall become outstanding
between the Record Date and the earlier of the
Distribution Date and the Expiration Date (as such
terms are hereinafter defined); provided, however,
that Rights may be issued with respect to shares of
Common Stock that shall become outstanding after
the Distribution Date and prior to the Expiration
Date in accordance with Section 22.
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 meaning indicated:
(a) "Acquiring Person" shall mean
any Person (as such term is hereinafter defined)
who or which shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more
of the shares of Common Stock then outstanding,
but shall not include an Exempt Person (as such
term is hereinafter defined); provided, however,
that (i) if the Board of Directors of the Company
determines in good faith that a Person who would
otherwise be an "Acquiring Person" became the
Beneficial Owner of a number of shares of
Common Stock such that the Person would
otherwise qualify as an "Acquiring Person"
inadvertently (including, without limitation,
because (A) such Person was unaware that it
beneficially owned a percentage of Common Stock
that would otherwise cause such Person to be an
"Acquiring Person" or (B) such Person was aware
of the extent of its Beneficial Ownership of
Common Stock but had no actual knowledge of the
consequences of such Beneficial Ownership under
this Agreement) and without any intention of
changing or influencing control of the Company,
then such Person shall not be deemed to be or to
have become an "Acquiring Person" for any
purposes of this Agreement unless and until such
Person shall have failed to divest itself, as soon as
practicable (as determined, in good faith, by the
Board of Directors of the Company), of Beneficial
Ownership of a sufficient number of shares of
Common Stock so that such Person would no
longer otherwise qualify as an "Acquiring
Person"; (ii) if, as of the date hereof or prior to
the first public announcement of the adoption of
this Agreement, any Person is or becomes the
Beneficial Owner of 15% or more of the shares of
Common Stock outstanding, such Person shall not
be deemed to be or to become an "Acquiring
Person" unless and until such time as such Person
shall, after the first public announcement of the
adoption of this Agreement, become the Beneficial
Owner of additional shares of Common Stock
(other than pursuant to a dividend or distribution
paid or made by the Company on the outstanding
Common Stock or pursuant to a split or
subdivision of the outstanding Common Stock),
unless, upon becoming the Beneficial Owner of
such additional shares of Common Stock, such
Person is not then the Beneficial Owner of 15% or
more of the shares of Common Stock then
outstanding; and (iii) no Person shall become an
"Acquiring Person" as the result of an acquisition
of shares of Common Stock by the Company
which, by reducing the number of shares
outstanding, increases the proportionate number of
shares of Common Stock beneficially owned by
such Person to 15% or more of the shares of
Common Stock then outstanding, provided,
however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding by reason of such
share acquisitions by the Company and shall
thereafter become the Beneficial Owner of any
additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made
by the Company on the outstanding Common
Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person
shall be deemed to be an "Acquiring Person"
unless upon becoming the Beneficial Owner of
such additional shares of Common Stock such
Person does not beneficially own 15% or more of
the shares of Common Stock then outstanding.
For all purposes of this Agreement, any calculation
of the number of shares of Common Stock
outstanding at any particular time, including for
purposes of determining the particular percentage
of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and
Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as in
effect on the date hereof.
(b) "Affiliate" and "Associate"
shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect
on the date hereof.
(c) A Person shall be deemed the
"Beneficial Owner" of, shall be deemed to have
"Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or
any of such Person's Affiliates or Associates is
deemed to beneficially own, directly or indirectly,
within the meaning of Rule l3d-3 of the General
Rules and Regulations under the Exchange Act as
in effect on the date hereof;
(ii) which such Person or
any of such Person's Affiliates or Associates has
(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 (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,
warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, (x)
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, (y) securities which such
Person has a right to acquire upon the exercise of
Rights at any time prior to the time that any
Person becomes an Acquiring Person or (z)
securities issuable upon the exercise of Rights from
and after the time that any Person becomes an
Acquiring Person if such Rights were acquired by
such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof
("Original Rights") or pursuant to Section 11(i) or
Section 11(n) with respect to an adjustment to
Original Rights; or (B) the right to vote pursuant
to any agreement, arrangement or understanding;
provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially
own, any security by reason of such agreement,
arrangement or understanding if the agreement,
arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in
accordance with, the applicable rules and
regulations promulgated under the Exchange Act
and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially
owned, directly or indirectly, by any other Person
and with respect to which such Person or any of
such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other
than customary agreements with and between
underwriters and selling group members with
respect to a bona fide public offering of securities)
for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso
to Section 1(c)(ii)(B)) or disposing of such
securities of the Company;
provided, however, that no Person who is an
officer, director or employee of an Exempt Person
shall be deemed, solely by reason of such Person's
status or authority as such, to be the "Beneficial
Owner" of, to have "Beneficial Ownership" of or
to "beneficially own" any securities that are
"beneficially owned" (as defined in this
Section l(c)), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any
other such officer, director or employee of an
Exempt Person.
(d) "Business Day" shall mean any
day other than a Saturday, a Sunday or a day on
which state or national banking institutions in the
State in which the principal office of the Rights
Agent is located are authorized or obligated by law
or executive order to close.
(e) "Close of Business" on any
given date shall mean 5:00 P.M., Manhattan,
Kansas, time, on such date; provided, however,
that if such date is not a Business Day it shall
mean 5:00 P.M., Manhattan, Kansas, time, on the
next succeeding Business Day.
(f) "Common Stock" when used
with reference to the Company shall mean the
Common Stock, presently par value $0.01 per
share, of the Company. "Common Stock" when
used with reference to any Person other than the
Company shall mean the common stock (or, in the
case of an unincorporated entity, the equivalent
equity interest) with the greatest voting power of
such other Person or, if such other Person is a
Subsidiary of another Person, the Person or
Persons which ultimately control such first-
mentioned Person.
(g) "Common Stock Equivalents"
shall have the meaning set forth in
Section 11(a)(iii) hereof.
(h) "Current Value" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(i) "Distribution Date" shall have
the meaning set forth in Section 3 hereof.
(j) "Equivalent Preferred Shares"
shall have the meaning set forth in Section 11(b)
hereof.
(k) "Exempt Person" shall mean
the Company or any Subsidiary (as such term is
hereinafter defined) of the Company, in each case
including, without limitation, in its fiduciary
capacity, or any employee benefit plan of the
Company or of any Subsidiary of the Company, or
any entity or trustee holding Common Stock 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 Company
or of any Subsidiary of the Company.
(l) "Exchange Ratio" shall have
the meaning set forth in Section 24 hereof.
(m) "Expiration Date" shall have
the meaning set forth in Section 7 hereof.
(n) "Final Expiration Date" shall
have the meaning set forth in Section 7 hereof.
(o) "Flip-In Event" shall have the
meaning set forth in Section 11(a)(ii) hereof.
(p) "Nasdaq" shall mean The
Nasdaq Stock Market.
(q) "New York Stock Exchange"
shall mean the New York Stock Exchange, Inc.
(r) "Person" shall mean any
individual, firm, corporation, partnership, limited
liability company, trust or other entity, and shall
include any successor (by merger or otherwise) to
such entity.
(s) "Preferred Stock" shall mean
the Series A Junior Participating Preferred Stock,
par value $0.01 per share, of the Company having
the rights and preferences set forth in the Form of
Certificate of Designation attached to this
Agreement as Exhibit A.
(t) "Principal Party" shall have the
meaning set forth in Section 13(b) hereof.
(u) "Purchase Price" shall have the
meaning set forth in Section 7(b) hereof.
(v) "Redemption Date" shall have
the meaning set forth in Section 7 hereof.
(w) "Redemption Price" shall have
the meaning set forth in Section 23 hereof.
(x) "Right Certificate" shall have
the meaning set forth in Section 3 hereof.
(y) "Securities Act" shall mean the
Securities Act of 1933, as amended.
(z) "Section 11(a)(ii) Trigger
Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(aa) "Spread" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(bb) "Stock Acquisition Date" shall
mean the first date of public announcement
(which, for purposes of this definition, shall
include, without limitation, a report filed pursuant
to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an
Acquiring Person has become such, or such earlier
date as a majority of the Board of Directors shall
become aware of the existence of an Acquiring
Person.
(cc) "Subsidiary" of any Person
shall mean any corporation or other entity 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.
(dd) "Substitution Period" shall have
the meaning set forth in Section 11(a)(iii) hereof.
(ee) "Summary of Rights" shall
have the meaning set forth in Section 3 hereof.
(ff) "Trading Day" shall have the
meaning set forth in Section 11(d)(i) hereof.
(gg) "corporation" shall mean, solely
in connection with the appointment of any successor
Rights Agent pursuant to Section 21 of this
Agreement, a corporation or a bank organized and
doing business under the laws of the United States
or the laws of any state of the United States or the
District of Columbia.
Section 2. Appointment of Rights
Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution
Date be the holders of Common Stock) in
accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such
appointment. The Company may from time to
time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right
Certificates.
(a) Until the Close of Business on
the earlier of (i) the tenth day after the Stock
Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by action of
the Board of Directors prior to such time as any
Person becomes an Acquiring Person) after the
date of the commencement by any Person (other
than an Exempt Person) of, or of the first public
announcement of the intention of such Person
(other than an Exempt Person) to commence, a
tender or exchange offer the consummation of
which would result in any Person (other than an
Exempt Person) becoming the Beneficial Owner of
shares of Common Stock aggregating 15% or more
of the Common Stock then outstanding (the earlier
of such dates being herein referred to as the
"Distribution Date", provided, however, that if
either of such dates occurs after the date of this
Agreement and on or prior to the Record Date,
then the Distribution Date shall be the Record
Date), (x) the Rights will be evidenced (subject to
the provisions of Section 3(b) hereof) by the
certificates for Common Stock registered in the
names of the holders thereof and not by separate
Right Certificates, and (y) the Rights will be
transferable only in connection with the transfer of
Common Stock. As soon as practicable after the
Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign and the
Company will send or cause to be sent (and the
Rights Agent will, if requested and at the expense
of the Company send) by first-class, insured,
postage-prepaid mail, to each record holder of
Common Stock as of the close of business on the
Distribution Date (other than any Acquiring Person
or any Associate or Affiliate of an Acquiring
Person), at the address of such holder shown on
the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right (subject
to adjustment as provided herein) for each share of
Common Stock so held. As of the Distribution
Date, the Rights will be evidenced solely by such
Right Certificates.
