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X.X. Xxxxxxxx, Inc.
and
BankBoston, N.A.,
Rights Agent
Rights Agreement
Dated as of April 28, 1999
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions ................................................. 1
Section 2. Appointment of Rights Agent ......................................... 5
Section 3. Issue of Right Certificates ......................................... 5
Section 4. Form of Right Certificates .......................................... 6
Section 5. Countersignature and Registration ................................... 7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates ........... 7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights ....... 8
Section 8. Cancellation and Destruction of Right Certificates .................. 9
Section 9. Availability of Preferred Shares .................................... 9
Section 10. Preferred Shares Record Date ....................................... 9
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights . 10
Section 12. Certificate of Adjusted Purchase Price or Number of Shares ......... 16
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power 16
Section 14. Fractional Rights and Fractional Shares ............................ 17
Section 15. Rights of Action ................................................... 18
Section 16. Agreement of Right Holders ......................................... 18
Section 17. Right Certificate Holder Not Deemed a Shareholder .................. 19
Section 18. Concerning the Rights Agent ........................................ 19
Section 19. Merger or Consolidation or Change of Name of Rights Agent .......... 19
Section 20. Duties of Rights Agent ............................................. 20
Section 21. Change of Rights Agent ............................................. 21
Section 22. Issuance of New Right Certificates ................................. 22
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Section 23. Redemption ......................................................... 22
Section 24. Exchange ........................................................... 23
Section 25. Notice of Certain Events ........................................... 24
Section 26. Notices ............................................................ 25
Section 27. Supplements and Amendments ......................................... 26
Section 28. Successors ......................................................... 26
Section 29. Determinations and Actions by the Board of Directors ............... 26
Section 30. Benefits of this Agreement ......................................... 26
Section 31. Severability ....................................................... 27
Section 32. Governing Law ...................................................... 27
Section 33. Counterparts ....................................................... 27
Section 34. Descriptive Headings ............................................... 27
Exhibit A Form of Resolution Fixing and Determining the Terms of the
Series A-1999 Junior Participating Preferred Stock
Exhibit B Right Certificate
Exhibit C Summary of Rights to Purchase Preferred Shares
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RIGHTS AGREEMENT
Rights Agreement dated April 28, 1999 (the "Agreement") between X.X.
Xxxxxxxx, Inc., an Illinois corporation (the "Company"), and BankBoston, N.A., a
national banking association (the "Rights Agent").
WHEREAS, on April 28, 1999, the Board of Directors (as defined below)
of the Company has authorized and declared a dividend of one preferred share
purchase right (a "Right") for each outstanding Common Share (as defined below),
each Right representing the right to purchase one one-hundredth of a Preferred
Share (as defined below), payable on May 15, 1999 to shareholders of record at
the Close of Business on May 10, 1999 (the "Record Date"), upon the terms and
subject to the conditions herein and has further authorized and directed the
issuance of one Right (as such number may be adjusted pursuant to the terms of
the Rights Agreement) with respect to each Common Share that shall become
outstanding between the Record Date, and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are defined
below).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as defined herein)
who or which, together with all Affiliates and Associates (as such terms are
defined herein) of such Person, shall be the Beneficial Owner (as defined
herein) of 15% or more of the Common Shares then outstanding, but shall not
include any Exempt Person or any Excluded Entity (as such terms are defined
herein). Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of (i) an acquisition of Common Shares by the Company
which, by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the Common
Shares then outstanding; provided, however, that if a Person (other than an
Exempt Person) shall become the Beneficial Owner of 15% or more of the Common
Shares then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner of an
additional 0.25% of the Common Shares then outstanding, then such Person shall
be deemed to be an "Acquiring Person"; or (ii) the acquisition of Beneficial
Ownership of 15% or more of the Common Shares then outstanding in the good faith
belief that such acquisition would not (A) cause such Beneficial Ownership to
exceed 15% of the Common Shares then outstanding and such Person relied in good
faith in computing the percentage of its Beneficial Ownership on publicly filed
reports or documents of the Company which are inaccurate or (B) otherwise cause
a Distribution Date to occur. Notwithstanding clause (ii) of the preceding
sentence, if any Person that is not an Acquiring Person due to such clause (ii)
does not reduce its percentage of Beneficial Ownership of Common Shares to below
15% by 5:00 P.M., New York City time, on the tenth Business Day after notice
(including telephonic or facsimile) from the Company that such Person's
Beneficial Ownership of Common Shares so exceeds 15%, such Person shall, at the
end of such 10-Business Day period, become an Acquiring Person (and such clause
(ii) shall
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no longer apply to such Person); provided that the date of the notice that the
beneficial ownership of Common Shares then outstanding of a Person (subject to
the definition in such clause (ii)) exceeds 15% shall be the first day such
notice is given.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934 (the "Exchange Act"), as in effect on
the date of this Agreement; provided, however, that, for purposes of this
Agreement, no Exempt Person or Excluded Entity shall be deemed to be an
Affiliate or Associate of an Acquiring Person or any other Person.
