EXHIBIT 4
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RIGHTS AGREEMENT
between
OLD KENT FINANCIAL CORPORATION
and
OLD KENT BANK
as
Rights Agent
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Dated as of January 20, 1997
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . .1
Section 2. Appointment of Rights Agent. . . . . . . . . . . . . . . . . .4
Section 3. Issue of Rights Certificates . . . . . . . . . . . . . . . . .5
Section 4. Form of Rights Certificates. . . . . . . . . . . . . . . . . .7
Section 5. Countersignature and Registration. . . . . . . . . . . . . . .8
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . . . . . . . . . . . . . .8
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights . . . . . . . . . . . . . . . . . . . . . . . . . .9
Section 8. Cancellation and Destruction of Rights Certificates. . . . . 12
Section 9. Reservation and Availability of Capital Stock. . . . . . . . 12
Section 10. Preferred Stock Record Date. . . . . . . . . . . . . . . . . 14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights . . . . . . . . . . . . . . . . . . . . 15
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power. . . . . . . . . . . . . . . . . . . . . . 26
Section 14. Fractional Rights and Fractional Shares. . . . . . . . . . . 29
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . 30
Section 16. Agreement of Rights Holders. . . . . . . . . . . . . . . . . 31
Section 17. Rights Certificate Holder Not Deemed a Shareholder . . . . . 31
Section 18. Concerning the Rights Agent. . . . . . . . . . . . . . . . . 32
Section 19. Merger or Consolidation or Change of Name of Rights
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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PAGE
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . 33
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . 35
Section 22. Issuance of New Rights Certificates. . . . . . . . . . . . . 36
Section 23. Redemption and Termination . . . . . . . . . . . . . . . . . 37
Section 24. Notice Of Certain Events . . . . . . . . . . . . . . . . . . 38
Section 25. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 26. Supplements and Amendments . . . . . . . . . . . . . . . . . 40
Section 27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 28. Determinations and Actions by the Board of Directors,
etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . . 41
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 31. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 42
Section 32. Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . 42
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . 42
Exhibit A Certificate of Designation, Preferences and Rights
of Series C Preferred Stock
Exhibit B Form of Rights Certificate
Exhibit C Summary of Rights
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (the "Agreement") is made as of January 20,
1997, between OLD KENT FINANCIAL CORPORATION, a Michigan corporation (the
"Company"), and OLD KENT BANK, a Michigan banking corporation (the "Rights
Agent").
P R E A M B L E
On January 20, 1997 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend of one
Series C Preferred Stock Purchase Right (the "Rights") on each share of
common stock, $1.00 par value, of the Company (the "Common Stock")
outstanding on February 14, 1997 (the "Record Date"), and has authorized
the issuance of one Right with respect to each share of Common Stock that
shall become outstanding between February 14, 1997, and the earlier of the
Distribution Date or the Expiration Date (as such terms are defined in
Sections 3 and 7 of this Agreement). Each Right represents the right to
purchase one one-hundredth of a share of Series C Preferred Stock, no par
value, having the rights, powers and preference set forth in the form of
Certificate of Designation, Preferences and Rights of Series C Preferred
Stock attached as Exhibit A to this Agreement (the "Preferred Stock"), upon
the terms and subject to the conditions set forth in this Agreement.
ACCORDINGLY, in consideration of the premises and the mutual
agreements set forth in this Agreement, the parties agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person, individual or
corporate, who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding, but shall
not include the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan.
(b) "Adverse Person" shall mean any Person declared to be
an Adverse Person by the Board of Directors upon a determination
that the criteria set forth in Section 11(a)(ii)(D) apply to such
Person.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended and in effect on the date of this Agreement (the
"Exchange Act").
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights that are
subject to this Agreement), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own,"
securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership"
(as determined pursuant to Rule 13d-3 of the General Rules
and Regulations under the Exchange Act, including pursuant
to any agreement, arrangement or understanding, whether or
not in writing); PROVIDED, HOWEVER, that a Person shall not
be deemed the "Beneficial Owner" of, or to "beneficially
own," any security under this subparagraph (iii) as a result
of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (A)
arises solely from a revocable proxy given in response to a
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, or (B) is made
in connection with, or is to otherwise participate in, a
proxy or consent solicitation made, or to be made, pursuant
to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, in
either case described in clause (A) or (B) above, whether or
not such agreement, arrangement or understanding is also
then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
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Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except as set
forth in clauses (A) or (B) to the provision to subparagraph
(ii) of this Section 1(c)) or disposing of any voting
securities of the Company.
Notwithstanding the foregoing, any agreement,
arrangement or understanding (whether or not in writing), or
any communications or discussions, among two or more Persons
with respect to any matter relating to the management,
operation or conduct of the business of the Company, and
including discussing or agreeing on, or communicating with
respect to, a position on any such matter and communicating
such discussion, communication, agreement or position to
other Persons (including shareholders of the Company) or to
the Company shall not constitute an "agreement, arrangement
or understanding" for purpose of this Section 1(d). In
addition, nothing in this paragraph (d) shall cause a person
engaged in business as an underwriter of securities to be
the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in
good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a legal holiday.
(f) "Close of business" on any given date shall mean 5
p.m., Grand Rapids, Michigan time, on such date; PROVIDED,
HOWEVER, that if such date is not a Business Day it shall mean 5
p.m., Grand Rapids, Michigan time, on the next succeeding
Business Day.
(g) "Common Stock" shall mean the common stock, par value
$1.00 per share of the Company, except that "Common Stock" when
used with reference to any Person other than the Company shall
mean the capital stock of such Person with the greatest voting
power, or the equity securities or other equity interest having
power to control or direct the management of such Person.
