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EXHIBIT 4
O'CHARLEY'S INC.
AND
FIRST UNION NATIONAL BANK
RIGHTS AGENT
---------------
RIGHTS AGREEMENT
DATED DECEMBER 8, 2000
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions...............................................................1
Section 2. Appointment of Rights Agent.......................................................4
Section 3. Issue of Rights Certificates......................................................4
Section 4. Form of Rights Certificates.......................................................6
Section 5. Countersignature and Registration.................................................7
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates.....................................7
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights.....................8
Section 8. Cancellation and Destruction of Rights Certificates..............................10
Section 9. Reservation and Availability of Capital Stock....................................10
Section 10. Preferred Stock Record Date......................................................11
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights.................................................................11
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......................18
Section 13. Share Exchange, Merger or Sale or Transfer of Assets or Earning Power............19
Section 14. Fractional Rights and Fractional Shares..........................................21
Section 15. Rights of Action.................................................................22
Section 16. Agreement of Rights Holders......................................................23
Section 17. Rights Certificate Holder Not Deemed a Shareholder...............................23
Section 18. Concerning the Rights Agent......................................................24
Section 19. Merger or Share Exchange or Change of Name of Rights Agent.......................24
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Section 20. Duties of Rights Agent...........................................................25
Section 21. Change of Rights Agent...........................................................27
Section 22. Issuance of New Rights Certificates..............................................28
Section 23. Redemption and Termination.......................................................29
Section 24. Exchange.........................................................................29
Section 25. Notice of Certain Events.........................................................31
Section 26. Notices..........................................................................32
Section 27. Supplements and Amendments.......................................................32
Section 28. Successors.......................................................................33
Section 29. Determinations and Actions by the Board of Directors, etc........................33
Section 30. Benefits of this Agreement.......................................................33
Section 31. Severability.....................................................................33
Section 32. Governing Law....................................................................34
Section 33. Counterparts.....................................................................34
Section 34. Descriptive Headings.............................................................34
Exhibit A Form of Rights Certificate
Exhibit B Form of Summary of Rights
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated this 8th day of December, 2000 (the
"Agreement"), between O'Charley's Inc., a Tennessee corporation (the "Company"),
and First Union National Bank (the "Rights Agent").
WHEREAS, on December 8, 2000 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a distribution of
one Right for each share of common stock of the Company, no par value per share,
(the "Company Common Stock") outstanding at the Close of Business on December
27, 2000 (the "Record Date"), subject to the execution of this Agreement and to
certain other matters, and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant hereto) for each share of Company
Common Stock issued between the Record Date and the Distribution Date, each
Right initially representing the right to purchase upon the terms and subject to
the conditions hereinafter set forth one Unit of Series A Junior Preferred Stock
(the "Right" or collectively, the "Rights");
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 (other than the Company,
any Subsidiary of the Company, any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with respect to
such plan acting in such capacity) that shall be the Beneficial Owner of 18% or
more of the shares of Company Common Stock then outstanding. If the Board of
Directors of the Company determines that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently and in good faith or without
knowledge of the terms of this Agreement, and such Person divests as promptly as
practicable (but in no event more than thirty (30) days following notification
of its status as an "Acquiring Person" or such shorter period as may be
determined by the Board of Directors) a sufficient number of shares of Company
Common Stock so that such Person would no longer, as of the expiration of such
divestiture period, be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement. Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Company Common Stock by the Company that, by reducing the number
of shares of Company Common Stock outstanding, increases the proportionate
number of shares of Company Common Stock beneficially owned by such Person
(alone or together with all affiliates and associates) to 18% or more of the
shares of Company Common Stock then outstanding; provided, however, that if a
Person (together with its Affiliates and Associates) becomes the Beneficial
Owner of 18% or more of the shares of Company Common Stock then outstanding by
reason of share purchases by the Company, and such Person (or an Affiliate or
Associate) subsequently becomes the Beneficial
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Owner of any additional share of Company Common Stock, then such Person shall be
deemed to be an "Acquiring Person."
