1
EXHIBIT 2
RIGHTS AGREEMENT
between
NCI BUILDING SYSTEMS, INC.
and
XXXXXX TRUST AND SAVINGS BANK,
Rights Agent
Dated as of June 24, 1998
2
TABLE OF CONTENTS
Section Page
------- ----
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 6. Transfer, Split Up, Combination, and Exchange of Right Certificates;
Mutilated, Destroyed, Lost, or Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . 9
Section 8. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 9. Reservation and Availability of Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 11. Adjustment of Purchase Price, Number, and Kind of Shares, or Number
of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . 20
Section 13. Consolidation, Merger, or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . 20
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . 00
-x-
0
Xxxxxxx 00. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 23. Redemption and Termination; Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 24. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 26. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 28. Determinations and Actions by the Board of Directors, etc . . . . . . . . . . . . . . . . . . . . . 33
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Exhibit A Certificate of Designation of Series A Junior Participating Preferred Stock
Exhibit B Form of Right Certificate
-ii-
4
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (this "Agreement"), dated as of June 24, 1998,
is by and between NCI Building Systems, Inc., a Delaware corporation (the
"Company"), and Xxxxxx Trust and Savings Bank, an Illinois banking corporation
(the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
distribution of one Right (as defined below) for each share of Common Stock,
par value $0.01, of the Company (the "Common Stock") outstanding at the close
of business on the Record Date (as defined below) and, in connection with that
declaration, has authorized the issuance of one Right for each share of Common
Stock of the Company issued between the Record Date and the Distribution Date
(as 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 that,
together with all Affiliates and Associates of such Person, is the
Beneficial Owner of 20% or more of the voting power of the capital
stock of the Company then outstanding, but shall not include the
Company, any Subsidiary, any employee benefit plan of the Company or
of any Subsidiary, or any Person organized, appointed or established
by the Company or any Subsidiary for or pursuant to the terms of any
such plan.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of (a) an acquisition of shares of
capital stock of the Company by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 20% or more of the voting
power of the capital stock of the Company then outstanding or (b) the
acquisition by such Person of newly issued shares of capital stock
directly from the Company (it being understood that a purchase from an
underwriter or other intermediary is not directly from the Company);
provided, however, that if a Person shall become the Beneficial Owner
of 20% or more of the voting power of the capital stock of the Company
then outstanding by reason of share purchases by the Company or the
receipt of newly issued shares of capital stock directly from the
Company and shall, after such share purchases or direct issuance by
the Company, become the Beneficial Owner of any additional shares of
capital stock of the Company, then such Person shall be deemed to be
an "Acquiring Person"; provided further, however, that any transferee
from such Person who becomes the Beneficial Owner of 20% or more of
the voting power of the capital stock of the Company then outstanding
shall nevertheless be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the
5
Company determines in good faith that a Person who would otherwise be
an "Acquiring Person," as defined pursuant to the foregoing provisions
of this paragraph, has become such inadvertently, and such Person
divests as promptly as practicable (and in any event within ten
business days after notification by the Company) a sufficient number
of shares of capital stock so that such Person would no longer be an
Acquiring Person, as defined pursuant to the foregoing provisions of
this paragraph, then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement. The word
"outstanding," when used with reference to a Person's Beneficial
Ownership of shares of capital stock of the Company, shall mean the
number of such shares then issued and outstanding together with the
number of such shares not then issued and outstanding which such
Person would be deemed to own beneficially hereunder.
(b) "Affiliate" and "Associate" shall have the meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities or equity
interests:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, 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 (whether or not in
writing) or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights at any time before the
occurrence of a Triggering Event but thereafter including
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 such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B) the
right to vote or dispose of or "beneficial ownership" (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act) of (including pursuant to
any agreement, arrangement or understanding, whether or not in
writing); provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," any
security under this clause (B) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (1) arises solely from
a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (2) does not result in ownership
required to be reported by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor report); or
2
6
(ii) that are beneficially owned, by any other Person
(or any Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has any
agreement, arrangement, or understanding whether or not in
writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the provi so to
Section 1(c)(i) (B)), or disposing of any securities or equity
interests;
provided, however, that nothing in this paragraph (c) shall cause a
Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities
acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the
date of such acquisition.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in the
States of Texas or Illinois are authorized or obligated by law or
executive order to close.
(e) "Close of Business" on any given date shall mean
5:00 p.m., Texas time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 p.m., Texas or
Illinois time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the Common Stock, $0.01
par value, of the Company, except that "common stock" when used with
reference to any Person other than the Company shall mean the
class of capital stock of such Person with the greatest voting power,
or the equity securities or other equity interests having power to
control or direct the management, of such Person.
(g) "Continuing Director" shall mean any member of the
Board of Directors of the Company who (i) (A) is not an Acquiring
Person or a Person who is at the time engaged in a tender or exchange
offer that could result in that Person's becoming the Beneficial
Owner of 20% or more of the outstanding Common Stock, or an
Affiliate or an Associate of either of the foregoing, and (B) who
was a member of the Board of Directors of the Company before the
time the Acquiring Person became an Acquiring Person or the tender
or exchange offer began or (ii) (A) is not an Acquiring Person or a
Person who is at the time engaged in a tender or exchange offer that
could result in that Person's becoming the Beneficial Owner of 20%
or more of the outstanding Common Stock, or an Affiliate or an
Associate of either of the foregoing, and (B) was recommended to
serve on the Board of Directors of the Company by a majority of
Continuing Directors.
(h) "Distribution Date" shall have the meaning given it
in Section 3(a) hereof.
(i) "Expiration Date" shall have the meaning given it in
Section 7 hereof.
3
7
(j) "Person" shall mean any individual, firm,
corporation, partnership, or other entity.
(k) "Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, $1.00 par value, of the Company having
the designations, preferences, rights, qualifications, limitations,
and restrictions set forth in Exhibit A hereto.
(l) "Record Date" shall mean July 8, 1998.