(h) "Continuing Director" shall mean (i) any member of the
Board of Directors of the Company while such Person is a member
of the Board, who is not an Acquiring Person, an Adverse Person,
or an Affiliate or Associate of an Acquiring Person or Adverse
Person, or a representative of an Acquiring Person or Adverse
Person or of any such Affiliate or Associate, and was a member of
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the Board prior to the date of this Agreement, or (ii) any Person
who subsequently becomes a member of the Board, or while such
Person is a member of the Board, who is not an Acquiring Person
or Adverse Person, or an Affiliate or Associate of an Acquiring
Person or Adverse Person, or a representative of an Acquiring
Person or Adverse Person or of any such Affiliate or Associate,
if such Person's nomination for election or election to the Board
is recommended or approved by a majority of the Continuing
Directors.
(i) "Current Market Price" shall have the meaning ascribed
to such term in Section 11(d) of this Agreement.
(j) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(k) "Preferred Stock" shall mean shares of Series C
Preferred Stock, no par value, of the Company described in the
preamble to this Agreement and, to the extent that there are not
sufficient shares of Series C Preferred Stock authorized to
permit full exercise of the Rights, any other series of Preferred
Stock, no par value, of the Company designated for such purpose
containing terms substantially similar to the terms of the Series
C Preferred Stock.
(l) "Section 11 Event" shall mean any event described in
Section 11(a)(ii)(A), (B), (C) or (D) of this Agreement.
(m) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) of this Agreement.
(n) "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) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(o) "Subsidiary" shall mean, with reference to any Person,
any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.
(p) "Triggering Event" shall mean any Section 11 Event or
any Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the
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Rights (who, in accordance with Section 3 of this Agreement, shall prior
to the Distribution Date also be the holders of the Common Stock) in
accordance with the terms and conditions set forth in this Agreement, and
the Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such Co-Rights Agents as it deems necessary or
desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date (or, if the tenth day
after the Stock Acquisition Date occurs before the Record Date,
the close of business on the Record Date), (ii) the close of
business on the tenth Business Day after the date that a tender
or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14e-2(a) of the General
Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner
of 15% or more of the shares of Common Stock then outstanding or
(iii) the close of business on the tenth Business Day after the
Board of Directors determines, pursuant to the criteria set forth
in Section 11(a)(ii)(D) of this Agreement, that Person is an
Adverse Person (the earliest of (i), (ii) and (iii) being
referred to in this Agreement as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates,
and (y) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock (including
a transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class,
postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one
or more rights certificates, in substantially the form of Exhibit
B to this Agreement (the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held, subject to
adjustment as provided in this Agreement. In the event that an
adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11(p) to this Agreement, at the
time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in
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accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
(b) As promptly as practicable following the Record Date,
the Company will send a copy of a Summary of Rights which may,
but need not be, in substantially the form attached hereto as
Exhibit C (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the
close of business on the Record Date, at the address of such
holder shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced
by such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered holders
of the associated Rights. Until the earlier of the Distribution
Date or the Expiration Date (as such term is defined in Section 7
of this Agreement), the transfer of any certificates representing
shares of Common Stock in respect of which Rights have been
issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or
delivered from the Company's treasury) after the Record Date but
prior to the earlier of the Distribution Date or the Expiration
Date, or, in certain circumstances provided in Section 22 hereof,
after the Distribution Date. Certificates representing such
shares of Common Stock shall also be deemed to be certificates
for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between Old Kent Financial Corporation (the "Company") and
Old Kent Bank (the "Rights Agent") dated as of January 20,
1997, as from time to time amended (the "Rights Agreement"),
the terms of which are incorporated herein by reference and
a copy of which is on file at the principal offices of the
Company. Under certain circumstances set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge, promptly after receipt
of a written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to, or held
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by, any Person who is, was or becomes an Acquiring Person or
Adverse Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii)
the Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall
also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit B to
this Agreement and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time
be listed or any rule or regulation of the National Association
of Securities Dealers, Inc. applicable to securities traded on
The NASDAQ Stock Market if the Rights are listed for trading
thereon, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 of this Agreement, the Rights
Certificates, whenever distributed, shall be dated as of the
Record Date and on their face shall entitle the holders thereof
to purchase such number of one one-hundredths of a share of
Preferred Stock as shall be set forth therein at the price set
forth therein (such exercise price per one one-hundredth of a
share being referred to as the "Purchase Price"), but the amount
and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to
adjustment as provided in this Agreement.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 of this Agreement that represents Rights
beneficially owned by: (i) an Acquiring Person, an Adverse
Person, or any Associate or Affiliate of an Acquiring Person or
Adverse Person, (ii) a transferee of an Acquiring Person or
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Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person or Adverse Person
becomes such, or (iii) a transferee of an Acquiring Person or
Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to
holders of equity interests in such Acquiring Person or Adverse
Person or to any Person with whom such Acquiring Person or
Adverse Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) of this
Agreement, and any Rights Certificate issued pursuant to Section
6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following
legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person, an Adverse Person, or an Affiliate or
Associate of an Acquiring Person or Adverse Person (as such
terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby
may become null and void in the circumstances specified in
section 7(e) of such Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its President or any
Vice President, either manually or by facsimile signature, and
shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such officer
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of the Company; and any Rights Certificate may be signed on
behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although
at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration
and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4 (b) Section 7(e)
and Section 14 of this Agreement, at any time after the close of
business on the Distribution Date, and at or prior to the close
of business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-hundredths
of a share of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash or other assets, as the case
may be) as the Rights Certificate or Certificates surrendered
then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged
at the principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4 (b), Section 7 (e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a
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Rights Certificate or Rights Certificates, as the case may be, as
so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder
of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without
limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in
whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices
of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total
number of one one-hundredths of a share of Preferred Stock (or
other securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior
to the earlier of (i) the close of business on February 13, 2007
(the "Final Expiration Date"), or (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the earlier
of (i) and (ii) being referred to in this Agreement as the
"Expiration Date").