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is considered to be a "beneficial owner" under Rule 13d-3 of the
General Rules and Regulations under the Exchange Act (the "Exchange Act
Regulations") as in effect on the date hereof; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (i) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding (A) arises solely from a revocable proxy given in response to a
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the Exchange Act and the Exchange Act Regulations, and
(B) is not reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report);
(ii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate of such other Person) 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 proviso to subparagraph (i) of this paragraph (c)) or disposing
of such securities; or
(iii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time or upon the
satisfaction of conditions) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or otherwise;
provided, however, that under this paragraph (c) a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A) 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, (B) securities that may be issued upon exercise of
Rights at any time prior to the occurrence of a Triggering Event, or (C)
securities that may be issued upon exercise of Rights from and after the
occurrence of a Triggering Event, which Rights were acquired by such Person or
any of such Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof (the "Original Rights") or
pursuant to Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights.
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(d) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in Nashville, Tennessee 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.,
Nashville, Tennessee time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Nashville, Tennessee time, on the
next succeeding Business Day.
(f) "Common Stock" of any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or, if such Person
shall have no capital stock, the equity securities or other equity interest
having power to control or direct the management of such Person.
(g) "Company Common Stock" shall mean the common stock of the Company,
no par value per share.
(h) "Distribution Date" has the meaning set forth in Section 3(a).
(i) "Exchange Ratio" has the meaning set forth in Section 24(a).
(j) "Expiration Date" has the meaning set forth in Section 7(a).
(k) "Person" shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange
Act.
(l) "Preferred Stock" shall mean the Series A Junior Preferred Stock, no
par value per share, of the Company having the voting powers, designation,
preferences and relative, participating, optional or other special rights and
qualifications, limitations and restrictions described in the Company's Restated
Charter.
(m) "Purchase Price" has the meaning set forth in Section 7(b).
(n) "Record Date" shall mean December 27, 2000.
(o) "Right" has the meaning set forth in the Whereas Clause.
(p) "Rights Certificate" has the meaning set forth in Section 3(a).
(q) "Rights Dividend Declaration Date" shall mean December 8, 2000.
(r) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii) hereof.
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(s) "Section 13 Event" shall mean any event described in clause (x), (y)
or (z) of Section 13(a) hereof.
(t) "Stock Acquisition Date" shall mean the first date of public
announcement (including, without limitation, the filing of any report pursuant
to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such (unless such date has occurred inadvertently
as contemplated by the second sentence of the definition of "Acquiring Person"
in Section 1(a) hereof, in which case the Stock Acquisition Date shall be
postponed until determination of such Person's status on the expiration of the
divestiture period).
(u) "Subsidiary" shall mean, with reference to any Person, any
corporation, partnership or other entity of which an amount of voting securities
sufficient to elect at least a majority of the directors or managers of such
corporation, partnership or other entity is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.
(v) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(w) "Unit" has the meaning set forth in Section 7(b).
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company 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. The Rights Agent shall have no duty to supervise, and
shall in no event be liable for, the acts or omissions of any such Co-Rights
Agent. In the event the Company appoints one or more Co-Rights Agents, the
respective duties of the Rights Agent and any Co-Rights Agents will be as the
Company may determine.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth day
after the Stock Acquisition Date, and (ii) the Close of Business on the tenth
day (or such later date as may be determined by the Board of Directors prior to
such time as any Person becomes an Acquiring Person) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan maintained by the Company or any of
its Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity) is first published or sent or given within the meaning of Rule
14d-4(a) of the Exchange Act Regulations, if upon consummation thereof such
Person would be the Beneficial Owner of 18% or more of the shares of Company
Common Stock then outstanding (the earlier of (i) and (ii) above being the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for shares of
Company Common Stock registered in the names of the holders of shares of Company
Common Stock as of and subsequent to the Record Date (which certificates for
shares of Company Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the
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transfer of the underlying shares of Company Common Stock (including a transfer
to the Company). As soon as practicable after the Distribution Date, the Rights
Agent will send by first-class, insured, postage prepaid mail, to each record
holder of shares of Company 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, in substantially the form of Exhibit A
hereto (the "Rights Certificates"), evidencing one Right for each share of
Company Common Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Company Common
Stock has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock, in a form
that may be appended to certificates that represent shares of Company Common
Stock in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of shares
of Company 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.
(c) Rights shall, without any further action, be issued in respect of
all shares of Company Common Stock that are outstanding on the Record Date and
that are issued after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. Certificates representing such shares
of Company Common Stock issued after the Record Date 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 O'Charley's
Inc. (the "Company") and First Union National Bank (the "Rights Agent"),
dated December 8, 2000 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal office of the stock transfer administration office of
the Rights Agent. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of the Rights Agreement,
as in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to, or held by, any Person
who is, was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, may become null and void."