(m) "Right" shall mean the right to purchase one
one-hundredth of a share of Series A Junior Participating Preferred
Stock, par value $1.00, of the Company, or other securities or
property, upon the terms and subject to the conditions hereinafter set
forth.
(n) "Right Certificates" shall mean certificates
substantially in the form of Exhibit B hereto, evidencing the rights
or any other form of certificate evidencing the Rights, which form is
adopted pursuant to this Agreement.
(o) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include a report filed pursuant to Section 13(d) of the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has
become such.
(p) "Subsidiary" shall mean any corporation or other
entity of which a majority of any class of equity securities or of any
equity interests is beneficially owned by the Company or a Subsidiary
of the Company, or that is otherwise controlled by the Company or a
Subsidiary of the Company, and "subsidiary," with reference to any
other Person, shall mean any corporation or other entity of which a
majority of any class of equity securities or of any equity interests
is beneficially owned by such other Person, or which is otherwise
controlled by such other Person.
(q) "Triggering Event" shall mean any event described in
Section 11(a)(ii) or Section 13(a) hereof.
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 before the Distribution Date
also be the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
4
8
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the close of business on the
fifteenth day (subject to extension by the Board of Directors as
provided below) after the Stock Acquisition Date, or (ii) the close of
business on the fifteenth day (subject to extension by the Board of
Directors as provided below) after the commencement of, or first
public announcement of the intent to commence, a tender or exchange
offer by any Person (other than the Company, any Subsidiary, any
employee benefit plan of the Company or of any Subsidiary, or any
Person organized, appointed, or established by the Company or any
Subsidiary for or pursuant to the terms of any such plan), if upon
consummation thereof, such Person would be the Beneficial Owner of 20%
or more of the shares of Common Stock then outstanding (the earlier of
such dates, after any extensions, being herein referred to as the
"Distribution Date"), (A) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for
the Common Stock registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (B) the
Rights will be transferable only in connection with the transfer of
the underlying shares of Common Stock (including a transfer to the
Company). The fifteen-day periods referred to in clauses (i) and (ii)
of the preceding sentence may be extended by the Board of Directors,
provided that no such extension may be made when a majority of the
directors in office are not Continuing Directors, and any such
extension shall expire immediately when a majority of the directors in
office are not Continuing Directors. As soon as practicable after the
Distribution Date, the Rights Agent will send, at the expense of the
Company, by first-class, postage-prepaid mail, to each record holder
of the Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the
Company, one or more Right Certificates evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided
herein. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) As promptly as practicable following the Record Date,
the Company will send a copy of a summary of the Rights to each record
holder of the Common Stock as of the close of business on the Record
Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock and
the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the
Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock issued on or after the Record Date but before the earlier
of the Distribution Date or the Expiration Date. Common Stock
certificates issued on or after the Record Date but before the earlier
of the
5
9
Distribution Date or the Expiration Date upon the transfer or new
issuance of shares of Common Stock shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between
the Corporation and Xxxxxx Trust and Savings Bank, dated as of
June 24, 1998 (the "Rights Agreement"), the terms of which are
incorporated herein and a copy of which is on file at the
principal offices of the Corporation. 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. Promptly after
receipt of a written request therefor, the Corporation will
mail or cause to be mailed to the holder of this certificate a
copy of the Rights Agreement without charge. Under certain
circumstances, Rights issued to, or held by, Acquiring Persons
or Affiliates or Associates thereof (as such terms are defined
in the Rights Agreement) and any subsequent holder of such
Rights may become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii) the
Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall also
be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such
certificates.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares of Common Stock and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set forth in
Exhibit B hereto and may have marks of identification or designation
and such legends, summaries, or endorsements printed thereon that the
Company may deem appropriate and that are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the
Distribution Date and on their face shall entitle the holders thereof
to purchase the number of shares of Preferred Stock set forth therein
at the Purchase Price (as such term is defined in Section 7), but the
number of shares purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided
herein.
6
10
(b) Any Right Certificate that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or such Associate or Affiliate) who becomes a
transferee before or at the same time the Acquiring Person becomes
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to
holders of equity interest in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement,
arrangement, or understanding regarding the transferred Rights or (B)
a transfer that is part of a plan, arrangement, or understanding that
has as a primary purpose or effect avoidance of Section 7(e) hereof,
and any Right Certificate issued upon transfer, exchange,
replacement, or adjustment of any other Right Certificate referred
to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Right
Certificate and the Rights represented hereby may become void in the
circumstances specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf
of the Company by its Chairman of the Board, its President, or any
Vice President, either manually or by facsimile signature, and shall
have affixed thereto the Company's seal or a facsimile thereof,
which shall be attested by the Secretary or an Assistant Secretary
of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who has signed
any of the Right Certificates ceases 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.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at the office designated by the Rights
Agent as the appropriate place for surrender of Right Certificates
upon exercise or transfer, books for registration and transfer of
the Right
7
11
Certificates issued hereunder. Such books shall show the names and
addresses of the holders of the Right Certificates, the number of
Rights evidenced on the face of each of the Right Certificates, and the
date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination, and Exchange of Right
Certificates; Mutilated, Destroyed, Lost, or Stolen Right Certificates.
(a) Subject to the provisions of Section 4(b), Section
7(e), and Section 14 hereof, at any time after the close of business
on the Distribution Date and until the close of business on the
Expiration Date, any Right Certificate may be transferred, split up,
combined, or exchanged for another Right Certificate or Certificates,
entitling the registered holder to purchase a like number of shares of
Preferred Stock (or, following a Triggering Event, other securities or
property, as the case may be) as the Right Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of
a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine, or exchange any Right Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate to be transferred, split up, combined, or
exchanged at the office of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of
assignment set forth on the reverse side of each such Right
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to Section 4(b)
and Section 7(e) hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination, or
exchange of Right Certificates.
(b) 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 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 execute and deliver a new
Right Certificate of like tenor (except for the issuance date thereof)
to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Right Certificate so lost, stolen,
destroyed, or mutilated.