(b) The Purchase Price for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right
shall initially be $160, and shall be subject to adjustment from
time to time as provided in Section 11 and Section 13(a) hereof
and shall be payable in accordance with paragraph (c) below.
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(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect
to each Right so exercised, of the Purchase Price per one one-
hundredth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-hundredths
of a share of Preferred Stock to be purchased, and the Company
hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order
of the registered holder of such Rights Certificate. The payment
of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made (x) in cash or by
certified bank check or bank draft payable to the order of the
Company, or (y) at the election of the Company with respect to
all exercisable Rights by delivery of a certificate or
certificates (with appropriate stock powers executed in blank
attached thereto) evidencing a number of shares of Common Stock
equal to the then Purchase Price divided by the closing price (as
determined pursuant to Section 11(d) hereof) per share of Common
Stock on the Trading Date immediately preceding the date of such
exercise or (z) in the event the Company permits payment with
shares of Common Stock, a combination thereof. In the event that
the Company is obligated to issue other securities (including
Common Stock) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make
all arrangements necessary so that such other securities, cash
-11-
and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the
right to require prior to the occurrence of a Triggering Event
that, upon the exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be
issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11
Event, any Rights beneficially owned by (i) an Acquiring Person,
an Adverse Person, or an Associate or Affiliate of an Acquiring
Person or Adverse Person, (ii) a transferee of an Acquiring
Person or Adverse Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person or Adverse
Person becomes such, or (iii) a transferee of an Acquiring Person
or Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to
holders of equity interests in such Acquiring Person or Adverse
Person or to any Person with whom the Acquiring Person or Adverse
Person has any continuing agreement, agreement or understanding
regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a
plan, arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become null
and void without any further action and no holder of such Rights
shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The
Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to
make any determinations with respect to any Acquiring Person,
Adverse Person, or any of their respective Affiliates, Associates
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
-12-
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the company or
any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by
it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Rights
Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of
Common Stock and/or other securities) or out of its authorized
and issued shares of Preferred Stock (and, following the
occurrence of a Triggering Event, out of its authorized and
issued shares of Common Stock and/or other securities) held in
its treasury, the number of shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) that, as provided in this Agreement
including Section 11(a) (iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) If and for so long as the shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) issuable and deliverable upon the
exercise of the Rights may be listed on any national securities
exchange or traded on The NASDAQ Stock Market, the Company shall
use its best efforts to cause, from and after such time as the
Rights become exercisable (but only to the extent that it is
-13-
reasonably likely that the Rights will be exercised) all shares
reserved for such issuance to be listed on such exchange or
qualified for trading on such system upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first
occurrence of a Section 11 Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been
determined pursuant to this Agreement (including in accordance
with Section 11(a)(iii) hereof), a registration statement under
the Securities Act of 1933 (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the Expiration
Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities
or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. In addition, if the Company shall determine that a
registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement has been
declared effective. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction if the requisite qualification in such
jurisdiction shall have been obtained or the exercise thereof
shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-
hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
-14-
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Rights Certificates and of any certificates
for a number of one one-hundredths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Rights Certificates to a Person
other than, or the issuance or delivery of a number of one one-
hundredths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in respect of a name other
than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver
any certificates for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the
case may be) in a name other than that of the registered holder
upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is
due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each person in whose name
any certificate for a number of one one-hundredths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of Preferred Stock
(or Common Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the
Rights Certificate evidencing such Rights was duly surrendered and payment
of the Purchase Price (and all applicable transfer taxes) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date
upon which the Preferred stock (or Common Stock and/or other securities, as
the case may be) transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares (fractional
or otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a shareholder of
the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
-15-
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares,
or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of
Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall
be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books
of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If
an event occurs which would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a) (i) shall be
in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after
the date of this Agreement, directly or indirectly, (1)
shall merge into the Company or otherwise combine with
the Company or any Subsidiary of the Company and the
Company or such Subsidiary shall be the continuing or
surviving corporation of such merger or combination and
the Common Stock of the Company shall remain
outstanding and unchanged, or (2) shall engage in a
transaction or a series of transactions with the
-16-
Company or any of its subsidiaries upon terms which a
majority of the Continuing Directors serving at the
time of such transaction or transactions deem to be
less favorable to the Company than the Company would be
able to obtain in arm's-length negotiation with an
unaffiliated third party, or
(B) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such
plan), alone or together with its Affiliates and
Associates, shall, at any time after the Rights
Dividend Declaration Date, become the Beneficial Owner
of 15% or more of the shares of Common Stock then
outstanding, unless the event causing the 15% threshold
to be crossed is a transaction set forth in
Section 13(a) hereof, or is an acquisition of shares of
Common Stock pursuant to a tender offer or exchange
offer for all outstanding shares of Common Stock at a
price and on terms determined by at least a majority of
the Continuing Directors who are not officers of the
Company to be (a) at a price which is fair to
shareholders (taking into account all factors which
such members of the Board deem relevant including,
without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and
(b) otherwise in the best interests of the Company and
its shareholders, or
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of
securities (including any reverse stock split), or
recapitalization of the Company, or any merger or
consolidation of the Company with any of its
Subsidiaries or any other transaction or series of
transactions involving the Company or any of its
Subsidiaries (whether or not with or into or otherwise
involving an Acquiring Person), other than a
transaction or transactions to which the provisions of
Section 13(a) apply, which has the effect, directly or
indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any
class of equity securities of the Company or any of its
Subsidiaries which is directly or indirectly
beneficially owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person, or
-17-
(D) the Board of Directors of the Company shall
declare any Person to be an Adverse Person, upon a
determination that such Person, alone or together with
its Affiliates and Associates, has, at any time after
this Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a filing under the
Exchange Act, become the Beneficial Owner of a number
of shares of Common Stock which the Board of Directors
of the Company determines to be substantial (which