(c) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than
these Rights), 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 or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (2) is
also not then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, (i) the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder, and (ii) a Person serving as a
trustee or
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executor of a trust or estate which is an Exempt Person shall not be deemed to
be the Beneficial Owner of or to beneficially own the Common Shares held by such
trust or estate.
(d) "Board of Directors" shall mean the Board of Directors of the
Company
(e) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
New York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(g) "Common Shares" when used with reference to the Company shall
mean the shares of common stock, par value $.50 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(i) "Excluded Entity" shall mean the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of any
such plan.
(j) "Exempt Person" shall mean any of the following:
(i) any descendant of X.X. Xxxxxxxx, or any spouse, widow or
widower of any such descendant (such descendants, spouses, widows and
widowers collectively defined as the "Grainger Family Members");
(ii) any descendant of X.X. Xxxxxx, or any spouse, widow or
widower of any such descendant (such descendants, spouses, widows and
widowers collectively defined as the "Xxxxxx Family Members" and with
the Grainger Family Members collectively defined as the "Family
Members");
(iii) any trust which is in existence on the date of this
Agreement and which has been established by one or more Grainger Family
Members, any estate of a Grainger Family Member who died on or before
the date of this Agreement, and The Grainger Foundation (such trusts,
estates and named entity collectively defined as the "Grainger Family
Entities");
(iv) any trust which is in existence on the date of this
Agreement and which has been established by one or more Slavik Family
Members, any estate of a Slavik Family Member who died on or before the
date of this Agreement, Xxxx XX Properties, Inc., and Mountain Capital
Corporation (such trusts, estates and named entities collectively
defined as the "Xxxxxx Family Entities" and with the Grainger Family
Entities collectively defined as the "Existing Family Entities");
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(v) any estate of a Family Member who dies after the date
hereof, or any trust established after the date hereof by one or more
Family Members or Existing Family Entities; provided that one or more
Family Members, Existing Family Entities or charitable organizations
which qualify as exempt organizations under Section 501(c) of the
Internal Revenue Code of 1986, as amended ("Charitable Organizations"),
collectively, are the beneficiaries of at least 50% of the
actuarially-determined beneficial interests in such estate or trust;
(vi) any Charitable Organization which is established by one
or more Family Members or Existing Family Entities (a "Family
Charitable Organization");
(vii) any corporation of which a majority of the voting power
and a majority of the equity interest is held, directly or indirectly,
by or for the benefit of one or more Family Members, Existing Family
Entities, estates or trusts described in clause (v) above, or Family
Charitable Organizations; and
(viii) any partnership or other entity or arrangement of
which a majority of the voting interest and a majority of the economic
interest is held, directly or indirectly, by or for the benefit of one
or more Family Members, Existing Family Entities, estates or trusts
described in clause (v) above, or Family Charitable Organizations.
(k) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(l) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(m) "Preferred Shares" shall mean shares of Series A-1999 Junior
Participating Preferred Stock, par value $5.00 per share, of the Company having
the rights and preferences set forth in the Resolution Fixing and Determining
the Terms of the Preferred Stock, a copy of which is attached to this Agreement
as Exhibit A.
(n) "Redemption Date" shall have the meaning set forth in Section
7 hereof.
(o) "Shares Acquisition Date" shall mean the first date of public
announcement (including, without limitation, the filing of a report with the
Securities and Exchange Commission) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(p) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
(q) "Transferee" shall mean any Person who or which shall acquire
the beneficial ownership of any Common Shares from any Person who or which has
become an Acquiring Person or an Acquiring Person's Affiliate or Associate, but
shall not include any Exempt Person or any Excluded Entity.