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With respect to certificates representing shares of Company Common Stock
(whether or not such certificates include the foregoing legend or have appended
to them the Summary of Rights), until the earlier of (i) the Distribution Date
or (ii) the Expiration Date, the Rights associated with the shares of Company
Common Stock represented by such certificates shall be evidenced by such
certificates alone and registered holders of the shares of Company 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 shares of Company Common Stock represented by such
certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase,
assignment and certificate to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit A hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or any rule or regulation thereunder 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 Rights Certificates, whenever distributed, shall be dated
as of the Record Date and on their face shall entitle the holders thereof to
purchase such number of Units of Preferred Stock as shall be set forth therein
at the price set forth therein, but the amount and type of securities, cash or
other assets that may be acquired upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto 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 of any such
Associate or Affiliate) that becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and that receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding either the transferred Rights,
shares of Company Common Stock or (B) a transfer that the Board of Directors has
determined to be part of a plan, arrangement or understanding that has as a
primary purpose or effect the avoidance of Section 7(e) hereof shall, upon the
written direction of the Board of Directors, contain (to the extent feasible),
the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly,
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this Rights Certificate and the Rights represented hereby may become
null and void in the circumstances specified in Section 7(e) of such
Agreement.
Section 5. Countersignature and Registration.
(a) Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, Chief Executive Officer, President or one of its Vice
Presidents and shall be attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Rights Certificates
may be manual or facsimile. Rights Certificates bearing the manual or facsimile
signatures of the individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the countersignature of such
Rights Certificates or did not hold such offices at the date of such Rights
Certificates. No Rights Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose unless there appears on such Rights
Certificate a countersignature duly executed by the Rights Agent by manual
signature of an authorized officer, and such countersignature upon any Rights
Certificate shall be conclusive evidence, and the only evidence, that such
Rights Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its office designated for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14 hereof, at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase
a like number of Units of Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Certificates
to be transferred, split up, combined or exchanged at the 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 Rights Certificate until the registered holder shall have
completed the certificate set forth in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) of the
Rights represented by such Rights Certificate or Affiliates or Associates
thereof as the Company shall reasonably request; whereupon the Rights Agent
shall, subject to the provisions of Section 4(b),
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Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested.
(b) If a Rights Certificate shall be mutilated, lost, stolen or
destroyed, upon request by the registered holder of the Rights represented
thereby, there shall be issued, in exchange for and upon cancellation of the
mutilated Rights Certificate, or in substitution for the lost, stolen or
destroyed Rights Certificate, a new Rights Certificate, in substantially the
form of the prior Rights Certificate, of like tenor and representing the
equivalent number of Rights, but in the case of loss, theft or destruction, only
upon receipt of evidence satisfactory to the Company and the Rights Agent of
such loss, theft or destruction of such Rights Certificate and, if requested by
the Company or the Rights Agent, indemnity also satisfactory to it.
Section 7. Exercise of Rights, Purchase Price; Expiration Date of
Rights.
(a) Prior to the earlier of (i) the Close of Business on the tenth
anniversary hereof (the "Final Expiration Date"), or (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the earlier of (i) and
(ii) being the "Expiration Date"), the registered holder of any Rights
Certificate may, subject to the provisions of Section 7(e) hereof, exercise the
Rights evidenced thereby (except as otherwise provided herein including, without
limitation, the restriction on exercisability set forth in Section 23(a) hereof)
in whole or in part at any time after the Distribution Date upon surrender of
the Rights Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at
the office of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price (as hereinafter defined) for the number
of Units of Preferred Stock (or, following a Triggering Event, Company Common
Stock, other securities, cash or other assets, as the case may be) for which
such surrendered Rights are then exercisable.
(b) The purchase price for each one one-thousandth of a share (each such
one one-thousandth of a share being a "Unit") of Preferred Stock upon exercise
of the Rights shall be $80.00, subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof (such purchase price, as so adjusted,
being the "Purchase Price"), and shall be payable in accordance with paragraph
(c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation organized under
the laws of the United States or any State of the United States 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 (which
corporation may be a Subsidiary of the Company) (such institution being the
"Depositary Agent") certificates representing the shares of Preferred Stock that
may be acquired upon exercise of the Rights and shall cause such Depositary
Agent to enter into an agreement pursuant to which the Depositary Agent shall
issue receipts representing interests in the shares of Preferred Stock so
deposited. Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the
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Purchase Price for the Units of Preferred Stock (or, following a Triggering
Event, other securities, cash or other assets, as the case may be) to be
purchased thereby as set forth below and an amount equal to any applicable
transfer tax or evidence satisfactory to the Company of payment of such tax, the
Rights Agent shall, subject to Section 20(j) hereof, thereupon promptly (i)
requisition from the Depositary Agent depositary receipts representing such
number of Units of Preferred Stock as are to be purchased and the Company will
direct the Depositary Agent to comply with such request, (ii) requisition from
the Company the amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such cash, if
any, to or upon the order of the registered holder of such Rights Certificate.