(b) On the Record Date, or as soon
as practicable thereafter, the Company will send a
copy of a Summary of Rights to Purchase Shares
of Preferred Stock, in substantially the form of
Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record
holder of Common Stock as of the Close of
Business on the Record Date (other than any
Acquiring Person or any Associate or Affiliate of
any Acquiring Person), at the address of such
holder shown on the records of the Company.
With respect to certificates for Common Stock
outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by
such certificates registered in the names of the
holders thereof together with the Summary of
Rights. Until the Distribution Date (or, if earlier,
the Expiration Date), the surrender for transfer of
any certificate for Common Stock outstanding on
the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the
transfer of the Rights associated with the Common
Stock represented thereby.
(c) Rights shall be issued in respect
of all shares of Common Stock issued or disposed
of (including, without limitation, upon disposition
of Common Stock out of treasury stock or issuance
or reissuance of Common Stock out of authorized
but unissued shares) after the Record Date but
prior to the earlier of the Distribution Date and the
Expiration Date, or in certain circumstances
provided in Section 22 hereof, after the
Distribution Date. Certificates issued for Common
Stock (including, without limitation, upon transfer
of outstanding Common Stock, disposition of
Common Stock out of treasury stock or issuance or
reissuance of Common Stock out of authorized but
unissued shares) after the Record Date but prior to
the earlier of the Distribution Date and the
Expiration Date, or in certain circumstances
provided in Section 22 hereof, after the
Distribution Date 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
Landmark Bancorp, Inc.
(the "Company") and
Landmark National Bank,
as Rights Agent, dated as
of October 3, 2001, and as
amended from time to time
(the "Rights Agreement"),
the terms of which are
hereby incorporated herein
by reference and a copy of
which is on file at the
principal executive offices
of the Company. Under
certain circumstances, as
set forth in the Rights
Agreement, such Rights
will be evidenced by
separate certificates and
will no longer be evidenced
by this certificate. The
Company will mail to the
holder of this certificate a
copy of the Rights
Agreement without charge
after receipt of a written
request therefor. Under
certain circumstances, as
set forth in the Rights
Agreement, Rights owned
by or transferred to any
Person who is or becomes
an Acquiring Person (as
defined in the Rights
Agreement) and certain
transferees thereof will
become null and void and
will no longer be
transferable.
With respect to such certificates containing the
foregoing legend, until the Distribution Date the
Rights associated with the Common Stock
represented by such certificates shall be evidenced
by such certificates alone, and the surrender for
transfer of any such certificate, except as otherwise
provided herein, shall also constitute the transfer
of the Rights associated with the Common Stock
represented thereby. In the event that the
Company purchases or otherwise acquires any
Common Stock after the Record Date but prior to
the Distribution Date, any Rights associated with
such Common Stock shall be deemed canceled and
retired so that the Company shall not be entitled to
exercise any Rights associated with the Common
Stock 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. The Right Certificates (and the
forms of election to purchase shares and of
assignment to be printed on the reverse thereof)
shall be substantially in the form set forth in
Exhibit B hereto and may have such marks of
identification or designation and such legends,
summaries or endorsements printed thereon as the
Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement,
or as may be required to comply with any
applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of
any stock exchange or interdealer quotation system
on which the Rights may from time to time be
listed or quoted, or to conform to usage. Subject
to the provisions of this Agreement, the Right
Certificates shall entitle the holders thereof to
purchase such number of one one-thousandths of a
share of Preferred Stock as shall be set forth
therein at the Purchase Price, but the number of
such one one-thousandths of a share of Preferred
Stock and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. Countersignature and
Registration.
(a) The Right Certificates shall be
executed on behalf of the Company by the
President of the Company, either manually or by
facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof and shall be
attested by the Secretary of the Company, either
manually or by facsimile signature. The Right
Certificates shall be countersigned either manually
or by facsimile signature by the Rights Agent and
shall not be valid for any purpose unless
countersigned. In case any officer of the Company
who shall have signed any of the Right Certificates
shall cease to be such officer of the Company
before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by
the Company with the same force and effect as
though the Person who signed such Right
Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed
on behalf of the Company by any Person who, at
the actual date of the execution of such Right
Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although
at the date of the execution of this Agreement any
such Person was not such an officer.
(b) Following the Distribution
Date, the Rights Agent will keep or cause to be
kept, at an office or agency designated for such
purpose, books for registration and transfer of the
Right Certificates issued hereunder. Such books
shall show the names and addresses of the
respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of
the Right Certificates and the date of each of the
Right Certificates.
Section 6. Transfer, Split Up,
Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates.
(a) Subject to the provisions of this
Agreement, at any time after the Distribution Date
and prior to the Expiration Date, any Right
Certificate or Right Certificates may be
transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like
number of one one-thousandths of a share of
Preferred Stock as the Right Certificate or Right
Certificates surrendered then entitled such holder
to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined
or exchanged at the office or agency of the Rights
Agent designated for such purpose. Thereupon the
Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested.
The Company may require payment of a sum
sufficient to cover any tax or governmental charge
that may be imposed in connection with any
transfer, split up, combination or exchange of
Right Certificates.
(b) Subject to the provisions of this
Agreement, at any time after the Distribution Date
and prior to the Expiration Date, upon receipt by
the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to
them, and, at the Company's request,
reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights
Agent for delivery to the registered holder in lieu
of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights,
Purchase Price; Expiration Date of Rights.
(a) Except as otherwise provided
herein, the Rights shall become exercisable on the
Distribution Date, and thereafter the registered
holder of any Right Certificate may, subject to
Section 11(a)(ii) hereof and except as otherwise
provided herein, exercise the Rights evidenced
thereby in whole or in part upon surrender of the
Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed,
to the Rights Agent at the office or agency of the
Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price with
respect to the total number of one one-thousandths
of a share of Preferred Stock (or other securities,
cash or other assets, as the case may be) as to
which the Rights are exercised, at any time which
is both after the Distribution Date and prior to the
time (the "Expiration Date") that is the earliest of
(i) the Close of Business on October 3, 2011 (the
"Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23
hereof (the "Redemption Date") or (iii) the time at
which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price shall be
initially $60.00 for each one one-thousandth of a
share of Preferred Stock purchasable upon the
exercise of a Right. The Purchase Price and the
number of one one-thousandths of a share of
Preferred Stock or other securities or property to
be acquired upon exercise of a Right 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) of this
Section 7.
(c) Except as otherwise provided
herein, upon receipt of a Right Certificate
representing exercisable Rights, with the form of
election to purchase duly executed, accompanied
by payment of the aggregate Purchase Price for the
shares of Preferred Stock to be purchased and an
amount equal to any applicable transfer tax
required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in
cash or by certified check, cashier's check or
money order payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred
Stock, or make available if the Rights Agent is the
transfer agent for the Preferred Stock, certificates
for the number of shares of Preferred Stock to be
purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all
such requests, or (B) requisition from a depositary
agent appointed by the Company depositary
receipts representing interests in such number of
one one-thousandths of a share of Preferred Stock
as are to be purchased (in which case certificates
for the Preferred Stock represented by such
receipts shall be deposited by the transfer agent
with the depositary agent), and the Company
hereby directs any such depositary agent to comply
with such request, (ii) when appropriate,
requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (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, promptly deliver such
cash to or upon the order of the registered holder
of such Right Certificate.
(d) Except as otherwise provided
herein, in case the registered holder of any Right
Certificate shall exercise less than all of the Rights
evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the exercisable
Rights remaining unexercised shall be issued by
the Rights Agent to the registered holder of such
Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in
this Agreement to the contrary, neither the Rights
Agent nor the Company shall be obligated to
undertake any action with respect to a registered
holder of Rights upon the occurrence of any
purported transfer or exercise of Rights pursuant to
Section 6 hereof or this Section 7 unless such
registered holder shall have (i) completed and
signed the certificate contained in the form of
assignment or form of election to purchase set
forth on the reverse side of the Rights Certificate
surrendered for such transfer or exercise and (ii)
provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner)
thereof as the Company shall reasonably request.
Section 8. Cancellation and
Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of
exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or
to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled
by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by any
of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent
shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The
Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the
written request of the Company, destroy such
canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the
Company.
Section 9. Availability of Shares of
Preferred Stock.
(a) The Company covenants and
agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares
of Preferred Stock or any shares of Preferred
Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of
Preferred Stock issuable upon the exercise of
Rights may be listed or admitted to trading on any
national securities exchange, or quoted on Nasdaq,
the Company shall use its best efforts to cause,
from and after such time as the Rights become
exercisable, all shares reserved for such issuance
to be listed or admitted to trading on such
exchange, or quoted on Nasdaq, upon official
notice of issuance upon such exercise.
(c) From and after such time as the
Rights become exercisable, the Company shall use
its best efforts, if then necessary to permit the
issuance of shares of Preferred Stock upon the
exercise of Rights, to register and qualify such
shares of Preferred Stock under the Securities Act
and any applicable state securities or "Blue Sky"
laws (to the extent exemptions therefrom are not
available), cause such registration statement and
qualifications to become effective as soon as
possible after such filing and keep such registration
and qualifications effective until the earlier of the
date as of which the Rights are no longer
exercisable for such securities and the Expiration
Date. The Company may temporarily suspend, for
a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and
file a registration statement under the Securities
Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public
announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as
a public announcement at such time as the
suspension is no longer in effect. Notwithstanding
any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in
such jurisdiction shall have been obtained and until
a registration statement under the Securities Act
shall have been declared effective, unless an
exemption therefrom is available.
(d) The Company covenants and
agrees that it will take all such action as may be
necessary to ensure that all shares of Preferred
Stock delivered upon exercise of Rights shall, at
the time of delivery of the certificates therefor
(subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid
and nonassessable shares.
(e) The Company further covenants
and agrees that it will pay when due and payable
any and all federal and state transfer taxes and
charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of
any shares of Preferred Stock upon the exercise of
Rights. The Company shall not, however, be
required to pay any transfer tax which may be
payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary
receipts for the Preferred Stock 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 or
depositary receipts for Preferred Stock upon the
exercise of any Rights until any such tax shall have
been paid (any such tax being payable by that
holder of such Right Certificate at the time of
surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax
is due.