8
12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder
of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii), and
Section 23(a) hereof) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase set forth on the reverse side thereof and
the certificate contained therein duly executed, to the Rights Agent
at the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price with respect to each
surrendered Right for the total number of shares (or other securities
or property, as the case may be) as to which such surrendered Rights
are exercisable, at or before the earlier of (i) the close of business
on June 24, 2008 (the "Final Expiration Date"), or (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (such
earlier time being herein referred to as the "Expiration Date").
(b) The purchase price for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right (the
"Purchase Price") shall initially be $125, and shall be subject to
adjustment from time to time as provided in Section 11 hereof and
shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase set forth on
the reverse side thereof and the certificate contained therein duly
executed, accompanied by payment, with respect to each Right so
exercised (by certified bank check or bank draft payable to the order
of the Rights Agent), of the Purchase Price for the shares of
Preferred Stock (or other securities or property, as the case may be)
to be purchased and an amount equal to any applicable transfer tax,
the Rights Agent shall, subject to Section 20(k) hereof, promptly (i)
(A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent
for the Preferred Stock) certificates for the number of shares of
Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests or (B)
requisition from the depositary agent depositary receipts representing
the number of one one-hundredths of a share of Preferred Stock being
purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) requisition from
the Company the amount of cash, if any, to be paid in lieu of
fractional shares of Preferred Stock in accordance with Section 14
hereof, (iii) after receipt of such certificates for shares of
Preferred Stock, cause the same to be delivered to or upon the order
of the registered holder of such Right Certificate, registered in the
name or names designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Right Certificate. All funds received by
the Rights Agent pursuant to the exercise of Rights shall be held in
trust for the benefit of the Company and paid over to the Company on
demand. If the Company is obligated to issue other securities of the
Company, pay cash, or distribute
9
13
other property pursuant to Section 11(a) hereof, the Company will make
all arrangements necessary so that such other securities, cash, or
other property is available for distribution by the Rights Agent, if
and when appropriate.
(d) If the registered holder of any Right Certificate
exercises less than all the Rights evidenced thereby, a new Right
Certificate evidencing the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name
or names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of a Triggering Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or such Associate or Affiliate) who becomes a
transferee before or at the same time the Acquiring Person becomes
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement,
arrangement, or understanding regarding the transferred Rights or (B)
a transfer that is part of a plan, arrangement, or understanding that
has as a primary purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action, and any holder
of such Rights shall thereupon have no rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) 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 determination with respect to
an Acquiring Person or its Affiliates, Associates, or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless the registered holder shall have completed and signed the
certificate contained in the form of election to purchase set forth on
the reverse side of the Right Certificate surrendered for such
exercise and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably
request.
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 any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of
10
14
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other
Right Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, other
securities) or any authorized and issued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, other
securities) held in its treasury, the number of shares of Preferred
Stock (and, following the occurrence of a Triggering Event, other
securities) that, except as provided in Section 11(a)(iii) hereof,
will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) If shares of Preferred Stock (and, following the
occurrence of a Triggering Event, other securities issuable and
deliverable upon the exercise of the Rights) are listed on any
national securities exchange, the Company shall use its best efforts
to cause, from and after the time the Rights become exercisable (but
only to the extent that it is reasonably likely that the Rights will
be exercised), all shares reserved for issuance upon the exercise of
the Rights to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file,
as soon as practicable following the first occurrence of a Triggering
Event, a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Preferred Stock or
other securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until the
Expiration Date. The Company will also take such action as may be
appropriate under the securities or "blue sky laws" of the various
states. The Company may temporarily suspend, for a period of time not
to exceed ninety (90) days, the exercisability of the Rights in order
to prepare and file such registration statement. Upon any such
suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended.
(d) The Company will take all such action as may be
necessary to ensure that all shares of Preferred Stock (and, following
the occurrence of a Triggering Event, other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable.
11
15
(e) The Company will pay when due and payable any and all
federal and state transfer taxes and charges payable in respect of the
issuance or delivery of the Right Certificates and of any certificates
for shares of Preferred Stock (or other securities, as the case may
be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance
or delivery of the shares of Preferred Stock or depositary receipts
(or other securities, as the case may be) to someone other than, the
registered holder of the Right Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for
shares of Preferred Stock (or other securities, as the case may be) in
a name other than that of the registered holder upon the exercise of
any Rights until such tax shall have been paid (any such tax being
payable by the holder of such Right Certificates at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name
any certificate for shares of Preferred Stock (or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of the shares of Preferred Stock (or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock (or other
securities, as the case may be) transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or other securities, as the case may be) transfer books of the
Company are open. Before the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including 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, and Kind of Shares,
or Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right, and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) If the Company at any time after the date
of this Agreement (A) declares a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivides the
outstanding Preferred Stock, (C) combines the outstanding
Preferred Stock into a smaller number of shares, or (D) issues
or authorizes the issuance of any shares of its capital stock
in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect at
the time of the record date for such dividend or of the
effective date of such
12
16
subdivision, combination, or reclassification, and the number
and kind of shares of Preferred Stock or capital stock, as the
case may be, issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and
kind of shares of Preferred Stock or capital stock, as the
case may be, which, if such Right had been exercised
immediately before such date and at a time when the Preferred
Stock (or other capital stock, as the case may be) transfer
books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, or reclassification. If
an event occurs that would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made before, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) If, at any time after the date of this
Agreement, any Person, alone or together with its Affiliates
or Associates, shall become an Acquiring Person, then proper
provision shall be made so that each holder of a Right (except
as provided below and in Section 7(e) hereof) shall thereafter
have the right to receive, upon exercise thereof at the
Purchase Price then current in accordance with the terms of
this Agreement, in lieu of the number of shares of Preferred
Stock for which a Right would otherwise be exercisable, a
number of shares of Common Stock of the Company equal to the
result obtained by (1) multiplying the Purchase Price then
current by the number of hundredths of a share of Preferred
Stock for which a Right was exercisable immediately before the
first occurrence of an event set forth in this Section
11(a)(ii), and dividing that product by (2) 50% of the current
market price (determined pursuant to Section 11(d) hereof) per
share of Common Stock on the date of such first occurrence
(the "Adjustment Shares").