In the event that the Company is obligated to issue Company Common Stock, other
securities of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such Company Common Stock, other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate. The
payment of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) may be made in cash or by certified or bank check or bank
draft payable to the order of the Company.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights Agent
and delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) 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 of any such Associate or
Affiliate) that becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) that becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and that receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person (or any
such Associate or Affiliate) to holders of equity interests in such Acquiring
Person (or any such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or such Associate or Affiliate) has any continuing agreement,
arrangement or understanding regarding the transferred Rights, shares of Company
Common Stock or the Company (B) a transfer that the Board of Directors has
determined to be part of a plan, arrangement or understanding that has as a
primary purpose or effect the avoidance of this Section 7(e), shall be null and
void without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights or any other
Person as a result of its failure to make any determination under this Section
7(e) or such Section 4(b) with respect to an Acquiring Person or its Affiliates,
Associates or transferees.
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(f) Notwithstanding anything in this Agreement or any Rights Certificate
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 by such registered holder unless such registered holder
shall have (i) completed and executed the certificate following the form of
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company shall (i) at all times prior to the Expiration Date
cause to be reserved and kept available out of its authorized and unissued
shares of preferred stock, the number of shares of Preferred Stock that, as
provided in this Agreement, will be sufficient to permit the exercise in full of
all outstanding Rights in accordance with Section 7 and (ii) at all times
following the occurrence of a Section 11(a)(ii) Event, shall so reserve and keep
available a sufficient number of any other securities that may be required to
permit the exercise in full of the Rights pursuant to this Agreement.
(b) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance with Section 11(a)(iii) hereof of the consideration to be
delivered by the Company upon exercise of the Rights or, if so required by law,
as soon as practicable following the Distribution Date (such date being the
"Registration Date"), to file a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities that may be acquired upon exercise of the Rights (the
"Registration Statement"), (ii) to cause the Registration Statement to become
effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement, and (B) the Expiration Date, and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that
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any acquisition of securities upon exercise of the Rights complies with any
applicable state securities or "blue sky" laws.
(c) The Company shall take such action as may be necessary to ensure
that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and fully
paid and nonassessable.
(d) The Company shall pay any documentary, stamp or transfer tax imposed
in connection with the issuance or delivery of the Rights Certificates or upon
the exercise of Rights; provided, however, the Company shall not be required to
pay any such tax imposed in connection with the issuance or delivery of Units of
Preferred Stock, or any certificates or depositary receipts for such Preferred
Stock (or, following the occurrence of a Triggering Event, any other securities,
cash or assets, as the case may be) to any person other than the registered
holder of the Rights Certificates evidencing the Rights surrendered for
exercise. The Company shall not be required to issue or deliver any certificates
or depositary receipts for Units of Preferred Stock (or, following the
occurrence of a Triggering Event, any other securities, cash or assets, as the
case may be) to, or in a name other than that of, the registered holder upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for shares of Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) 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, following the occurrence of a Triggering Event, other
securities) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock (or, following the occurrence
of a Triggering Event, other securities) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
securities on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock (or, following the occurrence of a Triggering
Event, other securities) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a shareholder of the Company with respect
to securities for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
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(a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a share exchange 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), the Purchase Price
in effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of Preferred Stock or capital stock, as the case may be, issuable
on such date upon exercise of the Rights, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the aggregate number
and kind of shares of Preferred Stock or capital stock, as the case may be,
that, if such Right had been exercised immediately prior to such date, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. 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 prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event that any
Person shall become an Acquiring Person, other than pursuant to any transaction
set forth in Section 13(a) hereof, then, promptly following the occurrence of
such event (a "Section 11(a)(ii) Event") (except as provided below and in
Section 7(e) hereof) each such holder shall have the right to receive, upon
exercise thereof at a price equal to the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of the number of Units of
Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, such number of shares of Company Common
Stock as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of Units of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event (such product thereafter being, for all purposes of this Agreement other
than Section 13 hereof, the "Purchase Price"), and (y) dividing that product by
50% of the then current market price (determined pursuant to Section 11(d)
hereof) per share of Company Common Stock on the date of such first occurrence
(such shares or number of shares being the "Adjustment Shares").