Section 10. Preferred Stock Record
Date. Each Person in whose name any certificate
for Preferred Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have
become the holder of record of the shares of
Preferred Stock 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 Stock transfer books of the Company are
closed, such Person shall be deemed to have
become the record holder of such shares on, and
such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock
transfer books of the Company 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 holder of Preferred Stock for which
the Rights shall be exercisable, including, without
limitation, the right to vote or to receive dividends
or other distributions, and shall not be entitled to
receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase
Price, Number and Kind of Shares and Number
of Rights. The Purchase Price, the number of
shares of Preferred Stock or other securities or
property purchasable upon exercise of each Right
and the number of Rights outstanding are subject
to adjustment from time to time as provided in this
Section 11.
(a)(i) In the event the Company shall
at any time after the date of this Agreement (A)
declare and pay a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide
the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number
of shares of Preferred Stock or (D) issue any
shares of its capital stock in a reclassification of
the Preferred Stock (including any such
reclassification in connection with a consolidation
or merger in which the Company is the continuing
or surviving corporation), except as otherwise
provided in this Section 11(a), the number and
kind of shares of capital stock issuable upon
exercise of a Right as of the record date for such
dividend or the effective date of such subdivision,
combination or reclassification 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 Stock transfer books of
the Company were open, the holder would have
owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision,
combination or reclassification.
(ii) Subject to Section 24 of this
Agreement, in the event any Person becomes an
Acquiring Person (the first occurrence of such
event being referred to hereinafter as the "Flip-In
Event"), then (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect
immediately prior to the Flip-In Event multiplied
by the number of one one-thousandths of a share
of Preferred Stock for which a Right was
exercisable immediately prior to such Flip-In
Event, whether or not such Right was then
exercisable, and (B) each holder of a Right, except
as otherwise provided in this Section 11(a)(ii) and
Section 11(a)(iii) hereof, shall thereafter have the
right to receive, upon exercise thereof at a price
equal to the Purchase Price (as so adjusted), in
accordance with the terms of this Agreement and
in lieu of shares of Preferred Stock, such number
of shares of Common Stock as shall equal the
result obtained by dividing the Purchase Price (as
so adjusted) by 50% of the current per share
market price of the Common Stock (determined
pursuant to Section 11(d) hereof) on the date of
such Flip-In Event; provided, however, that the
Purchase Price (as so adjusted) and the number of
shares of Common Stock so receivable upon
exercise of a Right shall, following the Flip-In
Event, be subject to further adjustment as
appropriate in accordance with Section 11(f)
hereof. Notwithstanding anything in this
Agreement to the contrary, however, from and
after the Flip-In Event, any Rights that are
beneficially owned by (x) any Acquiring Person
(or any Affiliate or Associate of any Acquiring
Person), (y) a transferee of any Acquiring Person
(or any such Affiliate or Associate) who becomes a
transferee after the Flip-In Event or (z) a
transferee of any Acquiring Person (or any such
Affiliate or Associate) who became a transferee
prior to or concurrently with the Flip-In Event
pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any
Person with whom it has any continuing
agreement, arrangement or understanding
regarding the transferred Rights or (II) a transfer
which the Board of Directors has determined is
part of a plan, arrangement or understanding
which has the purpose or effect of avoiding the
provisions of this paragraph, and subsequent
transferees of such Persons, shall be void without
any further action and any holder of such Rights
shall thereafter have no rights whatsoever with
respect to such Rights under any provision of this
Agreement. The Company shall use all reasonable
efforts to ensure that the provisions of this
Section 11(a)(ii) are complied with, but shall have
no liability to any holder of Right Certificates or
other Person as a result of its failure to make any
determinations with respect to an Acquiring Person
or its Affiliates, Associates or transferees
hereunder. From and after the Flip-In Event, 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 canceled. From and after the occurrence of an
event specified in Section 13(a) hereof, any Rights
that theretofore have not been exercised pursuant
to this Section 11(a)(ii) shall thereafter be
exercisable only in accordance with Section 13 and
not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option
substitute for a share of Common Stock issuable
upon the exercise of Rights in accordance with the
foregoing subparagraph (ii) a number of shares of
Preferred Stock or fraction thereof such that the
current per share market price of one share of
Preferred Stock multiplied by such number or
fraction is equal to the current per share market
price of one share of Common Stock. In the event
that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but
unissued to permit the exercise in full of the Rights
in accordance with the foregoing subparagraph (ii),
the Board of Directors shall with respect to such
deficiency, to the extent permitted by applicable
law and any material agreements then in effect to
which the Company is a party (A) determine the
excess (such excess, the "Spread") of (1) the value
of the shares of Common Stock issuable upon the
exercise of a Right in accordance with the
foregoing subparagraph (ii) (the "Current Value")
over (2) the Purchase Price (as adjusted in
accordance with the foregoing subparagraph (ii)),
and (B) with respect to each Right (other than
Rights which have become void pursuant to the
foregoing subparagraph (ii)), make adequate
provision to substitute for the shares of Common
Stock issuable in accordance with the foregoing
subparagraph (ii) upon exercise of the Right and
payment of the Purchase Price (as adjusted in
accordance therewith), (1) cash, (2) a reduction in
such Purchase Price, (3) shares of Preferred Stock
or other equity securities of the Company
(including, without limitation, shares or fractions
of shares of preferred stock which, by virtue of
having dividend, voting and liquidation rights
substantially comparable to those of the shares of
Common Stock, are deemed in good faith by the
Board of Directors to have substantially the same
value as the shares of Common Stock (such shares
of Preferred Stock and shares or fractions of shares
of preferred stock are hereinafter referred to as
"Common Stock Equivalents")), (4) debt securities
of the Company, (5) other assets, or (6) any
combination of the foregoing, having a value
which, when added to the value of the shares of
Common Stock issued upon exercise of such
Right, shall have an aggregate value equal to the
Current Value (less the amount of any reduction in
such Purchase Price), where such aggregate value
has been determined by the Board of Directors
upon the advice of a nationally recognized
investment banking firm selected in good faith by
the Board of Directors; provided, however, that if
the Company shall not make adequate provision to
deliver value pursuant to clause (B) above within
thirty (30) days following the Flip-In Event (the
date of the Flip-In Event being the
"Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, to the
extent permitted by applicable law and any
material agreements then in effect to which the
Company is a party, upon the surrender for
exercise of a Right and without requiring payment
of such Purchase Price, shares of Common Stock
(to the extent available), and then, if necessary,
such number or fractions of shares of Preferred
Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If, upon the
occurrence of the Flip-In Event, the Board of
Directors shall determine in good faith that it is
likely that sufficient additional shares of Common
Stock could be authorized for issuance upon
exercise in full of the Rights, then, if the Board of
Directors so elects, the thirty (30) day period set
forth above may be extended to the extent
necessary, but not more than ninety (90) days after
the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the
authorization of such additional shares (such thirty
(30) day period, as it may be extended, is herein
called the "Substitution Period"). To the extent
that the Company determines that some action
need be taken pursuant to the second and/or third
sentence of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 11(a)(ii)
hereof and the last sentence of this
Section 11(a)(iii) 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 Company shall issue a public
announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as
a public announcement at such time as the
suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of the shares of
Common Stock shall be the current per share
market price (as determined pursuant to
Section 11(d)(i)) on the Section 11(a)(ii) Trigger
Date and the per share or fractional value of any
"Common Stock Equivalent" shall be deemed to
equal the current per share market price of the
Common Stock. The Board of Directors of the
Company may, but shall not be required to,
establish procedures to allocate the right to receive
shares of Common Stock upon the exercise of the
Rights among holders of Rights pursuant to this
Section 11(a)(iii).
(b) In case the Company shall fix a
record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar
days after such record date) to subscribe for or
purchase Preferred Stock (or shares having the
same rights, privileges and preferences as the
Preferred Stock ("Equivalent Preferred Shares"))
or securities convertible into Preferred Stock or
Equivalent Preferred Shares at a price per share of
Preferred Stock or Equivalent Preferred Shares (or
having a conversion price per share, if a security
convertible into shares of Preferred Stock or
Equivalent Preferred Shares) less than the then
current per share market price of the Preferred
Stock (determined pursuant to Section 11(d)
hereof) on such record date, the Purchase Price to
be in effect after such record date shall be
determined by multiplying the Purchase Price in
effect immediately prior to such record date by a
fraction, the numerator of which shall be the
number of shares of Preferred Stock and
Equivalent Preferred Shares outstanding on such
record date plus the number of shares of Preferred
Stock and Equivalent Preferred Shares which the
aggregate offering price of the total number of
shares of Preferred Stock 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
shares of Preferred Stock and Equivalent Preferred
Shares outstanding on such record date plus the
number of additional shares of Preferred Stock
and/or 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 Company
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 Company, whose determination shall be
described in a statement filed with the Rights
Agent. Shares of Preferred Stock and Equivalent
Preferred Shares owned by or held for the account
of the Company shall not be deemed outstanding
for the purpose of any such computation. Such
adjustment shall be made successively whenever
such a record date is fixed; and in the event that
such rights, options or warrants are not so issued,
the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In case the Company shall fix a
record date for the making of a distribution to all
holders of the Preferred Stock (including any such
distribution made in connection with a
consolidation or merger in which the Company is
the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a
regular quarterly cash dividend or a dividend
payable in Preferred Stock) or subscription rights
or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by
multiplying the Purchase Price in effect
immediately prior to such record date by a
fraction, the numerator of which shall be the then
current per share market price of the Preferred
Stock (determined pursuant to Section 11(d)
hereof) on such record date, less the fair market
value (as determined in good faith by the Board of
Directors of the Company whose determination
shall be described in a statement filed with the
Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to
one share of Preferred Stock, and the denominator
of which shall be such current per share market
price (determined pursuant to Section 11(d) hereof)
of the Preferred Stock; 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
Company 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) Except as otherwise provided
herein, for the purpose of any computation
hereunder, the "current per share market price" of
any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be
the average of the daily closing prices per share of
such Security 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
Security is determined during a period following
the announcement by the issuer of such Security of
(A) a dividend or distribution on such Security
payable in shares of such Security or securities
convertible into such shares, or (B) any
subdivision, combination or reclassification of
such Security, and prior to the expiration of 30
Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for
such subdivision, combination or reclassification,
then, and in each such case, the current per share
market price shall be appropriately adjusted to
reflect the current market price per share
equivalent of such Security. The closing price for
each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day,
the average of the closing bid and asked prices,
regular way, in either case as reported by the
principal consolidated transaction reporting system
with respect to securities listed or admitted to
trading on the American or the New York Stock
Exchange or, if the Security is not listed or
admitted to trading on the American or 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 Security is listed
or admitted to trading or, if the Security is not
listed or admitted to trading on any national
securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in
use, or, if on any such date the Security is 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
Security selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a
day on which the principal national securities
exchange on which the Security is listed or
admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted
to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any
computation hereunder, if the Preferred Stock is
publicly traded, the "current per share market
price" of the Preferred Stock shall be determined
in accordance with the method set forth in
Section 11(d)(i). If the Preferred Stock is not
publicly traded but the Common Stock is publicly
traded, the "current per share market price" of the
Preferred Stock shall be conclusively deemed to be
the current per share market price of the Common
Stock as determined pursuant to Section 11(d)(i)
multiplied by the then applicable Adjustment
Number (as defined in and determined in
accordance with the Certificate of Designation for
the Preferred Stock). If neither the Common
Stock nor the Preferred Stock is publicly 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 Company, whose
determination shall be described in a statement
filed with the Rights Agent.