number of shares shall in no event represent less than
10% of the outstanding shares of Common Stock) and a
determination by the Board of Directors of the Company,
after reasonable inquiry and investigation, including
consultation with such persons as such directors shall
deem appropriate and consideration of such factors as
are permitted by applicable law, that (a) such
Beneficial Ownership by such Person is intended to
cause the Company to repurchase the shares of Common
Stock beneficially owned by such Person or to cause
pressure on the Company to take action or enter into a
transaction or series of transactions intended to
provide such Person with short-term financial gain
under circumstances where the Board of Directors
determines that the best long-term interests of the
Company would not be served by taking such action or
entering into such transaction or series of
transactions at that time or (b) such Beneficial
Ownership is causing or reasonably likely to cause a
material adverse impact (including, but not limited to,
impairment of the Company's ability to maintain its
competitive position) on the business or prospects of
the Company,
then, promptly following the occurrence of any event
described in Section 11(a)(ii)(A), (B), (C) or (D) hereof,
proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e) hereof)
shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of one
one-hundredths of a share of Preferred Stock, such number of
shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase
Price by the then number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11
Event, and (y) dividing that product (which product,
following such first occurrence, shall thereafter be
-18-
referred to as the "Purchase Price" for each Right and for
all purposes of this Agreement) by 50% of the Current Market
Price per share of Common Stock on the date of such first
occurrence (such number of shares, the "Adjustment Shares");
PROVIDED that the Purchase Price and the number of
Adjustment Shares shall be further adjusted as provided in
this Agreement to reflect any events occurring after the
date of such first occurrence.
(iii) In the event that the number of shares of Common
Stock which is authorized by the Company's Restated Articles
of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights
is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of
this Section 11(a), the Company shall: (A) determine the
excess of (1) the value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value") over (2)
the Purchase Price (such excess, the "Spread"), and (B) with
respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon exercise of the Rights, (1)
cash, (2) a reduction in the Purchase Price, (3) Common
Stock or other equity securities of the Company (including,
without limitation, shares or units of shares of preferred
stock which the Board of Directors of the Company has deemed
to have the same value as shares of Common Stock (such
shares or units of shares of preferred stock are herein
called "common stock equivalents"), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of
an expert selected by the Board of Directors of the Company;
PROVIDED, HOWEVER, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the
first occurrence of a Section 11 Event and (y) the date on
which the Company's right of redemption pursuant to Section
23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the
Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise
-19-
in full of the Rights, the thirty (30) day period set forth
above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a) (ii) Trigger
Date, in order that the Company may seek shareholder
approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or
second sentences of this Section 11 (a) (iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a
public announcement stating that the exercisability, of the
Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11 (a) (iii), the
value of the Common Stock shall be the Current Market Price
per share of the Common Stock on the Section 11 (a) (ii)
Trigger Date and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common Stock
on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such
record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per
share of Preferred Stock or per share of equivalent preferred
stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock)
less than the Current Market Price per share of Preferred Stock
on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number
of shares of Preferred Stock which the aggregate offering price
of the total number of shares of Preferred Stock and/or
equivalent preferred stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be
-20-
offered) would purchase at such Current Market Price, and the
denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or equivalent preferred
stock to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Preferred Stock
owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed, and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred
Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the Current Market Price per share of Preferred Stock on such
record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights
or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such Current Market Price per share
of Preferred Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted
to be the Purchase Price which would have been in effect if such
record date had not been fixed.
-21-
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the "Current Market Price" per share of Common Stock
on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the thirty
(30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a) (iii) hereof,
the "Current Market Price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date;
PROVIDED, HOWEVER, that in the event that the Current Market
Price per share of the Common Stock is determined during a
period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such
Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock
(other than the Rights), or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, after the ex-
dividend date for such dividend or distribution, or the
record date for such subdivision, combination or
reclassification, then, and in each such case, the "Current
Market Price" shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to
trading or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, the
last sale price or, in case no such sale takes place on such
day, the average of the high bid and low asked price
quotations reported on such day, as reported by The NASDAQ
Stock Market ("NASDAQ") or such other system then in use,
or, if on any such date the shares of Common Stock are not
quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market
maker making a market in the Common Stock selected by the
Board of Directors of the Company. If on any such date no
market maker is making a market in the Common Stock, the
fair value of such shares on such date as determined in good
faith by the Board of Directors of the Company shall be
-22-
used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is
not publicly held or not so listed or traded, "Current
Market Price" per share shall mean the fair value per share
as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the
Common Stock in clause (i) of this Section 11(d) (other than
the last sentence thereof). If the Current Market Price per
share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly
held or listed or traded in a manner described in clause (i)
of this Section 11(d), the "Current Market Price" per share
of Preferred Stock shall be conclusively deemed to be an
amount equal to 100 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends
and recapitalization with respect to the Common Stock
occurring after the date of this Agreement) multiplied by
the Current Market Price per share of the Common Stock. If
neither the Common Stock nor the Preferred Stock is publicly
held or so listed or traded, "Current Market Price" per
share of the Preferred Stock shall mean the fair value per
share as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this
Agreement, the "Current Market Price" of one one-hundredths
of a share of Preferred Stock shall be equal to the "Current
Market Price" of one share of Preferred Stock divided by
100.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in 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
-23-
nearest ten-thousandth of a share of Common Stock or other share
or one-millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the provisions of sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the purchase hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number
of one one-hundredths of a share of Preferred Stock purchasable
from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of one one-hundredths
of a share of Preferred Stock (calculated to the nearest one-
millionth) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in lieu of any adjustment in the number of one one-hundredths of
a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one
-24-
one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued,
shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and counter-signed in
the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-hundredth of a
share and the number of one one-hundredths of a share which were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then-stated value, if any,
of the number of one one-hundredths of a share of Preferred Stock
issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable such number of one one-hundredths of
a share of Preferred Stock at such adjusted Purchase Price.