(iii) In the event that the number of shares of Company Common Stock
that are authorized by the Company's charter but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, by a vote of the Board of
Directors, shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess being the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for such Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) other equity securities of the Company (such other equity
securities being referred to as "capital stock equivalents"), (4) debt
securities of the Company, (5) other assets, or (6)
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any combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors,
after receiving advice from a nationally recognized investment banking firm;
provided, however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date
on which the Company's right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, shares of Company Common Stock (to the extent available), "capital stock
equivalents," and then, if necessary, cash, which shares or "capital stock
equivalents," and/or cash shall have an aggregate value equal to the Spread. To
the extent that the Company determines that some action need be taken pursuant
to the first sentence of this Section 11(a)(iii), the Company shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights. For purposes of this Section 11(a)(iii), the value of the
Company Common Stock shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of Company Common Stock on the Section
11(a)(ii) Trigger Date and the value of any "capital stock equivalent" shall be
deemed to have the same value as the Company Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five calendar days
after such record date) shares of Preferred Stock (or shares having the same
rights, privileges and preferences as shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock or per share of
equivalent preferred stock (or having a conversion price per share, if a
security convertible into Preferred Stock or equivalent preferred stock) less
than the current market price (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 prior to such record date by a fraction, the
numerator of which shall be the sum of the number of shares of Preferred Stock
outstanding on such record date plus the number of shares of Preferred Stock
that the aggregate offering price of the total number of shares of Preferred
Stock and/or equivalent preferred stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which shall be the
number of shares of Preferred Stock outstanding on such record date plus the
number of additional shares of Preferred Stock and/or equivalent preferred stock
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or all of which
may be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by
or held for the account of the Company or any Subsidiary 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
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in the event that 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) In case the Company shall fix a record date for a distribution to
all holders of shares of Preferred Stock (including any such distribution made
in connection with a share exchange or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in shares of Preferred Stock but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current market
price (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, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights) 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 in the event that 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, the "current market
price" per share of the Company Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such shares for the ten
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, if prior to the expiration of such requisite
ten Trading Day period the issuer announces either (A) a dividend or
distribution on such shares payable in such shares or securities convertible
into such shares (other than the Rights), or (B) any subdivision, combination or
reclassification of such shares, then, following the ex-dividend date for such
dividend or the record date for such subdivision, as the case may be, the
"current market price" shall be properly adjusted to take into account such
event. The closing price for each day shall be, if the shares are listed and
admitted to trading on a national securities exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such shares are
listed or admitted to trading or, if such shares are not listed or admitted to
trading on any national securities exchange, the last quoted sales 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 such shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such shares selected by the Board
of Directors. If on any such date no market maker is making a market in such
shares, the fair value of such shares on such date as determined in good faith
by a majority of the Board of Directors shall be used. If such shares are not
publicly held or not so listed or traded, "current market price" per share shall
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mean the fair value per share as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. The term "Trading Day"
shall mean regular trading hours on a Business Day or, if such shares are listed
or admitted to trading on any national securities exchange, a day on which the
principal national securities exchange on which such shares are listed or
admitted to trading is open for the transaction of business.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the same
manner as set forth above for the Company Common Stock in clause (i) of this
Section 11(d) (other than the fourth sentence thereof). If the current market
price per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the "current market price"
per share of Preferred Stock shall be conclusively deemed to be an amount equal
to 1000 (as such amount may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to Company Common
Stock occurring after the date of this Agreement) multiplied by the current
market price per share of the Company Common Stock. If neither the Company
Common Stock nor Preferred Stock is publicly held or so listed or traded,
"current market price" per share of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Board of Directors whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. For all
purposes of this Agreement, the "current market price" of a Unit of Preferred
Stock shall be equal to the "current market price" of one share of Preferred
Stock divided by 1000.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments 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 of Company Common
Stock or Common Stock or other share or one-millionth of a share of Preferred
Stock, as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction that mandates
such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Sections 11(a)(ii)
or 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k), and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.