(e) No adjustment in the Purchase
Price shall be required unless such adjustment
would require an increase or decrease of at least
1% in the Purchase Price; provided, however, that
any adjustments which by reason of this
Section 11(e) are not required to be made shall be
carried forward and taken into account in any
subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to
the nearest one one-thousandth of a share of
Preferred Stock or one-hundredth of a share of
Common Stock or other share or security 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(a) hereof, the holder
of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the
Company other than the Preferred Stock,
thereafter the Purchase Price and the number of
such other shares so receivable upon exercise of a
Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), 11(b),
11(c), 11(e), 11(h), 11(i) and 11(m) hereof, as
applicable, and the provisions of Sections 7, 9, 10,
13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by
the Company subsequent to any adjustment made
to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price,
the number of one one-thousandths of a share of
Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have
exercised its election as provided in Section 11(i),
upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b)
and 11(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 share of Preferred Stock
(calculated to the nearest one one-thousandth of a
share of Preferred Stock) obtained by (i)
multiplying (x) the number of one one-thousandths
of a share purchasable upon the exercise of a Right
immediately prior to such adjustment by (y) the
Purchase Price in effect immediately prior to such
adjustment and (ii) dividing the product so
obtained by the Purchase Price in effect
immediately after such adjustment.
(i) The Company may elect on or
after the date of any adjustment of the Purchase
Price pursuant to Sections 11(b) or 11(c) hereof to
adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths
of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one
one-thousandths of a share of Preferred Stock for
which a Right was exercisable immediately prior
to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to
the nearest one-hundredth) obtained by dividing
the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public
announcement of its election to adjust the number
of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount
of the adjustment to be made. Such record date
may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10
days later than the date of the public
announcement. If Right Certificates have been
issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company
may, 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 Company, shall cause to be
distributed to such holders of record in substitution
and replacement for the Right Certificates held by
such holders prior to the date of adjustment, and
upon surrender thereof, if required by the
Company, new Right Certificates evidencing all
the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be
distributed shall be issued, executed and
countersigned in the manner provided for herein
and shall be registered in the names of the holders
of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment
or change in the Purchase Price or the number of
one one-thousandths of a share of Preferred Stock
issuable upon the exercise of a Right, the Right
Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the
number of one one-thousandths of a share of
Preferred Stock 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
fraction of Preferred Stock or other shares of
capital stock issuable upon exercise of a Right, the
Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally
issue fully paid and nonassessable shares of
Preferred Stock or other such 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 Company may elect
to defer until the occurrence of such event issuing
to the holder of any Right exercised after such
record date the Preferred Stock and other capital
stock or securities of the Company, if any,
issuable upon such exercise over and above the
Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing
such holder's right to receive such additional
shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to
the contrary notwithstanding, the Company shall
be entitled to make such adjustments 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 Stock, issuance
wholly for cash of any shares of Preferred Stock at
less than the current market price, issuance wholly
for cash of Preferred Stock or securities which by
their terms are convertible into or exchangeable for
Preferred Stock, dividends on Preferred Stock
payable in shares of Preferred Stock or issuance of
rights, options or warrants referred to hereinabove
in Section 11(b), hereafter made by the Company
to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) Anything in this Agreement to
the contrary notwithstanding, in the event that at
any time after the date of this Agreement and prior
to the Distribution Date, the Company shall (i)
declare and pay any dividend on the Common
Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the
Common Stock (by reclassification or otherwise
than by payment of a dividend payable in Common
Stock) into a greater or lesser number of shares of
Common Stock, then, in each such case, the
number of Rights associated with each share of
Common Stock then outstanding, or issued or
delivered thereafter, shall be proportionately
adjusted so that the number of Rights thereafter
associated with each share of Common Stock
following any such event shall equal the result
obtained by multiplying the number of Rights
associated with each share of Common Stock
immediately prior to such event by a fraction the
numerator of which shall be the total number of
shares of Common Stock outstanding immediately
prior to the occurrence of the event and the
denominator of which shall be the total number of
shares of Common Stock outstanding immediately
following the occurrence of such event.
(o) The Company agrees that, after
the earlier of the Distribution Date or the Stock
Acquisition Date, it will not, except as permitted
by Sections 23, 24 or 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
eliminate the benefits intended to be afforded by
the Rights.
Section 12. Certificate of Adjusted
Purchase Price or Number of Shares. Whenever
an adjustment is made as provided in Section 11 or
13 hereof, the Company shall promptly (a) prepare
a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with
each transfer agent for the Common Stock and the
Preferred Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a
Right Certificate in accordance with Section 25
hereof (if so required under Section 25 hereof).
The Rights Agent shall be fully protected in
relying on any such certificate and on any
adjustment therein contained and shall not be
deemed to have knowledge of any such adjustment
unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger
or Sale or Transfer of Assets or Earning Power.
(a) In the event, directly or
indirectly, at any time after the Flip-In Event
(i) the Company shall consolidate with or shall
merge into any other Person, (ii) any Person shall
merge with and into the Company and the
Company shall be the continuing or surviving
corporation of such merger and, in connection
with such merger, all or part of the Common
Stock shall be changed into or exchanged for stock
or other securities of any other Person (or of the
Company) or cash or any other property, or (iii)
the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more
of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other
Person (other than the Company or one or more
wholly-owned Subsidiaries of the Company), then
upon the first occurrence of such event, proper
provision shall be made so that: (A) each holder of
a Right (other than Rights which have become void
pursuant to Section 11(a)(ii) hereof) shall
thereafter have the right to receive, upon the
exercise thereof at the Purchase Price (as
theretofore adjusted in accordance with
Section 11(a)(ii) hereof), in accordance with the
terms of this Agreement and in lieu of shares of
Preferred Stock or Common Stock of the
Company, such number of validly authorized and
issued, fully paid, non-assessable and freely
tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall equal the
result obtained by dividing the Purchase Price (as
theretofore adjusted in accordance with
Section 11(a)(ii) hereof) by 50% of the current per
share market price of the Common Stock of such
Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation
of such consolidation, merger, sale or transfer;
provided, however, that the Purchase Price (as
theretofore adjusted in accordance with
Section 11(a)(ii) hereof) and the number of shares
of Common Stock of such Principal Party so
receivable upon exercise of a Right shall be subject
to further adjustment as appropriate in accordance
with Section 11(f) hereof to reflect any events
occurring in respect of the Common Stock of such
Principal Party after the occurrence of such
consolidation, merger, sale or transfer; (B) 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 Company pursuant to this Agreement;
(C) the term "Company" shall thereafter be
deemed to refer to such Principal Party; and (D)
such Principal Party shall take such steps
(including, but not limited to, the reservation of a
sufficient number of its shares of Common Stock
in accordance with Section 9 hereof) in connection
with such consummation of any such transaction as
may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its
Common Stock 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 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.
(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
shares of Common Stock are converted in such
merger or consolidation, or, if there is more than
one such issuer, the issuer the shares of Common
Stock of which have 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 Company 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 of
Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or
earning power transferred pursuant to such
transaction or transactions, or, if each 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
is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding;
provided, however, that in any such case described
in the foregoing clause (b)(i) or (b)(ii), if the
Common Stock of such Person is not at such time
or has not been continuously over the preceding
12-month period registered under Section 12 of the
Exchange Act, then (1) if such Person is a direct
or indirect Subsidiary of another Person the
Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to
such other Person, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one
Person, the Common Stock of all of which is and
has been so registered, the term "Principal Party"
shall refer to whichever of such Persons is the
issuer of Common Stock having the greatest
aggregate market value of shares outstanding, 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 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 Company shall not
consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) hereof unless
prior thereto the Company and the Principal Party
involved therein shall have executed and delivered
to the Rights Agent an agreement confirming that
the requirements of Sections 13(a) and (b) hereof
shall promptly be performed in accordance with
their terms 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 Sections 13(a) and
(b) hereof and providing that, as soon as
practicable after executing such agreement
pursuant to this Section 13, the Principal Party
will:
(i) prepare and file a
registration statement under the Securities Act, if
necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights
on an appropriate form, use its best efforts to
cause such registration statement to become
effective as soon as practicable after such filing
and use its best efforts to cause such registration
statement to remain effective (with a prospectus at
all times meeting the requirements of the Securities
Act) until the Expiration Date and similarly
comply with applicable state securities laws;
(ii) use its best efforts, if the
Common Stock of the Principal Party shall be
listed or admitted to trading on the American or
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
American or New York Stock Exchange or such
other national securities exchange, or, if the
Common Stock of the Principal Party shall not be
listed or admitted to trading on the American or
New York Stock Exchange or other national
securities exchange, to cause the Rights and the
securities receivable upon exercise of the Rights to
be authorized for quotation on Nasdaq or on 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 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 or Common Stock Equivalents of
such Principal Party 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 or Common Stock Equivalents 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 Company
hereby agrees with each holder of Rights that it
shall not consummate any such transaction unless
prior thereto the Company and such Principal
Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing
that the provision in question of such Principal
Party shall have been canceled, waived or
amended, or that the authorized securities shall be
redeemed, so that the applicable provision will
have no effect in connection with, or as a
consequence of, the consummation of the proposed
transaction.