(iii) If there are not sufficient authorized but
unissued and treasury shares of Common Stock 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 additional shares of
Common Stock for issuance upon exercise of the Rights;
provided, however, if the Company is unable to cause the
authorization of a sufficient number of additional shares of
Common Stock, then, if the Rights become so exercisable, the
Company, with respect to each Right and to the extent
necessary and permitted by applicable law and any agreements
or instruments in effect on the Stock Acquisition Date to
which it is a party, shall, upon the exercise of any such
Right, make adequate provision to: (A) pay an amount in cash
equal to the excess of (1) the product of (a) the number of
Adjustment Shares, multiplied by (b) the current market price
(determined pursuant to Section 11(d) hereof) per share of the
Common Stock on the date of the first occurrence of an event
set forth in Section 11(a)(ii) above (such product is herein
called the "Current Value"), over (2) the Purchase Price, in
lieu of issuing shares of Common Stock and requiring payment
therefor; (B) issue debt or equity securities (other than
Common
13
17
Stock) having a value equal to the Current Value, where the
value of such securities shall be determined by an investment
banking firm selected by the Board of Directors of the
Company, and requiring the payment of the Purchase Price
therefor; (C) issue a number of shares, or units of shares, of
preference stock equal to the number of Adjustment Shares
where the Board of Directors of the Company shall have deemed
such shares or units to have the same value as the Common
Stock (a "Common Stock Equivalent"), and requiring the payment
of the Purchase Price; or (D) deliver any combination of cash,
property, preference stock, Common Stock Equivalents, or other
securities having the requisite value as determined by the
Board of Directors and requiring the payment of all or any
requisite portion of the Purchase Price; provided further,
however, if the Company shall not have made adequate provision
to deliver value pursuant to clause (A), (B), (C), or (D)
above within sixty (60) days following the date of the first
occurrence of the event listed in Section 11(a)(ii), then the
Company shall be obligated to deliver cash in accordance with
clause (A) above. To the extent that the Company determines
that some action need be taken pursuant to clause (A), (B),
(C), or (D) of the first proviso to the first sentence of this
Section 11(a)(iii), the Company may suspend the exercisability
of the Rights for a period of up to sixty (60) days (or ninety
(90) days if a registration statement pursuant to Section 9(c)
hereof is being filed and pursued) following the date on which
the event listed in Section 11(a)(ii) shall have occurred, in
order to decide the appropriate form of distribution to be
made pursuant to such first proviso and to determine the value
thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(b) If the Company fixes a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record date) Preferred
Stock or securities convertible into Preferred Stock at a price per
share of Preferred Stock (or having a conversion price per share, if a
security convertible into Preferred Stock) less than the current
market price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately before such record date by a
fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of
shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock so to be offered (or the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such current market price and the
denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares
of Preferred Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible). If the subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash,
the value of such non-cash consideration shall be as determined in
good faith by the Board
14
18
of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the
Rights Agent. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and if such rights or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price that would then be in effect if such record date had
not been fixed.
(c) If the Company fixes a record date for a distribution
to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company
is the continuing corporation) of evidences of indebtedness, cash
(other than a regular cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in stock other
than Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately before such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent) of the portion of the
cash, assets, or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to a share of
Preferred Stock and the denominator of which shall be such current
market price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock. 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 be adjusted to be the Purchase Price
that would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, other than in Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately
before such date (or, if the Common Stock has been traded on
fewer than thirty (30) Trading Days, then the number of
Trading Days on which the Common Stock has been traded,) and
for the purpose of any computation in Section 11(a)(iii)
hereof, the "current market price" per share of Common Stock
on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date;
provided, however, that if the current market price per share
of the Common Stock is determined during a period following
the announcement by the issuer of such Common Stock of (i) a
dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into
shares of such Common Stock (other than the Rights), or (ii)
any subdivision, combination,
15
19
or reclassification of such Common Stock, and before the
expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, the ex-dividend
date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification occurs,
then, and in each such case, the "current market price" shall
be properly adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price,
regular way, or, 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 shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if not so
quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation
System ("Nasdaq") or such other system then in use, or, if on
any such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Common Stock selected by the Board of Directors
of the Company. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on
such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "Trading
Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation
hereunder, the "current market price" of the Preferred Stock
shall be determined in the same manner as set forth above for
Common Stock in Section 11(d)(i). If the current market price
of the Preferred Stock cannot be determined in the manner
provided above, the "current market price" of the Preferred
Stock shall be conclusively deemed to be the current market
price of the Common Stock (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 Stock nor the Preferred Stock is
publicly held or so listed or traded, "current market price"
shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
16
20
(e) Anything herein to the contrary
notwithstanding (except the last sentence of this Section
11(e)), no adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease
of at least one percent (1%) in the Purchase Price; provided,
however, that any adjustments that by reason of this Section
11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share, as
the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11
shall be made not later than the earlier of (i) three (3)
years from the date of the transaction that requires such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made
pursuant to Section 11(a) or Section 13(a) hereof, the holder
of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase Price
thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Preferred Stock
contained in this Section 11, and the provisions of Sections
7, 9, 10, 13, and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the
Company after any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of shares of Preferred
Stock purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company has exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately
before the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that
number of shares of Preferred Stock (calculated to the nearest
ten-thousandth) obtained by (i) multiplying (A) the number of
shares covered by a Right immediately before this adjustment,
by (B) the Purchase Price in effect immediately before 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
shares of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of
shares of Preferred Stock for which a Right was exercisable
immediately before such adjustment. Each Right held of record
before such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in
effect immediately before adjustment of the Purchase Price by
the
17
21
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 ten (10) days later than the date of the
public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of 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 before the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the
manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change
in the Purchase Price or the number of shares of Preferred
Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares
that were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause
an adjustment reducing the Purchase Price below the par value
of the shares of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action that may,
in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and
nonassessable shares of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event
the issuance to the holder of any Right exercised after such
record date the shares of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise over and above the shares of Preferred Stock and
other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price
in effect before 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 of Preferred Stock and other
capital stock or securities upon the occurrence of the event
requiring such adjustment.