(r) "Voting Stock" shall mean (i) the Common Shares and (ii) any
other shares of capital stock of the Company entitled to vote generally in the
election of directors or entitled to
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vote together with the Common Shares in respect of any merger, consolidation,
sale of all or substantially all of the Company's assets, liquidation,
dissolution or winding up. Whenever any provision of this Agreement requires a
determination of whether a number of shares of Voting Stock comprising a
specified percentage of such Voting Stock has been voted, tendered, acquired,
sold or otherwise disposed of or a determination of whether a Person has offered
or proposed to acquire a number of shares of Voting Stock comprising such
specified percentage, the number of shares of Voting Stock comprising such
specified percentage of Voting Stock shall in every such case be deemed to be
the number of shares of Voting Stock comprising the specified percentage of the
Company's entire voting power then entitled to vote generally in the election of
directors or then entitled to vote together with the Common Shares in respect of
any merger, consolidation, sale of all or substantially all of the Company's
assets, liquidation, dissolution or winding up.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time, upon ten (10) days' prior written notice to the Rights Agent,
appoint such co-Rights Agents as it may deem necessary or desirable. The Rights
Agent shall have no duty to supervise, and shall in no event be liable for, the
acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the tenth business day (or such later date as may be
determined by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any Person
(other than any Exempt Person or any Excluded Entity) of, or of the first public
announcement of the intention of any Person (other than any Exempt Person or any
Excluded Entity) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the Beneficial Owner of Common Shares
aggregating 15% or more of the then outstanding Common Shares (including any
such date which is after the date of this Agreement and prior to the issuance of
the Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to Section 3(b)
hereof) by the certificates for Common Shares registered in the names of the
holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Shares. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first class, insured, postage prepaid mail, to each record holder of
Common Shares as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held. As of the Distribution Date,
the Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by first
class, postage prepaid mail, to each record holder of
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Common Shares as of the close of business on the Record Date, at the address of
such holder shown on the records of the Company. With respect to certificates
for Common Shares outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates registered in the names
of the holders thereof together with a copy of the Summary of Rights attached
thereto. Until the earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date, the surrender for transfer of any certificate for Common
Shares outstanding on the Record Date, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this Section 3(c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them a legend
in substantially the following form:
This certificate also evidences and entitles the record holder
of the shares evidenced hereby to certain Rights as set forth
in a Rights Agreement between X.X. Xxxxxxxx, Inc. (the
"Company") and BankBoston, N.A. as the same may be in effect
from time to time (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the
Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the record holder of the
shares evidenced hereby a copy of the Rights Agreement without
charge upon written request. As described in the Rights
Agreement, Rights issued to or held by any Person who is, was
or becomes an Acquiring Person or any Associate, Affiliate or
Transferee thereof (as such terms are defined in the Rights
Agreement), whether held by or on behalf of any such person or
any subsequent holder, shall become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. If
the Company purchases or acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with 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
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rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-hundredth of a Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one-hundredth of a Preferred Share and the
Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
Vice Chairman, its President, any of its Vice Presidents, or its Treasurer,
either manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by the Secretary or
an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless countersigned. If any
officer of the Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its office designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the earlier of
the Redemption Date or the Final Expiration Date, any Right Certificate or Right
Certificates (other than Right Certificates representing Rights that have become
void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant
to Section 24 hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-hundredth of a Preferred Share as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up, combined or exchanged at the
office of the Rights Agent designated for such purpose. Thereupon the Rights
Agent shall countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
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Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Purchase Price for each one
one-hundredth of a Preferred Share as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business on May 15, 2009 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date"), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred
Share purchasable pursuant to the exercise of a Right shall initially be $250
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i)(A) requisition from any transfer agent of the Preferred
Shares certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent depositary receipts
representing such number of one one-hundredth of a Preferred Share as are to be
purchased (in which case certificates for the Preferred Shares represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt, deliver such cash to or
upon the order of the registered holder of such Right Certificate.
(d) If the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights
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remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to such holder's duly authorized assigns,
subject to Section 14 hereof.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Availability of Preferred Shares. The Company covenants and
agrees that it will (i) cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7 and (ii)
take all such action as may be necessary to ensure that all Preferred Shares
delivered upon exercise of Rights shall at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
non-assessable shares.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for the Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's reasonable satisfaction that
no such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
which the Preferred Shares transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be
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exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred 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) If the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of the Company's capital stock
in a reclassification of the Preferred Shares (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), then 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 the Company's capital stock
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such date, such
holder would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, if (A) any
Person shall become an Acquiring Person (other than through an
acquisition described in subparagraph (iii) of this Section 11(a)) or
(B) during such time as there is an Acquiring Person, there shall be
any reclassification of securities (including any reverse stock split),
or recapitalization or reorganization of the Company or other
transaction or series of transactions involving the Company which has
the effect, directly or indirectly, of increasing by more than l% the
proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries beneficially owned
by any Acquiring Person or any Affiliate or Associate thereof, then
each holder of a Right shall thereafter have a right to receive, upon
exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredth of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares
as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-hundredth of a Preferred Share
for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Company's Common
Shares (determined pursuant to Section 11(d) hereof) on the date of the
occurrence of the earlier of the events described in clauses (A) and
(B) above. If any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded
by the Rights.
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From and after the occurrence of the earlier of the events
described in clauses (A) and (B) above, any Rights that are or were
acquired or beneficially owned by any Acquiring Person (or any
Associate, Affiliate or Transferee of such Acquiring Person) shall be
void and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that represents
Rights beneficially owned by an Acquiring Person whose Rights would be
void pursuant to the preceding sentence or any Associate, Affiliate or
Transferee thereof; no Right Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate,
Affiliate or Transferee thereof or to any nominee of such Acquiring
Person, Associate, Affiliate or Transferee; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence shall be
cancelled.