(e) The Company covenants and
agrees that it shall not, at any time after the Flip-In
Event, enter into any transaction of the type
described in clauses (i) through (iii) of
Section 13(a) hereof if (i) at the time of or
immediately after such consolidation, merger, sale,
transfer or other transaction 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,
(ii) prior to, simultaneously with or immediately
after such consolidation, merger, sale, transfer or
other transaction, the stockholders of the Person
who constitutes, or would constitute, the Principal
Party for purposes of Section 13(b) hereof shall
have received a distribution of Rights previously
owned by such Person or any of its Affiliates or
Associates or (iii) the form or nature of
organization of the Principal Party would preclude
or limit the exercisability of the Rights.
Section 14. Fractional Rights and
Fractional Shares.
(a) The Company shall not be
required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights
(except prior to the Distribution Date in
accordance with Section 11(n) hereof). 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 the purposes of this
Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on
which such fractional Rights would have been
otherwise issuable. The closing price for any day
shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average
of the closing bid and asked prices, regular way,
in either case as reported in the principal
consolidated transaction reporting system with
respect to securities listed or admitted to trading on
the American or New York Stock Exchange or, if
the Rights are not listed or admitted to trading on
the American or New York Stock Exchange, as
reported in the principal consolidated transaction
reporting system with respect to securities listed on
the principal national securities exchange on which
the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted
price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other
system then in use or, if on any such date the
Rights are not quoted by any such organization,
the average of the closing bid and asked prices as
furnished by a professional market maker making a
market in the Rights selected by the Board of
Directors of the Company. If on any such date no
such market maker is making a market in the
Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors
of the Company shall be used.
(b) The Company shall not be
required to issue fractions of Preferred Stock
(other than fractions which are integral multiples
of one one-thousandth of a share of Preferred
Stock) or to distribute certificates which evidence
fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-
thousandth of a share of Preferred Stock) upon the
exercise or exchange of Rights. Interests in
fractions of Preferred Stock in integral multiples of
one one-thousandth of a share of Preferred Stock
may, at the election of the Company, be evidenced
by depositary receipts, pursuant to an appropriate
agreement between the Company 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 Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred
Stock that are not integral multiples of one one-
thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of
Right Certificates at the time such Rights are
exercised or exchanged as herein provided an
amount in cash equal to the same fraction of the
current market value of a whole share of Preferred
Stock (as determined in accordance with
Section 14(a) hereof) for the Trading Day
immediately prior to the date of such exercise or
exchange.
(c) The Company shall not be
required to issue fractions of shares of Common
Stock or to distribute certificates which evidence
fractional shares of Common Stock upon the
exercise or exchange of Rights. In lieu of such
fractional shares of Common Stock, the Company
shall pay to the registered holders of the Right
Certificates with regard to which such fractional
shares of Common Stock would otherwise be
issuable an amount in cash equal to the same
fraction of the current market value of a whole
share of Common Stock (as determined in
accordance with Section 14(a) hereof) for the
Trading Day immediately prior to the date of such
exercise or exchange.
(d) The holder of a Right by the
acceptance of the Right expressly waives his right
to receive any fractional Rights or any fractional
shares upon exercise or exchange of a Right
(except as provided above).
Section 15. Rights of Action. All
rights of action in respect of this Agreement,
excepting the rights of action given to the Rights
Agent under Section 18 hereof, are vested in the
respective registered holders of the Right
Certificates (and, prior to the Distribution Date,
the registered holders of the Common Stock); and
any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or
of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Common
Stock), on his own behalf and for his own benefit,
may enforce, and may institute and maintain any
suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right
Certificate (or, prior to the Distribution Date, such
Common Stock) in the manner provided therein
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 Right
Holders. Every holder of a Right, by accepting
the same, consents and agrees with the Company
and the Rights Agent and with every other holder
of a Right that:
(a) prior to the Distribution Date,
the Rights will be transferable only in connection
with the transfer of the Common Stock;
(b) after the Distribution Date, the
Right Certificates are transferable only on the
registry books of the Rights Agent if surrendered
at the office or agency of the Rights Agent
designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
and
(c) the Company and the Rights
Agent may deem and treat the Person in whose
name the Right Certificate (or, prior to the
Distribution Date, the Common Stock certificate)
is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right
Certificates or the Common Stock certificate made
by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. Right Certificate Holder
Not Deemed a Stockholder. No holder, as such,
of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose
the holder of the Preferred Stock or any other
securities of the Company which may at any time
be issuable on the exercise or exchange 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
stockholder of the Company or any right to vote
for the election of directors or upon any matter
submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate
action, or to receive notice of meetings or other
actions affecting stockholders (except as provided
in this Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights
evidenced by such Right Certificate shall have
been exercised or exchanged in accordance with
the provisions hereof. The costs and expenses of
enforcing the right of indemnification shall also be
paid by the Company. The indemnification
provided for hereunder shall survive the expiration
of the Rights and termination of this Agreement.
Section 18. Concerning the Rights
Agent.
(a) The Company agrees to pay to
the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other
disbursements incurred in the administration and
execution of this Agreement and the exercise and
performance of its duties hereunder. The
Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any
loss, liability or expense, incurred without negli-
gence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the
acceptance and administration of this Agreement,
including the costs and expenses of defending
against any claim of liability arising therefrom,
directly or indirectly. The costs and expenses of
enforcing this right of indemnification shall also be
paid by the Company. The indemnification
provided for hereunder shall survive the expiration
of the Rights and termination of this Agreement.
(b) The Rights Agent may
conclusively rely upon and 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 the Preferred Stock or Common
Stock or for other securities of the Company,
instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other
paper or document believed by it to be genuine and
to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or
Persons, or otherwise upon the advice of counsel
as set forth in Section 20 hereof.
(c) Notwithstanding anything in
this Agreement to the contrary, in no event shall
the Rights Agent be liable for special, indirect or
consequential loss or damage of any kind
whatsoever (including, but not limited to lost,
profits), even if the Rights Agent has been advised
of the likelihood of such loss or damage and
regardless of the form of the action.
Section 19. Merger or Consolidation
or Change of Name of Rights Agent.
(a) Any corporation into which the
Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated,
or any corporation resulting from any merger or
consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any
corporation succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any
successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the
execution or filing of any paper or any further act
on the part of any of the parties hereto; provided,
that such corporation would be eligible for
appointment as a successor Rights Agent under the
provisions of Section 21 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.
(b) 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
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, and no implied
duties or obligations shall be read into this
Agreement against the Rights Agent, by all of
which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be
bound:
(a) Before the Rights Agent acts or
refrains from acting, the Rights Agent may consult
with legal counsel (who may be legal counsel for
the Company), and the opinion of such counsel
shall be full and complete authorization and
protection to the Rights Agent as to any action
taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance
of its duties under this Agreement the Rights
Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the
Company prior to taking or suffering any action
hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively
proved and established by a certificate signed by
the President and the Secretary of the Company
and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable
hereunder to the Company and any other Person
only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be
liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all
such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be
under any responsibility in respect of the validity
of this Agreement or the execution and delivery
hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its
countersignature thereof); nor shall it be
responsible for any breach by the Company of any
covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of
the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights provided for
in Sections 3, 11, 13, 23 and 24, or the
ascertaining of the existence of facts that would
require any such change or adjustment (except
with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate
furnished pursuant to Section 12, describing such
change or adjustment); nor shall it by any act
hereunder be deemed to make any representation
or warranty as to the authorization or reservation
of any shares of Preferred Stock or other securities
to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of
Preferred Stock or other securities will, when
issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will
perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged
and delivered all such further and other acts,
instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out
or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby
authorized and directed to accept instructions with
respect to the performance of its duties hereunder
from any person reasonably believed by the Rights
Agent to be one of the President or the Secretary
of the Company, and to apply to such officers for
advice or instructions in connection with its duties,
and it shall not be liable for any action taken or
suffered by it in good faith in accordance with
instructions of any such officer or for any delay in
acting while waiting for those instructions. Any
application by the Rights Agent for written
instructions from the Company may, at the option
of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or
after which such action shall be taken or such
omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a
proposal included in any such application on or
after the date specified in such application (which
date shall not be less than five Business Days after
the date any officer of the Company actually
receives such application unless any such officer
shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the
effective date in the case of an omission), the
Rights Agent shall have received written
instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any
stockholder, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or
become pecuniarily interested in any transaction in
which the Company may be interested, or contract
with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute
and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and
the Rights Agent shall not be answerable or
accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such
act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and
continued employment thereof.
(j) If, with respect to any Rights
Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate contained in the
form of assignment or the form of election to
purchase set forth on the reverse thereof, as the
case may be, has not been completed to certify the
holder is not an Acquiring Person (or an Affiliate
or Associate thereof), the Rights Agent shall not
take any further action with respect to such
requested exercise or transfer without first
consulting with the Company.
(k) No provision of this Agreement
shall require the Rights Agent to expend or risk its
own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of
such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(l) Except as expressly provided in
this Agreement, the Rights Agent shall not be
required to take notice or be deemed to have any
notice of any fact, event or determination
(including, without limitation, any dates or events
defined in this Agreement or the designation of
any Person as an Acquiring Person, Affiliate or
Associate) under this Agreement unless and until
the Rights Agent shall be specifically notified in
writing by the Company of such fact, event or
determination.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent
of the Common Stock or Preferred Stock by
registered or certified mail, and, following the
Distribution Date and at the expense of the
Company, to the holders of the Right Certificates
by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common
Stock or Preferred Stock by registered or certified
mail, and, following the Distribution Date, to the
holders of the Right Certificates by first-class mail.