18
22
(m) Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled to
make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as
and to the extent that in the good faith judgment of the Board
of Directors of the Company is advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii)
issuance for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance for cash of
shares of Preferred Stock or securities that by their terms
are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends, or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter
made by the Company to holders of its Preferred Stock shall
not be taxable to such stockholders.
(n) If at any time after the Record Date and
before the Distribution Date, the Company (i) declares or pays
any dividend on the Common Stock payable in Common Stock or
(ii) effects a subdivision, combination, or consolidation of
the Common Stock (by reclassification or otherwise than by
payment of dividends in Common Stock) into a greater or lesser
number of shares of Common Stock, then in any such case (A)
the number of hundredths of a share of Preferred Stock
purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of
hundredths of a share of Preferred Stock so purchasable
immediately before such event by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately before such event and the denominator of which is
the number of shares of Common Stock outstanding immediately
after such event, and (B) each share of Common Stock
outstanding immediately after such event shall have issued
with respect to it that number of Rights which each share of
Common Stock outstanding immediately before 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. If an event occurs
that would require an adjustment under Section 11(a)(ii) and
this Section 11(n), the adjustments provided for in this
Section 11(n) shall be in addition and prior to any adjustment
required pursuant to Section 11(a)(ii).
(o) If at the time of or immediately after
such consolidation, merger, or sale there are any rights,
warrants, or other instruments or securities outstanding or
agreements in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by
the Rights, the Company shall not, at any time after the
Distribution Date, (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one or more transactions, assets or
earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person.
(p) The Company shall not, after the
Distribution Date, except as permitted by Section 23 hereof,
take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that
such action will diminish substantially or eliminate the
benefits intended to be afforded by the Rights.
19
23
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock, 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 shall be fully protected in relying on any such
certificate and on any adjustment therein contained, and shall not be obligated
or responsible for calculating and adjustment. The Rights Agent may rely on
such certificate and shall not be deemed to have knowledge of any adjustment
unless and until it has received such certificate.
Section 13. Consolidation, Merger, or Sale or Transfer of Assets or
Earning Power.
(a) If, following the Distribution Date, directly or
indirectly, (i) the Company consolidates with, or merges with and
into, any other Person, and the Company is not the continuing or
surviving corporation of such consolidation or merger, (ii) any Person
consolidates with, or merges with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock, shall
be changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (iii) the Company sells
or otherwise transfers (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one or more transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary), then, and in each
such case, proper provision shall be made so that: (A) each holder of
a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the Purchase
Price then current in accordance with the terms of this Agreement, the
number of validly authorized and issued, fully paid, nonassessable and
freely tradable shares of common stock of the Principal Party (as such
term is hereinafter defined), not subject to any rights of first
refusal, equal to the result obtained by (1) multiplying the Purchase
Price then current by the number of hundredths of a share of Preferred
Stock for which a Right was exercisable immediately before the
consummation of such consolidation, merger, sale, or transfer (without
taking into account any adjustment previously made pursuant to Section
11(a)(ii) hereof) and dividing that product by (2) 50% of the current
market price (determined pursuant to Section 11(d) hereof) per share
of the common stock of such Principal Party on the date of
consummation of such consolidation, merger, sale, or transfer; (B)
such Principal Party shall thereafter be liable for, and shall assume,
by virtue of such consolidation, merger, sale, or transfer, all of the
obligations and duties of the Company pursuant to this Agreement; (C)
the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following
the first occurrence of an event set forth in this Section 13(a); and
(D) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares
20
24
of its common stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of common stock thereafter deliverable upon the
exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described
in clause (i) or (ii) of the first sentence of Section 13(a),
the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such
merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described
in clause (iii) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (1) if the common stock of
such Person is not at such time and has not been continuously over the
preceding twelve-month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect subsidiary of
another Person the common stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and
(2) in case such Person is a subsidiary, directly or indirectly, of
more than one Person, the common stocks of two or more of which are
and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the common stock having the
greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale, or transfer unless the Company and such
Principal Party have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger, or sale of
assets mentioned in paragraph (a) of this Section 13, the Principal
Party will
(i) prepare and file a registration statement
under the Securities Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date; and
21
25
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party and
each of its Affiliates that comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. If one of the
transactions described in Section 13(a) hereof occurs at any time
after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights that have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section
13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Right Certificates that evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Right.
For purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading
Day immediately before the date on which such fractional Rights would
have been otherwise issuable. The closing price of the Rights for any
day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the Rights,
the fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions
of shares of Preferred Stock (other than integral multiples of a
hundredth of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates that evidence fractional shares of
Preferred Stock (other than integral multiples of a hundredth of a
share of Preferred Stock). Fractions of shares of Preferred Stock in
integral multiples of a hundredth of a 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
22
26
agreement shall provide that the holders of such depositary receipts
shall have all of the rights, privileges, and preferences to which
they are entitled as beneficial owners of the shares of Preferred
Stock represented by such depositary receipts. In lieu of fractional
shares of Preferred Stock other than integral multiples of a hundredth
of a 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 share of Preferred Stock. Any holder of more than one
Right Certificate may exercise and aggregate all or part of the Rights
evidenced by two or more Right Certificates so as to obtain a whole
number of shares of Preferred Stock and to avoid receiving cash in
lieu of a fractional share of Preferred Stock to which such holder
would otherwise be entitled upon exercise of the Rights evidenced by a
single Right Certificate. For purposes of this Section 14(b), the
current market value of one share of Preferred Stock shall be the
closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d) hereof) for the Trading Day immediately before the date
of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the registered holders of the Right Certificates
(and, before the Distribution Date, the registered holders of the Common
Stock); and any registered holder of any Right Certificate (or, before the
Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, before the
Distribution Date, of the Common Stock), may, on his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action, or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to
specific performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any Person
subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) before the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of
transfer; and
23
27
(c) the Company and the Rights Agent may deem and treat
the person in whose name a Right Certificate (or, before the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
required to be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the shares of Preferred
Stock or any other securities of the Company that 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 stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 24 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.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence,
bad faith, or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the
premises. The indemnification provided for hereunder shall survive
the expiration of the Rights, the termination of this Agreement and
the resignation or removal of the Rights Agent. The costs and
expenses of enforcing this right of indemnification also shall be paid
by the Company,
(b) The Rights Agent may conclusively rely upon and shall
be protected and shall incur no liability for or in respect of any
action taken, suffered, or omitted by it in connection with its
administration of this Agreement in reliance upon any Right
Certificate or certificate for Preferred Stock or for other securities
of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
24
28
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the shareholder
services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. If at the time such
successor Rights Agent succeeds to the agency created by this
Agreement any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right
Certificates have not been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all
such cases such Right Certificates shall have the full force provided
in the Right Certificates and in this Agreement.
(b) If at any time the name of the Rights Agent is
changed and at such time any of the Right Certificates 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
have not been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name;
and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of Right Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting,
the Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent for
any action taken or omitted by it in good faith and in accordance with
such opinion.
25
29
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be
proved or established by the Company before 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 a
person believed by the Rights Agent to be the Chairman of the Board,
the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary, or any Assistant Secretary of the Company,
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates or be required to verify the
same (except as to its countersignature on such Right Certificates),
but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent), or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner, method,
or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after
receipt of a certificate furnished pursuant to Section 12 describing
such change or adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization
or reservation of any shares of Preferred Stock or other securities to
be issued pursuant to this Agreement or any Right Certificate or as to
whether any shares of Preferred Stock or other securities will, when
so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company 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.
26
30
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from a person believed by the Rights Agent to be the
Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer, or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such person. 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 stockholder, director,
officer, or employee of the Rights Agent may buy, sell, or deal in any
of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company, or otherwise act as
fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect, or misconduct of any such attorneys or agents, or for any
loss to the Company resulting from any such act, default, neglect or
misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of its rights if there is reasonable ground for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
contained in the form of assignment or the form of election to
purchase set forth on the reverse thereof, as the case may be, has
either not been
27
31
completed or indicates an affirmative response to clause 1 or 2
thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first
consulting with the Company.
(l) The Rights Agent shall not be required to take notice
or be deemed to have notice of any fact, event or determination
(including, without limitation, any dates or events defined in this
Agreement or the designation of any Person as an Acquiring Person,
Affiliate or Associate) under this Agreement unless and until the
Rights Agent shall be specifically notified in writing by the Company
of such fact, event or determination.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company, and
to each transfer agent of the Preferred Stock, by registered or certified mail,
and, at the expense of the Company, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Preferred Stock, by registered or certified mail, and to the holders of
the Right Certificates by first-class mail. If the Rights Agent resigns or is
removed or otherwise becomes incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company fails to make such appointment
within a period of thirty (30) days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by any holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by
the Company), then the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the laws of
the United States or of any State, in good standing, that is authorized under
such laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and that has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$10,000,000. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Preferred Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect
28
32
any adjustment or change in the Purchase Price per share and the number, kind
or class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and before the redemption or expiration of the
Rights, the Corporation may, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement granted or awarded on or before the Distribution Date or upon the
exercise, conversion, or exchange of securities hereafter issued by the
Corporation or in any other case, if deemed necessary or appropriate by the
Board of Directors, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale, provided that (i) no
such Right Certificate shall be issued if, and to the extent that, the
Corporation shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Corporation or the
Person to whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination; Exchange.
(a) The Board of Directors of the Company may (at any
time when a majority of the directors then serving are Continuing
Directors), at its option, at any time before 5:00 p.m., Dallas,
Texas, time, on the earlier of (i) the close of business on the
fifteenth day (subject to extension by the Board of Directors as
provided below) following the Stock Acquisition Date, or (ii) the
Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price"). The fifteen-day period referred to in the preceding sentence
may be extended by the Board of Directors, provided that no such
extension may be made when a majority of the directors in office are
not Continuing Directors, and any such extension shall expire
immediately when a majority of the directors in office are not
Continuing Directors. If, following the occurrence of a Stock
Acquisition Date and following the expiration of the Company's right
of redemption set forth in the preceding sentence but before any
Triggering Event, each of the following shall have occurred and remain
in effect: (1) a Person who was an Acquiring Person shall have
transferred or otherwise disposed of a number of shares of Common
Stock in a transaction, or series of transactions, that did not result
in the occurrence of a Triggering Event so that such Person is
thereafter a Beneficial Owner of 5% or less of the outstanding shares
of Common Stock, (2) such Person continues for a period of ninety (90)
days to beneficially own 5% or less of the outstanding shares of
Common Stock, (3) during such ninety-day period, there are no other
Persons who are Acquiring Persons, and (4) the transfer or other
disposition described in clause (1) above was other than pursuant to a
transaction, or series of transactions that directly or indirectly
involved the Company or any of its Subsidiaries; then the Company's
right of redemption set forth in the preceding sentence shall be
reinstated. Notwithstanding anything contained in this Agreement to
the
29
33
contrary, the Rights shall not be exercisable pursuant to Section
11(a)(ii) hereof before the expiration of the Company's right of
redemption set forth in the first sentence of this Section 23(a).