The Company may require (or cause the Rights Agent to require)
any Person who purports to exercise any Rights to establish to the
reasonable satisfaction of the Company that he, she or it is not a
Person whose Rights would be void pursuant to the first sentence of the
preceding paragraph of this Section 11(a)(ii).
The Company shall use all reasonable efforts to insure that
the provisions of this Section 11(a)(ii) are complied with, but shall
have no liability to any holder of Right Certificates or other Person
as a result of its failure to make any determinations with respect to
an Acquiring Person or its Affiliates, Associates or Transferees
hereunder.
(iii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, in the sole discretion of
the Board of Directors, elect to (and, in the event that the Board of
Directors has not exercised the exchange right contained in Section 24
hereof and there are not sufficient issued but not outstanding and
authorized but unissued Common Shares to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the
Company shall) take all such action as may be necessary to authorize,
issue or pay, upon the exercise of the Rights, cash (including by way
of a reduction of the Purchase Price), property, other securities or
any combination thereof having an aggregate value equal to the value of
the Common Shares which otherwise would have been issuable pursuant to
Section 11(a)(ii), which aggregate value shall be determined by a
majority of the Board of Directors. For purposes of the preceding
sentence, the value of the Common Shares shall be determined pursuant
to Section 11(d) hereof and the value of any equity securities which a
majority of the Board of Directors determines to be a "common stock
equivalent" (including the Preferred Shares, in such ratio as the Board
of Directors shall determine) shall be deemed to have the same value as
the Common Shares. Any such election by the Board of Directors must be
made and publicly announced within 60 days following the date on which
the event described in Section 11(a)(ii) shall have occurred.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price
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per Preferred Share or equivalent preferred share (or having a conversion price
per share, if a security convertible into Preferred Shares or equivalent
preferred shares) less than the then current per share market price of the
Preferred Shares (as defined in Section 11(d)) on such record date, then the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. If such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the Rights
Agent. Preferred Shares owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and
if such rights, options or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), then the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Preferred Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable to
one Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and if such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purpose of
this Section 11(d)(i)) on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the 30
consecutive Trading Days (as defined herein) immediately prior to such
date;
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provided, however, that if the current per share market price of the
Security is determined during a period following the announcement by
the issuer of such Security of (A) a dividend or distribution on such
Security payable in shares of such Security or securities convertible
into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share
market price shall be appropriately adjusted to reflect the current
market price per share equivalent of such Security. The closing price
for each day shall be the last sale price, regular way, or, if no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such
other system then in use, or, if on any such date the Security is not
quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is
not listed or admitted to trading on any national securities exchange,
a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be conclusively deemed to
be the current per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither
the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall mean the fair
value per share as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the
Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of a Common Share or any other share or
security, as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which requires
such adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
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(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 with respect to the Preferred Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredth of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and 11(c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredth of a Preferred Share (calculated to the nearest one-millionth
of a Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredth 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 substitution for any
adjustment in the number of one one-hundredth of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredth of a Preferred Share for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest 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 Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
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(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredth of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-hundredth
of a Preferred Share which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares 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
non-assessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by the Company
to holders of its Preferred Shares shall not be taxable to such shareholders.
(n) If at any time after the date of this Agreement and prior to
the Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (i) the number of one one-hundredth of a Preferred
Share purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredth of a Preferred Share
so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares outstanding
immediately after such event, and (ii) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
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Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent may rely on such certificate and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. If, directly or indirectly, (a) the Company shall consolidate
with, or merge with and into, any other Person, (b) any Person shall consolidate
with the Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and in connection with
such merger, all or part of the Common Shares shall be changed into or exchanged
for stock or other securities of any other Person (or the Company) or cash or
any other property, or (c) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price multiplied by the number of one one-hundredth
of a Preferred Share for which a Right is then exercisable, in accordance with
the terms of this Agreement and in lieu of Preferred Shares, such number of
Common Shares of such other Person (including the Company as successor thereto
or as the surviving corporation) as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one one-hundredth
of a Preferred Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price of the Common
Shares of such other Person (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation, merger, sale or transfer; (ii) the
issuer of such Common Shares shall thereafter be liable for, and shall assume,
by virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall
take such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to
the Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement so providing. The Company
shall not enter into any transaction of the kind referred to in this Section 13
if at the time of such transaction there are any rights, warrants, instruments
or securities outstanding or any agreements or arrangements which, as a result
of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. This Section 13
shall similarly apply to successive mergers or consolidations or sales or other
transfers.
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Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, if no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
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. 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 shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-hundredth of a Preferred
Share, the Company may pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Preferred Share. For the
purposes of this Section 14(b), the current market value of a Preferred Share
shall be the closing price (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) of a Preferred Share for the Trading Day immediately
prior to the date of such exercise.
(c) The Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. Fractions of Common Shares may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Common Shares represented by such depositary receipts.