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(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units of Preferred Stock
(or other securities or amount of cash or combination thereof) that may be
acquired from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Units of Preferred
Stock (or other securities) (calculated to the nearest one-millionth of a share)
obtained by (i) multiplying (x) the number of Units of Preferred Stock (or other
securities) covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of Units of Preferred Stock (or other securities) that may be acquired
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 Units
of Preferred Stock (or other securities) for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least ten days later than the
date of such public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates to be so
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 Rights
Certificates on the record date specified in the public announcement.
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(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Units of Preferred Stock (or other securities) issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per Unit and the number of
Units of Preferred Stock that was expressed in the initial Rights Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value of the number of Units 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 such fully paid and nonassessable number
of Units of Preferred Stock (or other securities) 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
of that number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the current market price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities 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 holders or shall reduce the taxes payable by such holders.
(n) The Company shall not, at any time after the Distribution Date, (i)
effect a share exchange with any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction, or a series
of transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such share exchange, merger or sale
there are any
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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 or (y) prior to, simultaneously with or
immediately after such share exchange, merger or sale, the Person that
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have distributed or otherwise transferred to its shareholders
or other persons holding an equity interest in such Person Rights previously
owned by such Person or any of its Affiliates and Associates; provided, however,
this Section 11(n) shall not affect the ability of any Subsidiary of the Company
to effect a share exchange with, merge with or into, or sell or transfer assets
or earning power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 27 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Company Common Stock payable in shares of Company Common
Stock, (ii) subdivide the outstanding shares of Company Common Stock, (iii)
combine the outstanding shares of Company Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock in a reclassification of
Company Common Stock (including any such reclassification in connection with a
share exchange or merger in which the Company is not the continuing or surviving
corporation), the number of Rights associated with each share of Company Common
Stock then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Company Common Stock following
any such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Company Common Stock immediately prior to
such event by a fraction the numerator of which shall be the total number of
shares of Company Common Stock outstanding immediately prior to the occurrence
of the event and the denominator of which shall be the total number of shares of
Company Common Stock outstanding immediately following the occurrence of such
event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Company Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Company Common Stock) in accordance with Section 26 hereof. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such Adjustment unless and until it shall have received such certificate.
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Section 13. Share Exchange, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Stock Acquisition Date, directly or
indirectly, either (x) the Company shall effect a share exchange with, or merge
with and into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), and the Company shall not
be the continuing or surviving corporation of such share exchange or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) shall effect a share exchange with, or merge
with or into, the Company, and the Company shall be the continuing or surviving
corporation of such share exchange or merger and, in connection with such share
exchange or merger, all or part of the outstanding shares of Company Common
Stock shall be converted into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer) to any Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), 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) (any such event being a "Section 13 Event"), then, and in
each such case, proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price,
such number of validly authorized and issued, fully paid and nonassessable
shares of Common Stock of the Principal Party (as such term is hereinafter
defined), which shares shall not be subject to any liens, encumbrances, rights
of first refusal, transfer restrictions or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then current Purchase Price
by the number of Units of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the number of such Units for which a Right would be
exercisable hereunder but for the occurrence of such Section 11(a)(ii) Event by
the Purchase Price that would be in effect hereunder but for such first
occurrence) and dividing that product (which, following the first occurrence of
a Section 13 Event, shall be the "Purchase Price" for all purposes of this
Agreement) 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 Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof
shall apply only to such Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such transaction as may
be necessary to ensure that the provisions of this Agreement shall thereafter be
applicable to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no further effect following the first occurrence of any Section 13 Event.
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(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), (A) the Person that is the issuer of any
securities into which shares of Company Common Stock are converted in such
merger or share exchange, or, if there is more than one such issuer, the issuer
of Common Stock that has the highest aggregate current market price (determined
pursuant to Section 11(d) hereof); and (B) if no securities are so issued, the
Person that is the other party to such merger or share exchange, or, if there is
more than one such Person, the Person the Common Stock of which has the highest
aggregate current market price (determined pursuant to Section 11(d) hereof);
and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
largest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof); 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 ("Registered Common Stock"), or
such Person is not a corporation, and such Person is a direct or indirect
Subsidiary of another Person that has Registered Common Stock outstanding,
"Principal Party" shall refer to such other Person; (2) if the Common Stock of
such Person is not Registered Common Stock or such Person is not a corporation,
and such Person is a direct or indirect Subsidiary of another Person but is not
a direct or indirect Subsidiary of another Person that has Registered Common
Stock outstanding, "Principal Party" shall refer to the ultimate parent entity
of such first-mentioned Person; (3) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and one or more of
such other Persons has Registered Common Stock outstanding, "Principal Party"
shall refer to whichever of such other Persons is the issuer of the Registered
Common Stock having the highest aggregate current market price (determined
pursuant to Section 11(d) hereof); and (4) if the Common Stock of such Person is
not Registered Common Stock or such Person is not a corporation, and such Person
is directly or indirectly controlled by more than one Person, and none of such
other Persons have Registered Common Stock outstanding, "Principal Party" shall
refer to whichever ultimate parent entity is the corporation having the greatest
stockholders equity or, if no such ultimate parent entity is a corporation,
shall refer to whichever ultimate parent entity is the entity having the
greatest net assets.