-25-
(1) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of one one-
hundredths of a share of Preferred Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise
over and above the number of one one-hundredths of a share of
Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due xxxx
or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in their good faith judgment the Board of Directors
of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less
than the Current Market Price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to
such shareholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or
-26-
other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation,
merger or sale, the shareholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 26 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator which shall be
the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event.
(q) The failure of the Board of Directors to declare a
Person to be an Adverse Person following such Person becoming
the Beneficial Owner of shares of Common Stock representing 10%
or more of the outstanding shares of Common Stock shall not imply
that such Person is not an Adverse Person or limit the Board of
Directors' right at any time in the future to declare such Person
to be an Adverse Person.
-27-
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 and
Section 13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a
Rights Certificate (or, if prior to the Distribution Date, to each holder
of a certificate representing shares of Common Stock) in accordance with
Section 25 hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof),
then, and in each such case (except as may be contemplated by
Section 13(d) hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely
tradable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the
-28-
then-current Purchase Price by the number of one one-hundredths
of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11 Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such
one one-hundredths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11 Event
by the Purchase Price in effect immediately prior to such first
occurrence), and (2) dividing that product (which, following the
first occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d)(i) hereof) per share of the Common
Stock of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such
merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that
is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
-29-
PROVIDED, HOWEVER, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market
value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued
or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of
this Section 13 and further providing that, as soon as
practicable after the date of any Section 13 Event, the Principal
Party will
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Act) until the Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
The foregoing provisions set forth in this Section 13 shall
similarly apply to successive mergers or consolidations or sales
or other transfers. In the event that a Section 13 Event shall
occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section
13(a).
-30-
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons who
acquired shares of Common Stock pursuant to a tender offer or
exchange offer for all outstanding shares of Common Stock which
complies with the provisions of Section 11(a)(ii)(B) hereof (or a
wholly owned subsidiary of any such Person or Persons), (ii) the
price per share of Common Stock offered in such transaction is
not less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased
pursuant to such tender offer or exchange offer, and (iii) the
form of consideration being offered to the remaining holders of
shares of Common Stock pursuant to such transaction is the same
as the form of consideration paid pursuant to such tender offer
or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall
expire.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the 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
-31-
Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred
Stock) upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-
hundredth of a share of Preferred Stock, the Company may pay to
the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one one-
hundredth of a share of Preferred Stock. For purposes of this
Section 14(b), the current market value of one one-hundredth of a
share of Preferred Stock shall be one one-hundredth of the
closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock.
In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one (1) share
of Common Stock. For purposes of this Section 14(c), the current
market value of one share of Common Stock shall be the closing
price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock),
-32-
without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy
at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any Person
subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent
if surrendered at the principal office or offices of the Rights
Agent designated for such purposes, duly endorsed or accompanied
by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall
be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
-33-
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; PROVIDED, HOWEVER, the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
one one-hundredths of a share of Preferred Stock or any other securities of
the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 24 hereof),
or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the
premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
-34-
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto;
PROVIDED, HOWEVER, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name
of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such
-35-
counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of any Acquiring Person or Adverse Person and the
determination of "Current Market Price") be proved or established
by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify
the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11 or Section 13 hereof
or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual
notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock or
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Preferred Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer
or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; PROVIDED, HOWEVER,
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
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(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof,
the Rights Agent shall not take any further action with respect
to such requested exercise of transfer without first consulting
with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock and Preferred
Stock, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Stock and Preferred Stock, by
registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation
organized and doing business under the laws of the United States or of the
State of New York or Michigan (or of any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the State of New York or Michigan), in good standing, having
a principal office in the State of New York or Michigan, which is
authorized under such laws to exercise corporate trust 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 $10,000,000. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of
any such appointment, the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common Stock
and the Preferred Stock, and mail a notice thereof in writing to the
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registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class
of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration
of the Rights, the Company (a) shall, with respect to shares of Common
Stock so issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in
any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
PROVIDED, HOWEVER, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if,
and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of
business on the tenth day following the Stock Acquisition Date
(or, if the Stock Acquisition Date shall have occurred prior to
the Record Date, the close of business on the tenth day following
the Record Date), or (ii) the Final Expiration Date, cause the
Company to redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, as such amount
may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the
"Redemption Price") and the Company may, at its option, pay the
Redemption Price either in shares of Common Stock (based on the
"Current Market Price," as defined in Section 11(d)(i) hereof, of
the shares of Common Stock at the time of redemption) or cash or
such other consideration as the Board of Directors may determine;
PROVIDED, HOWEVER, if the Board of Directors of the Company
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authorizes redemption of the Rights in either of the
circumstances set forth in clauses (i) and (ii) below, then there
must be Continuing Directors then in office and such
authorization shall require the concurrence of a majority of such
Continuing Directors: (i) such authorization occurs on or after
the time a Person becomes an Acquiring Person, or (ii) such
authorization occurs on or after the date of a change (resulting
from a proxy or consent solicitation) in a majority of the
directors in office at the commencement of such solicitation if
any Person who is a participant in such solicitation has stated
(or, if upon the commencement of such solicitation, a majority of
the Board of Directors of the Company has determined in good
faith) that such Person (or any of its Affiliates or Associates)
intends to take, or may consider taking, any action which would
result in such Person becoming an Acquiring Person or which would
cause the occurrence of a Triggering Event unless, concurrent
with such solicitation, such Person (or one or more of its
Affiliates or Associates) is making a cash tender offer pursuant
to a Schedule 14D-1 (or any successor form) filed with the
Securities and Exchange Commission for all outstanding shares of
Common Stock not beneficially owned by such Person (or by its
Affiliates or Associates). If, following the occurrence of a
Stock Acquisition Date and following the expiration of the right
of redemption hereunder but prior to any Triggering Event, (i)
each Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one
transaction or series of transactions, not directly or indirectly
involving the Company or any of its subsidiaries, which did not
result in the occurrence of a Triggering Event such that each
such Person is thereafter a Beneficial Owner of 10% or less of
the outstanding shares of Common Stock, and (ii) there are no
other Persons, immediately following the occurrence of the event
described in clause (i) of this provision, who are Acquiring
Persons or Adverse Persons, then the right of redemption set
forth in the preceding sentence shall be reinstated and
thereafter be subject to the provisions of this Section 23. The
Board of Directors may not redeem any Rights following a
determination pursuant to Section 11(a)(ii)(D) that any Person is
an Adverse Person. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until
such time as the Company's right of redemption set forth in the
first sentence of this Section 23(a) has expired.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the
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Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the company
shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be
made.