In lieu of fractional
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Common Shares, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Common
Share. For the purposes of this Section 14(c), the current market value of a
Common Share shall be the closing price (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) of a Common Share for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives such holder's to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for such
holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce or otherwise act in respect of,
such holder's right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
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Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, 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.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for appointment as a
successor Rights Agent under Section 21 hereof. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the
Right Certificates shall have been countersigned but not delivered, then any
such successor Rights Agent may adopt the countersignature of the predecessor
the Rights Agent and deliver such Right Certificates so countersigned; and if at
that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor the Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
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If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board of
Directors, the Vice Chairman, the President, any Vice President, the Treasurer
or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after receipt
of a certificate furnished pursuant to Section 12, describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued
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pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares will, when issued, be validly authorized and issued, fully paid
and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board of Directors, the Vice Chairman, the President,
any Vice President, the Secretary or the 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 by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any 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 reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
the Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or the Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares or
the Preferred Shares by
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registered or certified mail, and to the holders of the Right Certificates by
first class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit such holder's Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of any state of the United States, in good standing, having an
office in Chicago, Illinois or the Borough of Manhattan, New York, New York,
which corporation is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) is a Subsidiary of
such corporation described in the immediately preceding clause (a). 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 Shares or the
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Rights may be redeemed by action of the Board of Directors
pursuant to Section 23(b) and shall not be redeemed in any other manner.
(b) The Board of Directors may, at its option, at any time prior
to the Close of Business on the thirtieth (30th) day (or such earlier date as
may be determined by action of the Board of Directors) following a Shares
Acquisition Date, redeem all but not less than all the then outstanding Rights
at a redemption price of $.001 per Right, 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"). The redemption of the Rights by the Board of Directors and the payment
of the Redemption Price may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
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establish. Any provision in this Agreement to the contrary notwithstanding, the
Rights shall not be exercisable after the first occurrence of any event
described in Section 11(a)(ii) hereof until the Company's right of redemption
set forth in this Section 23(b) shall have expired.
(c) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights pursuant to Section 23(b), and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. Within 10 days
after such action of the Board of Directors ordering the redemption of the
Rights pursuant to Section 23(b), the Company shall mail a notice of redemption
to all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange.
(a) The Board of Directors may, at its option, at any time after
any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to Section 11(a)(ii) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than an
Exempt Person or any Excluded Entity), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors ordering
the exchange of any Rights pursuant to Section 24(a) and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
that number of Common Shares equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be
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effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Preferred Shares (or equivalent preferred shares, as
such term is defined in Section 11(b) hereof) for Common Shares exchangeable for
Rights, at the initial rate of one one-hundredth of a Preferred Share (or
equivalent preferred share) for each Common Share, as appropriately adjusted to
reflect adjustments in the rights of the Preferred Shares pursuant to the terms
thereof.
(d) If there shall not be sufficient Common Shares or Preferred
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
Common Shares or Preferred Shares for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or Preferred Shares or to distribute certificates which evidence
fractional Common Shares or Preferred Shares. Fractions of Common Shares or
Preferred Shares may, at the election of the Company, be evidenced by depositary
receipts issued pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Common Shares
or Preferred Shares, as the case may be. In lieu of such fractional Common
Shares or Preferred Shares that are not integral multiples of one one-hundredth
of a Preferred Share, the Company may pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares or Preferred
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share or whole Preferred Share, as
the case may be. For the purposes of this subsection (e), the current market
value of a whole Common Share or a whole Preferred Share shall be the closing
price (as determined pursuant to the second sentence of Section 11(d)(i) hereof)
of a Common Share or a Preferred Share, as the case may be, for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) If the Company shall propose (i) to pay any dividend payable
in stock of any class to the holders of its Preferred Shares or to make any
other distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of
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dividends in Common Shares), then, in each such case, the Company shall give to
each holder of a Right Certificate, as promptly as reasonably practicable, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or 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
Common Shares and/or Preferred Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or (ii)
above at least 10 days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.
(b) If any of the events set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii)
hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Before June 1, 1999:
X.X. Xxxxxxxx, Inc.
000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Secretary
On or after June 1, 1999:
X.X. Xxxxxxxx, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Secretary
Subject to Section 21 hereof, any notice or demand authorized by this Agreement
to be given or made by the Company or by the holder of any Right Certificate to
or on the Rights Agent shall be sufficiently given or made if sent by first
class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
BankBoston, N.A.
c/o EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Client Administration
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Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended (x) so as to make the
Rights redeemable if the Rights are not then redeemable in accordance with
Section 23 of this Agreement or (y) in any manner which would adversely affect
the interests of the holders of Rights (other than holders of Rights which have
become void pursuant to Section 11 of this Agreement). Without limiting the
foregoing, the Board of Directors may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower the thresholds
set forth in Sections 1(a) and 3(a) hereof from 15% to not less than the greater
of (i) any percentage greater than the largest percentage of the outstanding
Common Shares then known by the Company to be beneficially owned by any Person
(other than an Exempt Person or an Excluded Entity) and (ii) 10%.