If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such
appointment within a period of 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 Company), then the registered
holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and
doing business under the laws of the United States
or the laws of any state of the United States or the
District of Columbia, in good standing, 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 $50 million. After
appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and
responsibilities as if it had been originally named
as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the
effective date of any such appointment the
Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer
agent of the Common Stock or Preferred Stock,
and, following the Distribution Date, mail a notice
thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any
defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Right
Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in
such forms as may be approved by its Board of
Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class
of shares or other securities or property
purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
In addition, in connection with the issuance or
sale of Common Stock following the Distribution
Date and prior to the Expiration Date, the
Company may with respect to shares of Common
Stock so issued or sold pursuant to (i) the exercise
of stock options, (ii) under any employee plan or
arrangement, (iii) upon the exercise, conversion or
exchange of securities, notes or debentures issued
by the Company or (iv) a contractual obligation of
the Company, in each case existing prior to the
Distribution Date, issue Rights Certificates
representing the appropriate number of Rights in
connection with such issuance or sale.
Section 23. Redemption.
(a) The Board of Directors of the
Company may, at any time prior to the Flip-In
Event, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01
per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction
occurring in respect of the Common Stock after
the date hereof (the redemption price being
hereinafter referred to as the "Redemption Price").
The redemption of the Rights 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. The Redemption Price
shall be payable, at the option of the Company, in
cash, shares of Common Stock, or such other form
of consideration as the Board of Directors shall
determine.
(b) Immediately upon the action of
the Board of Directors ordering the redemption of
the Rights pursuant to paragraph (a) of this
Section 23 (or at such later time as the Board of
Directors may establish for the effectiveness of
such redemption), 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. The Company shall promptly
give public notice of any such redemption;
provided, however, that the failure to give, or any
defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after
such action of the Board of Directors ordering the
redemption of the Rights (or such later time as the
Board of Directors may establish for the
effectiveness of such redemption), the Company
shall mail a notice of redemption to all the holders
of the then outstanding Rights at their last
addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given,
whether or not the holder receives the notice.
Each such notice of redemption shall state the
method by which the payment of the Redemption
Price will be made.
Section 24. Exchange.
(a) The Board of Directors of the
Company may, at its option, at any time after the
Flip-In Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to
the provisions of Section 11(a)(ii) hereof) for
Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend
or similar transaction occurring in respect of the
Common Stock 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
after an Acquiring Person shall have become the
Beneficial Owner of shares of Common Stock
aggregating 50% or more of the shares of
Common Stock then outstanding. From and after
the occurrence of an event specified in
Section 13(a) hereof, 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 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 Company 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 shares of Common Stock equal to the
number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such
exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect
the validity of such exchange. The Company 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 shares of
Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of
Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the
number of Rights (other than Rights which have
become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of
Rights.
(c) The Company may at its option
substitute, and, in the event that there shall not be
sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit an
exchange of Rights for Common Stock as
contemplated in accordance with this Section 24,
the Company shall substitute to the extent of such
insufficiency, for each share of Common Stock
that would otherwise be issuable upon exchange of
a Right, a number of shares of Preferred Stock 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 share of
Preferred Stock (or Equivalent Preferred Share)
multiplied by such number or fraction is equal to
the current per share market price of one share of
Common Stock (determined pursuant to
Section 11(d) hereof) as of the date of such
exchange.
Section 25. Notice of Certain
Events.
(a) In case the Company shall at
any time after the earlier of the Distribution Date
or the Stock Acquisition Date propose (i) to pay
any dividend payable in stock of any class to the
holders of its Preferred Stock or to make any other
distribution to the holders of its Preferred Stock
(other than a regular quarterly cash dividend), (ii)
to offer to the holders of its Preferred Stock rights
or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification
involving only the subdivision or combination of
outstanding Preferred Stock), (iv) to effect the
liquidation, dissolution or winding up of the
Company, or (v) to pay any dividend on the
Common Stock payable in Common Stock or to
effect a subdivision, combination or consolidation
of the Common Stock (by reclassification or
otherwise than by payment of dividends in
Common Stock), then, in each such case, the
Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof,
a notice of such proposed action, which shall
specify the record date for the purposes of such
dividend or distribution or offering of rights or
warrants, or the date on which such liquidation,
dissolution, winding up, reclassification,
subdivision, combination or consolidation is to
take place and the date of participation therein by
the holders of the Common Stock and/or Preferred
Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of
the Preferred Stock for purposes of such action,
and in the case of any such other action, at least 10
days prior to the date of the taking of such
proposed action or the date of participation therein
by the holders of the Common Stock and/or
Preferred Stock, whichever shall be the earlier.
(b) In case any event described in
Section 11(a)(ii) or Section 13 shall occur then the
Company shall as soon as practicable thereafter
give to each holder of a Right Certificate (or if
occurring prior to the Distribution Date, the
holders of the Common Stock) in accordance with
Section 26 hereof, a notice of the occurrence of
such event, which notice shall describe such event
and the consequences of such event to holders of
Rights under Section 11(a)(ii) and Section 13
hereof.
Section 26. Notices. Notices or
demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of
any Right Certificate to or on the Company shall
be sufficiently given or made if sent by, first-class
mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent)
as follows:
Landmark Bancorp, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx
00000-0000
Attention: President
Subject to the provisions of Section 21 hereof, any
notice or demand authorized by this Agreement to
be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by
registered or certified mail and shall be deemed
given upon receipt, addressed (until another
address is filed in writing with the Company) as
follows:
Landmark National Bank
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx
00000-0000
Attention: President
Notices or demands authorized by this Agreement
to be given or made by the Company or the Rights
Agent to the holder of any Right Certificate shall
be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and
Amendments. Except as provided in the
penultimate sentence of this Section 27, for so long
as the Rights are then redeemable, the Company
may in its sole and absolute discretion, and the
Rights Agent shall if the Company so directs and
at the expense of the Company, 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 provided in the penultimate
sentence of this Section 27, the Company may,
and the Rights Agent shall, if the Company so
directs and at the expense of the Company,
supplement or amend this Agreement without the
approval of any holders of Rights, provided that
no such supplement or amendment may (a)
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),
(b) cause this Agreement again to become
amendable other than in accordance with this
sentence or (c) cause the Rights again to become
redeemable. Notwithstanding anything contained
in this Agreement to the contrary, no supplement
or amendment shall be made which changes the
Redemption Price. Upon the delivery of a
certificate from an appropriate officer of the
Company which states that the supplement or
amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such
supplement or amendment, provided that any
supplement or amendment that does not change the
rights and duties of the Rights Agent under this
Agreement in a manner adverse to the Rights
Agent shall become effective against all parties
immediately upon execution by the Company,
whether or not also executed by the Rights Agent,
and provided further, that any supplement or
amendment that changes the rights and duties of
the Rights Agent under this Agreement in a
manner adverse to the Rights Agent shall become
effective against the Rights Agent only upon the
execution of such supplement or amendment by the
Rights Agent.
Section 28. Successors. All the
covenants and provisions of this Agreement by or
for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Benefits of this
Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the
Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal
or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 30. Determinations and
Actions by the Board of Directors. The Board of
Directors of the Company shall have the exclusive
power and authority to administer this Agreement
and to exercise the rights and powers specifically
granted to the Board of Directors of the Company
or to the Company, or as may be necessary or
advisable in the administration of this Agreement,
including, without limitation, the right and power
to (i) interpret the provisions of this Agreement
and (ii) make all determinations deemed necessary
or advisable for the administration of this
Agreement (including, without limitation, a
determination to redeem or not redeem the Rights
or to amend or not amend this Agreement). All
such actions, calculations, interpretations and
determinations that are done or made by the Board
of Directors of the Company in good faith, shall
be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights, as
such, and all other parties.
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 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 such State applicable
to contracts to be made and performed entirely
within such State.
Section 33. Counterparts. This
Agreement may be executed in any number of
counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and
all such counterparts shall together constitute but
one and the same instrument.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this
Agreement are inserted for convenience only and
shall not control or affect the meaning or
construction of any of the provisions hereof.
[THIS SPACE LEFT INTENTIONALLY
BLANK]
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be
duly executed, all as of the day and year first
above written.
LANDMARK BANCORP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and
Chief Executive Officer
LANDMARK NATIONAL BANK, as Rights Agent
By: /s/Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and
Chief Executive Officer
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
of
Landmark Bancorp, Inc.
Pursuant to Section 151 of the General
Corporation Law
of the State of Delaware
Landmark Bancorp, Inc., a corporation
organized and existing under the General
Corporation Law of the State of Delaware, in
accordance with the provisions of Section 103
thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in
the Board of Directors in accordance with the
provisions of the Certificate of Incorporation of the
said Corporation, the said Board of Directors on
September 27, 2001, adopted the following
resolution creating a series of 6,000 shares of
Preferred Stock designated as "Series A Junior
Participating Preferred Stock":
RESOLVED, that
pursuant to the authority
vested in the Board of
Directors of this
Corporation in accordance
with the provisions of the
Certificate of
Incorporation, a series of
Preferred Stock, par value
$0.01 per share, of the
Corporation be and hereby
is created, and that the
designation and number of
shares thereof and the
voting and other powers,
preferences and relative,
participating, optional or
other rights of the shares of
such series and the
qualifications, limitations
and restrictions thereof are
as follows:
Series A Junior Participating Preferred Stock
1. Designation and Amount.
There shall be a series of Preferred Stock that shall
be designated as "Series A Junior Participating
Preferred Stock," and the number of shares
constituting such series shall be 6,000. Such
number of shares may be increased or decreased
by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number
of shares of Series A Junior Participating
Preferred Stock to less than the number of shares
then issued and outstanding plus the number of
shares issuable upon exercise of outstanding rights,
options or warrants or upon conversion of
outstanding securities issued by the Corporation.