SECTION 24. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than
a regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
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Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least twenty (20) days prior to the record date
for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking
of such proposed action or the date of participation therein by
the holders of the shares of Preferred Stock whichever shall be
the earlier.
(b) In case any Section 11 Event shall occur, then, in any
such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a
notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter
to refer to Common Stock and/or, if appropriate, other
securities.
SECTION 25. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Old Kent Financial Corporation
Xxx Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Old Kent Bank
Xxx Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Operations
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
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shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the Company.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the
Company may and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of
any holders of certificates representing shares of Common Stock. From and
after the Distribution Date and subject to the penultimate sentence of this
Section 26, the Company may and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder (which lengthening or shortening,
following the first occurrence of an event set forth in clauses (i) and
(ii) of the first provision to Section 23(a) hereof, shall be effective
only if there are Continuing Directors and shall require the concurrence of
a majority of such Continuing Directors), or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary
or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person, an Adverse
Person, or an Affiliate or Associate of an Acquiring Person or Adverse
Person); PROVIDED, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are
not then redeemable, or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights (other than any Acquiring
Person, Adverse Person, and their respective Affiliates and Associates).
Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price, the Final Expiration Date, the Purchase
Price or the number of one one-hundredths of a share of Preferred Stock for
which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
SECTION 27. 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 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. For all purposes of this Agreement, any calculation of the number of
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shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial owner shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board of
Directors of the Company (with, where specifically provided for herein, the
concurrence of the Continuing Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board (with, where specifically provided
for herein, the concurrence of the Continuing Directors) or to the Company,
or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or
to amend the Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the
Board (with, where specifically provided for herein, the concurrence of the
Continuing Directors) in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board or the Continuing Directors to
any liability to the holders of the Rights.
SECTION 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 Rights Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock).
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; PROVIDED, HOWEVER, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the right
of redemption set forth in Section 23 hereof shall be reinstated and shall
not expire until the close of business on the tenth day following the date
of such determination by the Board of Directors.
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SECTION 31. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Michigan and for all purposes shall be
governed by and construed in accordance with the laws of such state
applicable to contracts made and to be performed entirely within such
state.
SECTION 32. 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 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
Attest: OLD KENT FINANCIAL CORPORATION
______________________________ By______________________________________
Its_________________________________
Attest: OLD KENT BANK
______________________________ By______________________________________
Its_________________________________
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FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES C PREFERRED STOCK
OF
OLD KENT FINANCIAL CORPORATION
Pursuant to Section 302 of the
Michigan Business Corporation Act
We, Xxxxx X. Xxxxxx, Chairman of the Board, President and Chief
Executive Officer, and X.X. Xxxxxxxx III, Vice Chairman of the Board and
Treasurer, of Old Kent Financial Corporation, a corporation organized and
existing under the Michigan Business Corporation Act, in accordance with
the provisions of Section 302 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Restated Articles of Incorporation, the Board of Directors
on January 20, 1997, adopted the following resolution creating a series of
1,000,000 shares of Preferred Stock designated as Series C Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Restated Articles of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and
amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such
series, and the qualifications, limitations, or restrictions thereof are as
follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series C Preferred Stock" and the number of shares
constituting such series shall be 1,000,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the prior and superior rights of the holders
of any shares of any series of preferred stock ranking prior and
superior to the shares of Series C Preferred Stock, holders of
shares of Series C Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in
cash on the fifteenth day of March, June, September, and December
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 C Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the
greater of (a) $34, or (b) subject to the provision for
adjustment hereinafter set forth, one hundred times the aggregate
per share amount of all cash dividends, and one hundred 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 $1.00 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 C Preferred Stock. In the event
the Corporation shall at any time after January 20, 1997 (the
"Rights Declaration Date"), (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
amount to which holders of shares of Series C Preferred Stock
were entitled immediately prior to such event under clause (b) of
the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in
paragraph (a) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable
in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $34 per share on the Series C Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares of Series C 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 C Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment
-2-
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 C 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 C Preferred
Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than thirty
days prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. Each share of Series C Preferred Stock
shall entitle the holder thereof to one (1) vote on all matters submitted
to a vote of the shareholders of the Corporation. Except as otherwise
provided by law, the holders of shares of Series C Preferred Stock and the
holders of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of shareholders of the Corporation. Except as
set forth herein, holders of Series C Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set forth herein)
for taking any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series C 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 C 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 C 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 C Preferred Stock, except
dividends paid ratably on the Series C 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;
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(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series C Preferred Stock, provided that
the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series C Preferred Stock;
(iv) purchase or otherwise acquire for consideration
any shares of Series C Preferred Stock, or any shares of
stock ranking on a parity with the Series C Preferred Stock,
except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the corporation unless the Corporation
could, under paragraph (a) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series C Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of preferred stock and may be reissued as part of a new series of
preferred stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series C Preferred Stock unless, prior
thereto, the holders of shares of Series C Preferred Stock shall
have received an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (i) $450 per
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share, or (ii) an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to one
hundred times the aggregate amount to be distributed per share to
holders of shares of Common Stock (the "Series C Liquidation
Preference"). All such preferential amounts shall be paid or set
aside for payment before the payment or setting aside for payment
of any amount for, or the distribution of any assets of the
Corporation to, the holders of shares of any class or series of
stock ranking junior to Series C Preferred Stock as to assets of
the Corporation.