Notwithstanding any provision of this Agreement to the contrary, no supplement
or amendment shall be made to the proviso at the end of Section 31 hereof.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors. The
Board of Directors shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted to the
Board of Directors, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (a) interpret the provisions of this Agreement, and (b) 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 purpose of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board of Directors in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other interested
parties, and (y) not subject the Board of Directors to any liability to the
holders of the Right Certificates.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
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Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding any provision of this Agreement to the
contrary, if the exclusion of Exempt Persons from the definitions of "Acquiring
Person," "Affiliate," "Associate" or "Transferee" hereunder is held by a court
of competent jurisdiction or other governmental authority to be invalid, void or
unenforceable, in whole or to any extent in part, then, effective upon the entry
of the judgment, order or determination of such court or governmental authority
and without any further action and without any notice, the right to exercise the
Rights will terminate, the Board of Directors shall redeem all of the Rights at
the Redemption Price, and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Illinois and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
X.X. XXXXXXXX, INC.
Attest:
By: /s/ K. S. Xxxxxxx By: /s/ X. X. Xxxxx
------------------------- -------------------------------
K. S. Xxxxxxx X. X. Xxxxx
Assistant Secretary Vice Chairman
BANKBOSTON, N.A.
Attest:
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxxx Xxxxxx
---------------------- -------------------------------
Xxxxxxx Xxxxxxxxx Xxxxx Xxxxxx
Account Manager Director, Client Services
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Exhibit A
FORM OF
RESOLUTION FIXING AND DETERMINING THE TERMS
OF THE
SERIES A-1999 JUNIOR PARTICIPATING PREFERRED STOCK
of
X.X. XXXXXXXX, INC.
Pursuant to Section 6.10 of the
Illinois Business Corporation Act of 1983
X.X. XXXXXXXX, INC., a corporation organized and existing under the
Business Corporation Act of 1983 of the State of Illinois, in accordance with
the provisions of Section 6.10 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Articles of Incorporation of the said
Corporation, the said Board of Directors on April, 28, 1999, adopted the
following resolution creating a series of 2,000,000 shares of Preferred Stock
designated as "Series A-1999 Junior Participating Preferred Stock":
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board
of Directors" or the "Board") in accordance with the provisions of the
Articles of Incorporation, the Board of Directors hereby creates a
series of Preferred Stock, par value $5.00 per share (the "Preferred
Stock"), of the Corporation and hereby states the designation and
number of shares, and fixes the relative rights, preferences, and
limitations thereof as follows:
SERIES A-1999 JUNIOR PARTICIPATING PREFERRED STOCK:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A-1999 Junior Participating Preferred Stock" (the "Series
A-1999 Preferred Stock") and the number of shares constituting the Series A-1999
Preferred Stock shall be 2,000,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided that no decrease
shall reduce the number of shares of Series A-1999 Preferred Stock to a number
less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A-1999 Preferred Stock.
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Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A-1999 Preferred Stock with respect to dividends, the holders of
shares of Series A-1999 Preferred Stock, in preference to the holders of common
stock, par value $.50 per share (the "Common Shares"), of the Corporation, and
of any other junior 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 first 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 A-1999 Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Shares or a subdivision of the outstanding shares of
Common Shares (by reclassification or otherwise), declared on the Common Shares
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A-1999 Preferred Stock. If the
Corporation shall at any time declare or pay any dividend on the Common Shares
payable in shares of Common Shares, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Shares (by reclassification or
otherwise than by payment of a dividend in shares of Common Shares) into a
greater or lesser number of shares of Common Shares, then in each such case the
amount to which holders of shares of Series A-1999 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 Shares outstanding immediately after such event
and the denominator of which is the number of shares of Common Shares that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A-1999 Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on the Common
Shares (other than a dividend payable in shares of Common Shares); provided
that, if no dividend or distribution shall have been declared on the Common
Shares during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on
the Series A-1999 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 A-1999 Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A-1999 Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A-1999 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
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on a share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders of
shares of Series A-1999 Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A-1999
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A-1999 Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the shareholders of
the Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Shares payable in shares of Common Shares, or effect
a subdivision or combination or consolidation of the outstanding shares of
Common Shares (by reclassification or otherwise than by payment of a dividend in
shares of Common Shares) into a greater or lesser number of shares of Common
Shares, then in each such case the number of votes per share to which the
holders of shares of Series A-1999 Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Shares outstanding
immediately after such event and the denominator of which is the number of
shares of Common Shares that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Resolution creating a series of Preferred Stock or any similar stock, or by law,
the holders of shares of Series A-1999 Preferred Stock and the holders of shares
of Common Shares and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of shareholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A-1999 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 Shares 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 A-1999 Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A-1999 Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A-1999 Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A-1999 Preferred Stock, except dividends paid ratably on the
Series A-1999 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 junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A-1999 Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior 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 A-1999 Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A-1999 Preferred Stock, or any
shares of stock ranking on a parity with the Series A-1999 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 A-1999
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled 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 subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Incorporation, or in any other Resolutions
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A-1999
Preferred Stock unless, prior thereto, the holders of shares of Series A-1999
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series
A-1999 Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of shares
of Common Shares, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A-1999 Preferred Stock, except distributions made ratably on the Series
A-1999 Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time
declare or pay any dividend on the Common Shares payable in shares of Common
Shares, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Shares (by reclassification or otherwise than by
payment of a dividend in shares of Common Shares) into a greater or lesser
number of shares of Common Shares, then in each such case the aggregate amount
to which holders of shares of
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Series A-1999 Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) 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 Shares outstanding immediately after such event and the
denominator of which is the number of shares of Common Shares that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. If the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Shares are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A-1999 Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Shares is changed or exchanged.