2. Dividends and Distribution.
(A) Subject to the prior and
superior rights of the holders of any shares of any
class or series of stock of the Corporation ranking
prior and superior to the shares of Series A Junior
Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior
Participating Preferred Stock, in preference to the
holders of shares of any class or series of stock of
the Corporation ranking junior to the Series A
Junior Participating Preferred Stock in respect
thereof, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds
legally available for the purpose, quarterly
dividends payable in cash on the first business day
of January, April, July and October in each year
(each such date being referred to herein as a
"Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or
fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per one one-
thousandth of a share (rounded to the nearest cent)
equal to the greater of (a) $0.10 or (b) the
Adjustment Number (as defined below) times the
aggregate per share amount of all cash dividends,
and the Adjustment Number times the aggregate
per share amount (payable in kind) of all non-cash
dividends or other distributions other than a
dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared
on the Common Stock, par value $0.01 per share,
of the Corporation (the "Common Stock") since
the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of
Series A Junior Participating Preferred Stock. The
"Adjustment Number" shall initially be 1,000. In
the event the Corporation shall at any time after
February 1, 2002, (i) declare and pay any dividend
on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect
immediately prior to such event shall be adjusted
by multiplying such Adjustment Number by a
fraction the numerator of which is the number of
shares of Common Stock outstanding immediately
after such event and the denominator of which is
the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall
declare a dividend or distribution on the Series A
Junior Participating Preferred Stock as provided in
paragraph (A) above immediately after it declares
a dividend or distribution on the Common Stock
(other than a dividend payable in shares of
Common Stock).
(C) Dividends shall begin to
accrue and be cumulative on outstanding shares of
Series A Junior Participating Preferred Stock from
the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the
date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the
record date for the determination of holders of
shares of Series A Junior Participating Preferred
Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin
to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid
on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may
fix a record date for the determination of holders
of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date
shall be no more than 60 days prior to the date
fixed for the payment thereof.
3. Voting Rights. The holders of
shares of Series A Junior Participating Preferred
Stock shall have the following voting rights:
(A) Each share of Series A
Junior Participating Preferred Stock shall entitle
the holder thereof to a number of votes equal to
the Adjustment Number on all matters submitted to
a vote of the stockholders of the Corporation.
(B) Except as required by
law, by Section 3(C) and by Section 10 hereof,
holders of Series A Junior Participating Preferred
Stock shall have no special voting rights and their
consent shall not be required (except to the extent
they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate
action.
(C) If, at the time of any
annual meeting of stockholders for the election of
directors, the equivalent of six quarterly dividends
(whether or not consecutive) payable on any share
or shares of Series A Junior Participating Preferred
Stock are in default, the number of directors
constituting the Board of Directors of the
Company shall be increased by two. In addition to
voting together with the holders of Common Stock
for the election of other directors of the Company,
the holders of record of the Series A Junior
Participating Preferred Stock, voting separately as
a class to the exclusion of the holders of Common
Stock, shall be entitled at said meeting of
stockholders (and at each subsequent annual
meeting of stockholders), unless all dividends in
arrears on the Series A Junior Participating
Preferred Stock have been paid or declared and set
apart for payment prior thereto, to vote for the
election of two directors of the Company, the
holders of any Series A Junior Participating
Preferred Stock being entitled to cast a number of
votes per share of Series A Junior Participating
Preferred Stock as is specified in paragraph (A) of
this Section 3. Each such additional director shall
serve until his successor shall be elected and shall
qualify, or until his right to hold such office
terminates pursuant to the provisions of this
Section 3(C). If and when such default shall cease
to exist, the holders of the Series A Junior
Participating Preferred Stock shall be divested of
the foregoing special voting rights, subject to
revesting in the event of each and every subsequent
like default in payments of dividends. Upon the
termination of the foregoing special voting rights,
the terms of office of all persons who may have
been elected directors pursuant to said special
voting rights shall forthwith terminate, and the
number of directors constituting the Board of
Directors shall be reduced by two. The voting
rights granted by this Section 3(C) shall be in
addition to any other voting rights granted to the
holders of the Series A Junior Participating
Preferred Stock in this Section 3.
4. Certain Restrictions.
(A) Whenever quarterly
dividends or other dividends or distributions
payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not
declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall
have been paid in full, the Corporation shall not:
(i) declare or pay
dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior
Participating Preferred Stock;
(ii) declare or pay
dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating
Preferred Stock, except dividends paid ratably on
the Series A Junior Participating Preferred Stock
and all such parity stock on which dividends are
payable or in arrears in proportion to the total
amounts to which the holders of all such shares are
then entitled; or
(iii) purchase or
otherwise acquire for consideration any shares of
Series A Junior Participating Preferred Stock, or
any shares of stock ranking on a parity with the
Series A Junior Participating Preferred Stock,
except in accordance with a purchase offer made in
writing or by publication (as determined by the
Board of Directors) to all holders of Series A
Junior Participating Preferred Stock, or to such
holders and holders of any such shares ranking on
a parity therewith, 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 stock of the Corporation unless the
Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
5. Reacquired Shares. Any shares
of Series A Junior Participating Preferred Stock
purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be
retired promptly after the acquisition thereof. All
such shares shall upon their retirement become
authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of
Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to
any conditions and restrictions on issuance set
forth herein.
6. Liquidation, Dissolution or
Winding Up. (A) Upon any liquidation, dissolution
or winding up of the Corporation, voluntary or
otherwise, no distribution shall be made to the
holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating
Preferred Stock unless, prior thereto, the holders
of shares of Series A Junior Participating Preferred
Stock shall have received an amount per one
thousandth of a share (the "Series A Liquidation
Preference") equal to the greater of (i) $60.00 plus
an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared,
to the date of such payment, or (ii) the Adjustment
Number times the per share amount of all cash and
other property to be distributed in respect of the
Common Stock upon such liquidation, dissolution
or winding up of the Corporation.
(B) In the event, however,
that there are not sufficient assets available to
permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all
other classes and series of stock of the
Corporation, if any, that rank on a parity with the
Series A Junior Participating Preferred Stock in
respect thereof, then the assets available for such
distribution shall be distributed ratably to the
holders of the Series A Junior Participating
Preferred Stock and the holders of such parity
shares in proportion to their respective liquidation
preferences.
(C) Neither the merger or
consolidation of the Corporation into or with
another corporation nor the merger or
consolidation of any other corporation into or with
the Corporation shall be deemed to be a
liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 6.
7. Consolidation, Merger, Etc. In
case the Corporation shall enter into any
consolidation, merger, combination or other
transaction in which the outstanding shares of
Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other
property, then in any such case each share of
Series A Junior Participating Preferred Stock shall
at the same time be similarly exchanged or
changed in an amount per share equal to the
Adjustment Number times the aggregate amount of
stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which
or for which each share of Common Stock is
changed or exchanged.
8. No Redemption. Shares of
Series A Junior Participating Preferred Stock shall
not be subject to redemption by the Company.
9. Ranking. The Series A Junior
Participating Preferred Stock shall rank junior to
all other series of the Preferred Stock as to the
payment of dividends and as to the distribution of
assets upon liquidation, dissolution or winding up,
unless the terms of any such series shall provide
otherwise, and shall rank senior to the Common
Stock as to such matters.
10. Amendment. At any time that
any shares of Series A Junior Participating
Preferred Stock are outstanding, the Certificate of
Incorporation of the Corporation shall not be
amended in any manner which would materially
alter or change the powers, preferences or special
rights of the Series A Junior Participating
Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-
thirds of the outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as
a class.
11. Fractional Shares. Series A
Junior Participating Preferred Stock may be issued
in fractions of a share that shall entitle the holder,
in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends,
participate in distributions and to have the benefit
of all other rights of holders of Series A Junior
Participating Preferred Stock.
IN WITNESS WHEREOF, the
undersigned has executed this Certificate this
[____] day of [___________], 2002.
LANDMARK BANCORP, INC.
By:
Name:
Title:
Exhibit B
Form of Right Certificate
Certificate No. R-______
NOT EXERCISABLE
AFTER OCTOBER 3,
2011, OR EARLIER IF
REDEMPTION OR
EXCHANGE OCCURS.
THE RIGHTS ARE
SUBJECT TO
REDEMPTION AT $.01
PER RIGHT AND TO
EXCHANGE ON THE
TERMS SET FORTH IN
THE RIGHTS
AGREEMENT. UNDER
CERTAIN
CIRCUMSTANCES, AS
SET FORTH IN THE
RIGHTS AGREEMENT,
RIGHTS OWNED BY OR
TRANSFERRED TO ANY
PERSON WHO IS OR
BECOMES AN
ACQUIRING PERSON
(AS DEFINED IN THE
RIGHTS AGREEMENT)
AND CERTAIN
TRANSFEREES
THEREOF WILL
BECOME NULL AND
VOID AND WILL NO
LONGER BE
TRANSFERABLE.
RIGHT CERTIFICATE
LANDMARK BANCORP, INC.
This certifies that
____________________________ or registered
assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of
October 3, 2001, as the same may be amended
from time to time (the "Rights Agreement"),
between Landmark Bancorp, Inc., a Delaware
corporation (the "Company"), and Landmark
National Bank, as Rights Agent (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., Manhattan, Kansas time, on October 3,
2011, at the office or agency of the Rights Agent
designated for such purpose, or of its successor as
Rights Agent, one one-thousandth of a fully paid
non-assessable share of Series A Junior
Participating Preferred Stock, par value $0.01 per
share (the "Preferred Stock"), of the Company at a
purchase price of $60.00 per one one-thousandth
of a share of Preferred Stock (the "Purchase
Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to
Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the
number of one one-thousandths of a share of
Preferred Stock which may be purchased upon
exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase
Price as of February 1, 2002, based on the
Preferred Stock as constituted at such date. As
provided in the Rights Agreement, the Purchase
Price, the number of one one-thousandths of a
share of Preferred Stock (or other securities or
property) which may be purchased upon the
exercise of the Rights and the number of Rights
evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all
of the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by
reference and made a part hereof and to which
Rights Agreement reference is hereby made for a
full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights
Agreement are on file at the principal executive
offices of the Company and the above-mentioned
office or agency of the Rights Agent. The
Company will mail to the holder of this Right
Certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor.
This Right Certificate, with or without
other Right Certificates, upon surrender at the
office or agency of the Rights Agent designated for
such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of
Preferred Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered
shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right
Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights
Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company
at a redemption price of $0.01 per Right or (ii)
may be exchanged in whole or in part for shares of
the Company's Common Stock, par value $0.01
per share, or shares of Preferred Stock.