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent, and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Board of Directors ordering
the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the Rights then
outstanding by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books of the
Rights Agent or, before the Distribution Date, on the registry books
of the Transfer Agent for the Common Stock. Any notice that 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.
(c) The Board of Directors may, at its option, at any
time after the occurrence of a Triggering Event, exchange all or part
of the then outstanding and exercisable Rights for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other
than the Company or any Subsidiary, or any Person organized, appointed
or established by the Company or any Subsidiary for or pursuant to the
terms of any such plan), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(d) Immediately upon the effective time of the exchange
of the Rights as specified by the action of the Board of Directors
ordering the exchange of any Rights pursuant to Section 23(c) and
without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company 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.
30
34
Any notice that 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
shares of Common Stock for Rights will be effected and, in the event
of any partial exchange, the number of Rights that will be exchanged.
Any partial exchange shall be effected pro rata based on the number of
Rights held by each holder of Rights.
(e) In any exchange pursuant to Section 23(c), the
Company, at its option, may substitute shares of Preferred Stock (or
equivalent shares) for shares of Common Stock exchangeable for Rights,
at the initial rate of one one-hundredth of a share of Preferred Stock
(or equivalent shares) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Stock pursuant to the terms thereof, so that the
fraction of a share of Preferred Stock delivered in lieu of each share
of Common Stock shall have the same voting rights as one share of
Common Stock.
In the event that there shall not be sufficient shares of
Common Stock or shares of Preferred Stock issued but not outstanding
or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 23, the Company shall
take all such action as may be necessary to authorize additional
shares of Common Stock or Preferred Stock for issuance upon exchange
of the Rights.
(f) The Company shall not be required to issue fractions
of shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares
of Common Stock, the Company shall pay to the registered holders of
the Right Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this Section 23(f), the current
market value of a whole share of Common Stock shall be the "current
market price" of a share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the
date of exchange pursuant to Section 23(c) hereof.
Section 24. Notice of Certain Events.
(a) If the Company proposes, at any time after the
Distribution Date, (i) to declare or pay any dividend payable in stock
of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification
of its Preferred Stock (other than a reclassification involving only
the subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with, 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
31
35
more transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other
Person, or (v) to effect the liquidation, dissolution or winding up of
the Company, or (vi) to declare or pay any dividend on the Common
Stock payable in shares of Common Stock or to effect a subdivision,
combination, or consolidation of the Common Stock (by reclassification
or otherwise then by payment of dividends in Common Stock), then, in
each such case, the Company shall give to each holder of a Right
Certificate, to the extent feasible, in accordance with Section 25
hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend 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 shares of Preferred Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days before
the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days before the date of the taking of
such proposed action or the date of participation therein by the
holders of the shares of Preferred Stock, whichever shall be the
earlier.
(b) If the event set forth in Section 11(a)(ii) hereof
occurs, then, in any such case, the Company shall as soon as
practicable thereafter give to each holder of a Right Certificate, to
the extent feasible, in accordance with Section 25 hereof, a notice of
the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.
Section 25. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
NCI Building Systems, Inc.
0000 Xxxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sent by registered or certified
mail and shall be deemed given upon receipt, addressed (until another address
is filed in writing with the Company) as follows:
Xxxxxx Trust and Savings Bank
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxx Xxxxxxxxx
32
36
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 26. Supplements and Amendments. During any period in which
the Rights are redeemable, except for a supplement or amendment that would
change the Redemption Price, Final Expiration Date, Purchase Price, number of
shares of Preferred Stock for which a Right is then exercisable, or if the
rights are not then redeemable, reinstate a right of redemption, at any time
and from time to time, the Company may and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (i) to change any provision of this
Agreement if the Rights are then redeemable, (ii) to cure any ambiguity, (iii)
to correct or supplement any provision contained herein that may be defective
or inconsistent with any other provisions herein, or (iv) to change or
supplement the provisions hereunder in any manner that the Company may deem
necessary or desirable and which does not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person). Upon the delivery of a certificate from
an appropriate officer of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment. Before the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with
the interests of the holders of Common Stock. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Rights Agent under this Agreement will be effective against
the Rights Agent without the execution of such supplement or amendment by the
Rights Agent.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of
shares of Preferred Stock or Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Preferred Stock or Common Stock of which any Person is
the Beneficial Owner, shall be made in accordance with the provisions of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board of the Company, or as may be necessary or
advisable in the administration of this Agreement, including the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not to redeem the Rights or
to amend the Agreement). All such actions, calculations, interpretations, and
determinations (including, for purpose of clause (2) below, all omissions with
respect to the foregoing) that are done
33
37
or made by the Board in good faith, shall (1) be final, conclusive, and binding
on the Company, the Rights Agent, the holders of the Right Certificates and all
other parties, and (2) not subject the Board to any liability to the holders of
the Right Certificates.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, before the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy, or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Right Certificates (and, before the
Distribution Date, registered holders of the Common Stock).
Section 30. Severability. If any term, provision, covenant, or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, or unenforceable, the remainder of the
terms, provisions, covenants, and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired, or
invalidated; provided, however, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant, or restriction is held
by such court or authority to be invalid, void, or unenforceable and the Board
of Directors of the Company determines in its good faith judgment that severing
the invalid language from the Agreement would adversely affect the purpose or
effect of the Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated, and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Section 31. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware applicable to
contracts made and performed entirely within that state, except as to the
rights and obligations of the Rights Agent, which shall be governed by and
construed in accordance with the laws of the State of Illinois.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
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.
[THE NEXT FOLLOWING PAGE IS THE SIGNATURE PAGE.]
34
38
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed as of the date first above written.