If the Corporation shall at any time declare or pay any dividend on the Common
Shares payable in shares of Common Shares, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Shares (by
reclassification or otherwise than by payment of a dividend in shares of Common
Shares) into a greater or lesser number of shares of Common Shares, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A-1999 Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Shares outstanding immediately after such event and the
denominator of which is the number of shares of Common Shares that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A-1999
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A-1999 Preferred Stock shall
rank, with respect to the payment of dividends and the distribution of assets,
junior to all series of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Articles of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A-1999 Preferred
Stock so as to affect them adversely without the affirmative vote of the holders
of at least two-thirds of the outstanding shares of Series A-1999 Preferred
Stock, voting together as a single class.
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Exhibit B
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER MAY 15, 2009 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS HELD BY A
PERSON WHO IS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE,
ASSOCIATE OR TRANSFEREE 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, SHALL BECOME NULL AND VOID.
Right Certificate
X.X. XXXXXXXX, INC.
This certifies that, ___________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of April 28, 1999 (the "Rights Agreement"), between X.X.
Xxxxxxxx, Inc., an Illinois corporation (the "Company"), and BankBoston, N.A.
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M., New York City time, on May 15, 2009 at the office of the Rights Agent
designated for such purpose, or at the office of its successor as Rights Agent,
one one-hundredth of a fully paid, non-assessable share of Series A-1999 Junior
Participating Preferred Stock, par value $5.00 (the "Preferred Shares"), of the
Company, at a purchase price of $250 per one one-hundredth of a Preferred Share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-hundredth
of a Preferred Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price
as of ___________, based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-hundredth of a Preferred Share which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, as the same may be amended from time to
time, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of
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rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Right Certificates. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and the
above-mentioned office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Right Certificate (i) may be redeemed by the Company at its option at a
redemption price of $.001 per Right, (ii) entitled the holder to purchase the
number of shares of common stock, par value $.50 ("Common Shares"), of the
Company and/or under certain circumstances the number of Preferred Shares, cash,
other property or other securities with a value of twice the exercise price, or
(iii) may be exchanged, in whole or in part, by the Company at its option for
the number of Preferred Shares, Common Shares or other securities, with a market
value equal to fifty percent (50%) of the fair market value.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof depositary receipts for
such fractional Preferred Shares will be issued or a cash payment will be made,
as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
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WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ____________________, _________.
ATTEST: X.X. Xxxxxxxx, Inc.
__________________________ By:_______________________
Secretary
Countersigned:
BankBoston, N.A.
as Rights Agent
By: __________________________
Authorized Signature
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED______________________hereby sells, assigns and transfers
unto____________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
________________________ Attorney, to transfer the within Right Certificate on
the books of the within-named Company, with full power of substitution.
Dated:_____________________ , ____ __________________________________
Signature
Signatures Guaranteed:
(All signatures must be guaranteed by an eligible institution that is a member
of a recognized medallion signature guaranty program).
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate, Associate or Transferee thereof (as defined in the Rights Agreement).
________________________
Signature
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Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(i) this Right Certificate [ ] is/ [ ] is not being sold,
assigned or transferred by or on behalf of a person who is, was or
became an Acquiring Person or an Affiliate, Associate or Transferee
thereof, as such terms are defined in the Rights Agreement; and
(ii) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did/ [ ] did not purchase or otherwise
acquire the rights evidenced by this Right Certificate from any person
who is, was or became an Acquiring Person or an Affiliate, Associate or
Transferee thereof.
________________________
Signature
Signatures Guaranteed:
(Signatures must be guaranteed by an eligible institution that is a member of a
recognized medallion signature guaranty program.)