(b) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series C
Liquidation Preference and the liquidation preferences of all
other series of preferred stock that may be outstanding, if any,
then such remaining assets shall be distributed ratably to the
holders of all such shares of preferred stock (including Series C
Preferred Stock) in proportion to the full preferential amount to
which each such share shall be entitled.
(c) In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
aggregate amount to which holders of shares of Series C Preferred
Stock were entitled immediately prior to such event under clause
(ii) of Section 6(a) above shall be adjusted by multiplying such
by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series C Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to one hundred times the aggregate
amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of
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Series C Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. NO REDEMPTION. The shares of Series C Preferred Stock
shall not be redeemable.
Section 9. RANKING. The Series C Preferred Stock shall rank junior
to all other series of the Corporation's preferred stock as to the payment
of dividends and the distribution of assets, unless the terms of any such
series shall provide otherwise.
Section 10. AMENDMENT. The Restated Articles of Incorporation of the
Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series C Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
shares of Series C Preferred Stock, voting separately as a class; PROVIDED,
HOWEVER, that at any time that there are no outstanding shares of Series C
Preferred Stock and no outstanding rights, warrants, or options to acquire
shares of Series C Preferred Stock, the Board of Directors may amend the
powers, preferences, and rights of the Series C Preferred Stock or convert
such shares of Series C Preferred Stock into authorized but unissued shares
of preferred stock which may be reissued as part of a new series of
preferred stock in accordance with the provisions of the Restated Articles
of Incorporation.
Section 11. FRACTIONAL SHARES. Series C Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series C Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of
perjury as of the 20th day of January, 1997.
________________________________________
Xxxxx X. Xxxxxx
Chairman of the Board,
President and Chief
Executive Officer
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________________________________________
X.X. Xxxxxxxx III
Vice Chairman of the Board
and Treasurer
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EXHIBIT B
[Form of Rights Certificate]*
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER FEBRUARY 13, 2007, OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $. 01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED
BY AN ACQUIRING PERSON, AN ADVERSE PERSON, OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON OR
ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS WAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR ADVERSE
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]*
Rights Certificate
OLD KENT FINANCIAL CORPORATION
This certifies that ________________________________, or
registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of
January 20, 1997 (the "Rights Agreement"), between OLD KENT FINANCIAL
CORPORATION, a Michigan corporation (the "Company"), and OLD KENT BANK, a
Michigan banking corporation (the "Rights Agent"), to purchase from the
Company at any time prior to 5 p.m. (Grand Rapids, Michigan time) on
February 13, 2007, at the office or offices of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one one-hundredth of a
fully paid, non-assessable share of Series C Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $160 per one
______________________________
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
one-hundredth of a share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase
set forth on the reverse hereof and the Certificate contained therein duly
executed. The Purchase Price shall be paid in cash or, if the Company so
permits, shares of Common Stock of the Company having an equivalent value
or, if the Company has permitted payment with shares of Common Stock, a
combination of cash and shares of Common Stock. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price
per share set forth above, are the number and Purchase Price as of
____________, based on the Preferred Stock as constituted at such date.
The Company reserves the right to require prior to the occurrence of a
Triggering Event that, upon the exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.
Upon the occurrence of a Section 11 Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person, an Adverse
Person, or an Affiliate or Associate of any such Acquiring Person or
Adverse Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Adverse Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, concurrently with or after such
transfer, became an Acquiring Person, an Adverse Person, or an Affiliate or
Associate of an Acquiring Person or Adverse Person, such Rights shall
become null and void and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11 Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening
of certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are incorporated into this Rights Certificate by reference
and made a part hereof and to which Rights Agreement reference is made for
a full description of the rights, limitations of rights, obligations,
duties and immunities of the Rights Agent, the Company and the holders of
the Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Company and are
also available upon written request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights Agent
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designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-
hundredths of a share of Preferred Stock as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per Right, payable, at the option of the
Company, in cash, shares of Common Stock or such other consideration as the
Board of Directors may determine, at any time prior to the earlier of the
close of business on (i) the tenth day following the Stock Acquisition Date
(as such time period may be extended or shortened pursuant to the Rights
Agreement) and (ii) the Final Expiration Date. Under certain circumstances
set forth in the Rights Agreement, the decision to redeem shall require the
concurrence of a majority of the Continuing Directors. The Rights may not
be redeemed following a designation of an Adverse Person under the
provisions of the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-hundredth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. As provided above, the Company reserves
the right to require prior to the occurrence of a Trigger Event that, upon
the exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock would be issued.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or in this Rights Certificate be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
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WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ______________.
ATTEST: OLD KENT FINANCIAL CORPORATION
______________________________ By______________________________________
Secretary Its_________________________________
Countersigned:
OLD KENT BANK
By______________________________________
Its_________________________________
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[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desire to transfer the Rights Certificate.)