NCI BUILDING SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------
Title: V.P. and CFO
----------------------
XXXXXX TRUST AND SAVINGS BANK,
as Rights Agent
By: /s/ Xxx X. Xxxxxxxxx
--------------------------
Name: Xxx X. Xxxxxxxxx
------------------------
Title: Vice President
----------------------
35
39
EXHIBIT A
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
NCI BUILDING SYSTEMS, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
_______________________________
NCI Building Systems, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation in accordance with Section 151 of the General
Corporation Law at a meeting duly called and held on June 24, 1998:
RESOLVED, that, pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (the "Board of Directors" or
the "Board") in accordance with the provisions of the Restated
Certificate of Incorporation, the Board of Directors hereby creates a
series of Preferred Stock, par value $1.00 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 Junior Participating Preferred Stock:
1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock"
(the "Series A Preferred Stock") and the number of shares constituting
the Series A Preferred Stock shall be 600,000.
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 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
Preferred Stock.
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 Preferred Stock with
Exhibit A - Page 1
40
respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of Common Stock, par value $0.01
per share (the "Common Stock"), 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
February, May, August and November 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 Preferred Stock, in an
amount per share (rounded to the nearest cent) equal, subject to the
provision for adjustment hereinafter set forth, to 100 times the
aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A
Preferred Stock. If the Corporation at any time declares or pays any
dividend on the Common Stock payable in shares of Common Stock, or
effects a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Series A Preferred Stock
were entitled immediately before such event shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately before such event.
(b) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in Paragraph
(a) of this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock).
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A 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 before 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 Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall being 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 Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all
such shares at
Exhibit A - Page 2
41
the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days before the
date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Corporation. If the Corporation at any time
declares or pays any dividend on the Common Stock payable in shares of
Common Stock, or effects a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in
each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately before
such event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding
immediately before such event.
(b) Except as otherwise provided herein, in any other
Certificate of Designation creating a series of Preferred Stock or any
similar stock, or by law, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock 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, holders of Series A
Preferred Stock shall have no voting rights.
4. Certain Restrictions.
(a) Whenever dividends or distributions payable on the
Series A 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
Preferred Stock outstanding 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 Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking in parity
(either as to dividends or upon liquidation,
Exhibit A - Page 3
42
dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A 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;
(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 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
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking in parity with the Series A 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 annual
dividend rates and other relative rights and preferences of
the series and classes, shall determine in good faith will
result in fair and equitable treatment among the 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 shares
at such time and in such manner.
5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the
Restated Certificate of Incorporation, in any other Certificate of
Designations creating a series of Preferred Stock or similar stock, or
as otherwise required by law.
6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A 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 Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter
Exhibit A - Page 4
43
set forth, equal to 100 times the aggregate amount to be distributed
per share to holders of shares of Common Stock, or (b) to the holders
of shares of stock ranking in parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A 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 at any
time declares or pays any dividend on the Common Stock payable in
shares of Common Stock, or effects a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately before
such event under the provision in clause (a) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
before such event.
7. Consolidation, Merger, etc. If the Corporation
enters into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash or any other property,
then in any such case each share of Series A 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 or
any other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged. If
the Corporation at any time declares or pays any dividend on the
Common Stock payable in shares of Common Stock, or effects a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, 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 Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that
were outstanding immediately before such event.
8. Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets,
junior to all series and any other class of the Corporation's
Preferred Stock.
10. Amendment. The Restated Certificate of Incorporation
of the Corporation shall not be amended in any manner that would
materially alter or change the powers,
Exhibit A - Page 5
44
preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of
at least a majority of the outstanding shares of Series A Preferred
Stock, voting together as a single series.
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its Vice President and Chief Financial Officer and
attested by its Secretary this 26th day of June, 1998.
NCI BUILDING SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------
Title: V.P. and CFO
--------------------------
[SEAL]
ATTEST:
/s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
----------------------------
Title: Secretary
---------------------------
Exhibit A - Page 6
45
EXHIBIT B
Form of Right Certificate
Certificate No. R___________ ____________ Rights
NOT EXERCISABLE AFTER JUNE 24, 2008, OR EARLIER IF REDEMPTION OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
(SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT), RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS
OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.*
Right Certificate
------------------------
This certifies that ____________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of June 24, 1998 (the "Rights Agreement"),
between NCI Building Systems, Inc., a Delaware corporation (the "Company"), and
Xxxxxx Trust and Savings Bank (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such time is defined in the
Rights Agreement) and before 5:00 p.m., Texas time, on June 24, 2008, at the
offices of the Rights Agent, or at the office of its successor as Rights Agent,
one one-hundredth of a fully paid and nonassessable share of Series A Junior
Participating Preferred
----------------------------
*The portion of the legend in brackets is inserted only if applicable.
Exhibit B - Page 1
46
Stock, par value $1.00 per share (the "Preferred Shares"), of the Company, at a
purchase price of $______ 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 hundredths of a
Preferred Share that may be purchased upon exercise hereof) set forth above,
are the number and the Purchase Price as of ________, 19__, based on the
Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of hundredths of a Preferred Share that 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, which terms, provisions, and conditions are
hereby incorporated herein and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Right Certificates. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and the
offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal offices of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor (except for the
issuance date thereof) 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 entitled such holder to purchase.
If this Right Certificate is 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.
Exhibit B - Page 2
47
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may, but are not required to, be redeemed by the
Company at a redemption price of $0.01 per Right.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement. No holder of
this Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Preferred Shares or of any other
securities of the Company that may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting hereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it has been countersigned by the Rights Agent.
Exhibit B - Page 3
48
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _____________, 19__.
ATTEST: NCI BUILDING SYSTEMS, INC.
By:
--------------------------- -------------------------------------
Secretary Its:
------------------------------------
Countersigned:
----------------------------
By:
-------------------------
Authorized Signature
Exhibit B - Page 4
49
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
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondence in the United States.
----------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
___________________________________
Signature
50
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right Certificate.)
To: NCI BUILDING SYSTEMS, 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 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)
________________________________________________________________________________
Dated: _____________________, ______.
_______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondence in the United States.
---------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
______________________________
Signature
51
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
If the certification set forth above in the Forms of Assignment and
Election is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an Assignment, will affix a legend to that effect on any Right
Certificate issued in exchange for this Right Certificate.