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To X.X. XXXXXXXX, INC.:
The undersigned hereby irrevocably elects to exercise________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights (or such other securities of the
Company or of another Person which may be issuable upon exercise of the Rights)
and requests that certificates for such Preferred Shares be issued in the name
of:
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 Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number: ____________________________________
(Please print name and address)
Dated:____________ , _____
_____________________
Signature
Signatures Guaranteed:
(All signatures must be guaranteed by an eligible institution that is a member
of a recognized medallion signature guaranty program.)
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Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(i) this Right Certificate [ ] is/ [ ] is not being sold,
assigned or transferred by or on behalf of a person who is, was or
became an Acquiring Person or an Affiliate, Associate or Transferee
thereof, as such terms are defined in the Rights Agreement; and
(ii) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did/ [ ] did not purchase or otherwise
acquire the rights evidenced by this Right Certificate from any person
who is, was or became an Acquiring Person or an Affiliate, Associate or
Transferee thereof.
__________________
Signature
Signatures Guaranteed:
(All signatures must be guaranteed by an eligible institution that is a member
of a recognized medallion signature guaranty program.)
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NOTICE
The signatures in the foregoing Form of Assignment, the Form of
Election to Purchase, and the related Certificates, as the case may be, must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
If the certification set forth above in the Form of Assignment or the
Form of Election to Purchase, as the case may be, is not completed and signed,
the Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be void as provided in Section 11(a)(ii)
of the Rights Agreement and such Form of Assignment or Form of Election to
Purchase will not be honored.
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Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On April 28, 1999, the Board of Directors of X.X. Xxxxxxxx, Inc., an
Illinois corporation (the "Company"), declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$.50 per share (the "Common Shares"), of the Company. The dividend is payable on
May 15, 1999 to shareholders of record on May 10, 1999 (the "Record Date").
Except as described below, each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A-1999 Junior
Participating Preferred Stock, par value $5.00 per share (a "Preferred Share"),
of the Company at an exercise price of $250 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The terms of the Rights are
set forth in the Rights Agreement dated April 28, 1999 (the "Rights Agreement")
between the Company and BankBoston, N.A., 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 (an
"Acquiring Person") has acquired beneficial ownership of 15% or more of the
outstanding Common Shares (the date of such announcement being called the
"Shares Acquisition Date") or (ii) 10 business days (or such later date as may
be determined by action of the Board of Directors prior to such time as any
Person becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of such outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the Record
Date, by such Common Share certificate with a copy of this Summary of Rights
attached thereto.
The descendants of X.X. Xxxxxxxx, the descendants of X.X. Xxxxxx,
certain relatives of such descendants, certain charitable organizations and
certain entities controlled by or for the benefit of such persons are not
Acquiring Persons or affiliated or associated persons for any purposes under the
Rights Agreement.
The Rights Agreement provides that, until the Distribution Date (or the
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or the
earlier redemption or expiration of the Rights), new Common Share certificates
issued after the Record Date will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares, outstanding as of the Record Date, even without such notation or
a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date. Such separate Right Certificates alone will evidence the
Rights.
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The Rights are not exercisable until the Distribution Date. The Rights
will expire on May 15, 2009 (the "Final Expiration Date") unless the Rights are
earlier redeemed by the Company, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredth of
a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share, but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $100 per share but will be entitled
to an aggregate payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights are protected by
customary anti-dilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
If the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold,
proper provision will be made so that each holder of a Right will 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 will have a market value
of two times the exercise price of the Right. If (i) any person becomes an
Acquiring Person or (ii) during such time as there is an Acquiring Person, there
shall be a reclassification of securities or a recapitalization or
reorganization of the Company or other transaction or series of transactions
involving the Company which has the effect of increasing by more than l% the
proportionate share of the outstanding shares of any class of equity securities
of the Company or any of its subsidiaries beneficially owned by the Acquiring
Person, then each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a
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market value of two times the exercise price of the Right; provided, however,
that no Right shall be exercisable after an event described in this sentence
until after the expiration of the power of the Board of Directors of the Company
to redeem the Rights, as described below.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which have become
void), in whole or in part, at an exchange ratio of one Common Share, or one
one-hundredth of a Preferred Share (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).
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 Common Shares or Preferred Shares will be
issued (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share, which may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of the Common Shares or Preferred Shares, as the case
may be, on the last trading day prior to the date of exercise.
At any time until 30 days following the Shares Acquisition Date (or
such earlier time as may be determined by the Board of Directors), the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.001 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time on such basis and with such conditions as the
Board of Directors in its sole discretion may establish.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights. Such an amendment
could, among other things, lower the threshold for exercisability of the Rights
from 15% to not less than the greater of (i) any percentage greater than the
largest percentage of the outstanding Common Shares then known to the Company to
be beneficially owned by any person or group (other than certain persons or
groups which are excluded from the Rights Agreement's definition of the term
"Acquiring Person") and (ii) 10%, except that from and after such time as any
person becomes an Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights.
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.
The Rights will have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors.
A copy of the Rights Agreement has been or will be 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 free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
3