FOR VALUE RECEIVED_________________________________________________________
hereby sells, assigns and transfers unto __________________________________
___________________________________________________________________________
(Please print name and address of transferee)
___________________________________________________________________________
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint _______________
_____________ Attorney, to transfer the within Rights Certificate on the
books of the within-named Company, with full power of substitution.
Dated: _______________ ___________________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring
Person, an Adverse Person, or an Affiliate or Associate of any such
Acquiring Person or Adverse Person (as such terms are defined pursuant to
the Rights agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person, an Adverse Person, or an Affiliate or Associate of an Acquiring
Person or Adverse Person.
Dated: ______________ ___________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: OLD KENT FINANCIAL CORPORATION
The undersigned hereby irrevocably elects to exercise ___________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares
be issued in the name of and delivered to:
Please insert social security
or other identifying number:
___________________________________________________________________________
(Please print name and address)
___________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
___________________________________________________________________________
(Please print name and address)
___________________________________________________________________________
___________________________________________________________________________
Dated:_________________ ___________________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that: (1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was
an Acquiring Person, an Adverse Person, or an Affiliate or Associate of any
such Acquiring Person or Adverse Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person, an
Adverse Person, or an Affiliate or Associate of an Acquiring Person or
Adverse Person.
Dated: ________________ ________________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
SUMMARY OF RIGHTS TO PURCHASE EXHIBIT C
SERIES C PREFERRED STOCK
The Board of Directors of Old Kent Financial Corporation (the
"Company") has approved a new Series C Preferred Stock Purchase Rights
Plan, and elected to redeem the Rights previously issued under the plan
enacted in 1989. Under the new plan, one Series C Preferred Stock Purchase
Right will attach to each share of common stock, $1.00 par value (the
"Common Stock"), of the Company outstanding on February 14, 1997. Each
Right entitles the registered holder to purchase from the Company one one-
hundredth of a share (a "Unit") of Series C Preferred Stock, no par value
(the "Preferred Stock"), at a price of $160 per Unit (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and Old Kent 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
acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of Common Stock (such person being referred
to as an "Acquiring Person" and the date upon which such person becomes an
Acquiring Person being referred to as the "Stock Acquisition Date"), (ii)
10 business days following the commencement or announcement of an intention
to commence a tender or exchange offer, the consummation of which would
result in beneficial ownership by a person of 15% or more of the
outstanding shares of Common Stock, or (iii) 10 business days after the
Company's Board of Directors determines, pursuant to certain criteria set
forth in the Rights Agreement, that a person beneficially owning 10% or
more of the outstanding shares of Common Stock is an "Adverse Person" (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 February 14, 1997, by such Common Stock certificates.
The Rights Agreement provides that, until the Distribution Date, the Rights
shall be transferred with and only with such Common Stock certificates.
New Common Stock certificates issued after February 14, 1997, but prior to
the Distribution Date (or if earlier, the redemption or expiration of the
Rights), will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or, if earlier, the redemption or
expiration of the Rights), the surrender for transfer of any certificates
for Common Stock shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. As soon
as practicable following the Distribution Date, separate certificates
evidencing the Rights (the "Rights 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 Rights Certificates alone will evidence
the Rights. Except as otherwise determined by the Board of Directors, only
shares of Common Stock issued prior to the Distribution Date will be issued
with Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on February 13, 2007, unless earlier redeemed by the
Company as described below.
The Purchase Price payable, and the number of one one-hundredths
of a share 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 Preferred Stock or convertible securities at less than the
current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends out of earnings or retained
earnings at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid or dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock (other
than fractions which are integral multiples of one one-hundredth of a share
of Preferred Stock) will be issued and in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the
last trading date prior to the date of exercise.
In the event that, any time following the Stock Acquisition Date,
the Company were acquired in a merger or other business combination
transaction or in the event 50% or more of its assets or earning power were
sold, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock
of the acquiring company which at the time of such transaction would have a
market value of two times the exercise price of the Right. Alternatively,
in the event that, any time following the Distribution Date, the Company
were the surviving corporation in a merger with an Acquiring Person and its
Common Stock was not changed or exchanged, or an Acquiring Person were to
engage in self-dealing transactions with the Company deemed unfair by the
Board of Directors, or an Acquiring Person becomes the beneficial owner of
more than 15% of the then outstanding shares of Common Stock, or a person
had been or was designated as an Adverse Person by the Company's Board of
Directors in accordance with the criteria set forth in the Rights
Agreement, proper provision shall be made so that each holder of a Right,
other than the Acquiring Person, Adverse Person and certain related parties
(whose Rights will thereafter be 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 such Right.
-2-
At any time prior to the designation of a person as an Adverse
Person under the Rights Plan or the close of business on the 10th day after
the Stock Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price"). Under
certain circumstances set forth in the Rights Agreement, the decision to
redeem shall require the concurrence of a majority of the Continuing
Directors, which is defined to mean any member of the Board of Directors
who was a member of the Board prior to the date of the Rights Agreement,
and any person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing Directors.
Continuing Directors do not include an Acquiring Person, an Adverse Person
or an affiliate or associate of an Acquiring Person or Adverse Person, or
any representative of the foregoing entities. Immediately upon the action
of the Board of Directors of the Company electing to redeem the Rights, the
Company shall make announcement thereof, and upon such election, the right
to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price. In certain circumstances
the redemption period may be reinstated following its expiration.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to shareholders or to the
Company, shareholders will recognize taxable income if the Rights are
redeemed and may, depending on the circumstances, recognize taxable income
when the Rights become exercisable or are exercised.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement
may be amended by the Board (in certain circumstances, with the concurrence
of the Continuing Directors) in order to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or Adverse Person), or to
shorten or lengthen any time period under the Rights Agreement, except that
no amendment to adjust the time period governing redemption may be made at
a time when the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A. A copy of the Rights Agreement is available from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
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