No fractional shares of Preferred Stock
or Common Stock will be issued upon the exercise
or exchange of any Right or Rights evidenced
hereby (other than fractions of Preferred Stock
which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by
depository receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, as
such, shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of the
Preferred Stock or of any other securities of the
Company which may at any time be issuable on
the exercise or exchange hereof, nor shall anything
contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the
Company or any right to vote for the election of
directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to
receive notice of meetings or other actions
affecting stockholders (except as provided in the
Rights Agreement) or to receive dividends or
subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall
have been exercised or exchanged as provided in
the Rights Agreement.
This Right Certificate shall not be valid
or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.
WITNESS the facsimile signature of
the proper officers of the Company and its
corporate seal. Dated as of ,
________.
LANDMARK BANCORP, INC.
By:__________________________________
[Title]
ATTEST:
____________________________________
[Title]
Countersigned:
LANDMARK NATIONAL BANK, as Rights
Agent
By__________________________________
[Title]
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED ______________________ hereby sells,
assigns and transfers unto ___________________________
______________________________________________________
_______________________________
(Please print name and address of transferee)
_______ Rights represented by this Right
Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and
appoint ___________________________
Attorney, to transfer said Rights on the books of
the within-named Company, with full power of
substitution.
Dated: ____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a
bank, trust company, broker, dealer or other
eligible institution participating in a recognized
signature guarantee medallion program.
..................................................
(To be completed)
The undersigned hereby certifies that
the Rights evidenced by this Right Certificate are
not beneficially owned by, were not acquired by
the undersigned from, and are not being assigned
to an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
_________________________________
Signature
Form of Reverse Side of Right Certificate -
continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To LANDMARK BANCORP, INC.:
The undersigned hereby irrevocably
elects to exercise ________ Rights represented by
this Right Certificate to purchase the shares of
Preferred Stock (or other securities or property)
issuable upon the exercise of such Rights and
requests that certificates for such shares of
Preferred Stock (or such other securities) be issued
in the name of:
____________________________________________________
(Please print name and address)
____________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right
Certificate for the balance remaining of such
Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
_______________________________________________
(Please print name and address)
_______________________________________________
Dated:______________________
_______________________________
Signature
(Signature must conform to holder specified on
Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by a
bank, trust company, broker, dealer or other
eligible institution participating in a recognized
signature guarantee medallion program.
Form of Reverse Side of Right Certificate -
continued
_____________________________________________
(To be completed)
The undersigned certifies that the
Rights evidenced by this Right Certificate are not
beneficially owned by, and were not acquired by
the undersigned from, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the
Rights Agreement).
_________________________________
Signature
_______________________________________________
NOTICE
The signature in the Form of Assignment
or Form of Election to Purchase, as
the case may be, must conform to the name as
written upon the face of this Right Certificate in
every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth
above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not
completed, such Assignment or Election to
Purchase will not be honored.
Exhibit C
UNDER CERTAIN
CIRCUMSTANCES, AS
SET FORTH IN THE
RIGHTS AGREEMENT,
RIGHTS OWNED BY OR
TRANSFERRED TO ANY
PERSON WHO IS OR
BECOMES AN
ACQUIRING PERSON
(AS DEFINED IN THE
RIGHTS AGREEMENT)
AND CERTAIN
TRANSFEREES
THEREOF WILL
BECOME NULL AND
VOID AND WILL NO
LONGER BE
TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF PREFERRED STOCK OF
LANDMARK BANCORP, INC.
On September 27, 2001, the Board of
Directors of Landmark Bancorp, Inc. (the
"Company") declared a dividend of one preferred
share purchase right (a "Right") for each
outstanding share of common stock, par value
$0.01 per share, of the Company (the "Common
Stock"). The dividend is payable on February 13,
2002, to the stockholders of record on, February
1, 2002 (the "Record Date"). Each Right entitles
the registered holder to purchase from the
Company one one-thousandth of a share of Series
A Junior Participating Preferred Stock, par value
$0.01 per share, of the Company (the "Preferred
Stock") at a price of $60.00 per
one one-thousandth of a share of Preferred Stock
(the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in
a Rights Agreement dated as of October 3, 2001,
as the same may be amended from time to time
(the "Rights Agreement"), between the Company
and Landmark National Bank, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days
following a public announcement that a person or
group of affiliated or associated persons (with
certain exceptions, an "Acquiring Person") has
acquired beneficial ownership of 15% or more of
the outstanding shares of Common Stock or (ii) 10
business days (or such later date as may be
determined by action of the Board of Directors
prior to such time as any person or group of
affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement
of an intention to make, a tender offer or exchange
offer the consummation of which would result in
the beneficial ownership by a person or group of
15% or more of the outstanding shares of
Common Stock (the earlier of such dates being
called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common
Stock certificates outstanding as of the Record
Date, by such Common Stock certificate together
with a copy of this Summary of Rights.
The Rights Agreement provides that,
until the Distribution Date (or earlier expiration of
the Rights), the Rights will be transferred with and
only with the Common Stock. Until the
Distribution Date (or earlier expiration of the
Rights), new Common Stock certificates issued
after the Record Date upon transfer or new
issuances of Common Stock will contain a notation
incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier expiration of
the Rights), the surrender for transfer of any
certificates for shares of Common Stock
outstanding as of the Record Date, even without
such notation or a copy of this Summary of Rights,
will also constitute the transfer of the Rights
associated with the shares of Common Stock
represented by such certificate. As soon as
practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record
of the Common Stock as of the close of business
on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the
Distribution Date. The Rights will expire on
October 3, 2011 (the "Final Expiration Date"),
unless the Final Expiration Date is advanced or
extended or unless the Rights are earlier redeemed
or exchanged by the Company, in each case as
described below.
The Purchase Price payable, and the
number of shares of Preferred Stock or other
securities or property issuable, upon exercise of
the Rights is subject to adjustment from time to
time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon
the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities
convertible into Preferred Stock with a conversion
price, less than the then-current market price of the
Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic
cash dividends or dividends payable in Preferred
Stock) or of subscription rights or warrants (other
than those referred to above).
The number of outstanding Rights is
subject to adjustment in the event of a stock
dividend on the Common Stock payable in shares
of Common Stock or subdivisions, consolidations
or combinations of the Common Stock occurring,
in any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable
upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be
entitled, when, as and if declared, to a minimum
preferential quarterly dividend payment of the
greater of (a) $0.10 per one one-thousandth of a
share, and (b) an amount equal to 1,000 times the
dividend declared per share of Common Stock. In
the event of liquidation, dissolution or winding up
of the Company, the holders of the Preferred
Stock will be entitled to a minimum preferential
payment of the greater of (a) $60.00 per
one one-thousandth of a share (plus any accrued
but unpaid dividends), (b) an amount equal to
1,000 times the payment made per share of
Common Stock. Each one one-thousandth of a
share of Preferred Stock will have one vote, voting
together with the Common Stock. Finally, in the
event of any merger, consolidation or other
transaction in which outstanding shares of
Common Stock are converted or exchanged, each
one one-thousandth of a share of Preferred Stock
will be entitled to receive the same amount
received per one share of Common Stock. These
rights are protected by customary antidilution
provisions.
Because of the nature of the
Preferred Stock's dividend, liquidation and voting
rights, the value of the one one-thousandth interest
in a share of Preferred Stock purchasable upon
exercise of each Right should approximate the
value of one share of Common Stock.
In the event that any person or
group of affiliated or associated persons becomes
an Acquiring Person, each holder of a Right, other
than Rights beneficially owned by the Acquiring
Person (which will thereupon become void), will
thereafter have the right to receive upon exercise
of a Right that number of shares of Common Stock
having a market value of two times the exercise
price of the Right.
In the event that, after a person or
group has become an Acquiring Person, the
Company is acquired in a merger or other business
combination transaction or 50% or more of its
consolidated assets or earning power are sold,
proper provisions will be made so that each holder
of a Right (other than Rights beneficially owned
by an Acquiring Person which will have become
void) will thereafter have the right to receive upon
the exercise of a Right that number of shares of
common stock of the person with whom the
Company has engaged in the foregoing transaction
(or its parent) that at the time of such transaction
have a market value of two times the exercise price
of the Right.
At any time after any person or
group becomes an Acquiring Person and prior to
the earlier of one of the events described in the
previous paragraph or the acquisition by such
Acquiring Person of 50% or more of the
outstanding shares of Common Stock, the Board of
Directors of the Company may exchange the
Rights (other than Rights owned by such Acquiring
Person which will have become void), in whole or
in part, for shares of Common Stock or Preferred
Stock (or a series of the Company's preferred
stock having equivalent rights, preferences and
privileges), at an exchange ratio of one share of
Common Stock, or a fractional share of Preferred
Stock (or other preferred stock) equivalent in value
thereto, per Right.
With certain exceptions, no
adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment
of at least 1% in such Purchase Price. No
fractional shares of Preferred Stock or Common
Stock will be issued (other than fractions of
Preferred Stock which are integral multiples of one
one-thousandth of a share of Preferred Stock,
which may, at the election of the Company, be
evidenced by depositary receipts), and in lieu
thereof an adjustment in cash will be made based
on the current market price of the Preferred Stock
or the Common Stock.
At any time prior to the time an
Acquiring Person becomes such, the Board of
Directors of the Company may redeem the Rights
in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price") payable, at the
option of the Company, in cash, shares of
Common Stock or such other form of
consideration as the Board of Directors of the
Company shall determine. The redemption of the
Rights 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.
Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to
receive the Redemption Price.
For so long as the Rights are then
redeemable, the Company may, except with
respect to the Redemption Price, amend the Rights
Agreement in any manner. After the Rights are no
longer redeemable, the Company may, except with
respect to the Redemption Price, amend the Rights
Agreement in any manner that does not adversely
affect the interests of holders of the Rights.
Until a Right is exercised or
exchanged, the holder thereof, as such, will have
no rights as a stockholder of the Company,
including, without limitation, the right to vote or
to receive dividends.
A copy of the Rights Agreement has
been filed with the Securities and Exchange
Commission as an Exhibit to a report on Form 8-K
dated January 22, 2002. A copy of the Rights
Agreement is available free of charge from the
Company. This summary description of the Rights
does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement,
as the same may be amended from time to time,
which is hereby incorporated herein by reference.