(c) The Company shall not consummate any such share exchange, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock that have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with Section
13, and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms
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set forth in paragraphs (a) and (b) of this Section 13 and further providing
that the Principal Party will:
(i)(A) file on an appropriate form, as soon as practicable following
the execution of such agreement, a registration statement under the Securities
Act with respect to the Common Stock that may be acquired upon exercise of the
Rights, (B) cause such registration statement to remain effective (and to
include a prospectus complying with the requirement of the Securities Act) until
the Expiration Date, and (C) as soon as practicable following the execution of
such agreement, take such action as may be required to ensure that any
acquisition of such Common Stock upon the exercise of the Rights complies with
any applicable state security or "blue sky" laws; and
(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.
(d) In case the Principal Party that is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its charter or bylaws or other instrument governing its
corporate affairs, which provision would have the effect of (i) causing such
Principal Party to issue, in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then current market price per
share (determined pursuant to Section 11(d) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then current market price (other than to holders of Rights pursuant to this
Section 13) or (ii) providing for any special payment, tax or similar provisions
in connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13; then, in such event, the Company shall
not consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or share exchanges or mergers or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights 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 Rights Certificates that evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the Persons to which such fractional
Rights would otherwise be issuable, an amount in cash equal to such fraction of
the market value of a whole Right. For purposes of this Section 14(a), the
market
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value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be,
if the Rights are listed or admitted to trading on a national securities
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 sales price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors shall be used and such determination shall be described
in a statement filed with the Rights Agent and the holders of the Rights.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions that are integral multiples of one
one-thousandth of a share of Preferred Stock) (or other securities) upon
exercise of the Rights or to distribute certificates that evidence such
fractional shares of Preferred Stock (other than fractions that are integral
multiples of one one-thousandth of a share of Preferred Stock) (or other
securities). In lieu of such fractional shares of Preferred Stock that are not
integral multiples of one one-thousandth of a share (or other securities), the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the then current market value of one one-thousandth of a share of
Preferred Stock (or other securities). For purposes of this Section 14(b), the
current market value of one one-thousandth of a share of Preferred Stock (or
other securities) shall be the closing price of one one-thousandth of a share of
Preferred Stock (or other securities) (as the term "closing price" is used in
Section 11(d) hereof) for the Trading Day immediately prior to 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 permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of a certificate representing shares of Company Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company or any
other Person to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in
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the manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be transferable
only in connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Company Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Company Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary; and
(d) notwithstanding anything to the contrary, neither the Company nor
the Rights Agent shall have any liability to any holder of a Right or any other
Person as a result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as promptly as practicable.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of 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 Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a shareholder of
the Company or any right to vote for the
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election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or,
except as provided in Section 25 hereof, to receive notice of meetings or other
actions affecting shareholders, or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses, including reasonable
fees and disbursements of its counsel, incurred in connection with the execution
and administration of this Agreement and the exercise and performance of its
duties hereunder. The Company shall indemnify the Rights Agent, its directors,
officers, employees and agents for, and hold each of them harmless against, any
losses, expenses, claims, damages or liabilities incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent or such other indemnified party in
connection with the acceptance and administration of this Agreement and
performance hereunder, including without limitation the costs and expenses of
defending against any claim of liability therefrom, directly or indirectly and
will promptly reimburse the Rights Agent for legal and other expenses reasonably
incurred in defending any such loss, expense, claim, damage or liability.
(b) The Rights Agent shall be protected by the indemnity provided by
this Section and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate for Company
Common Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document believed by it to be
genuine and to have been signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons.
(c) The indemnity provided in this Section 18 shall survive the
expiration of the Rights, the resignation or removal of the Rights Agent and the
termination of this Agreement.
Section 19. Merger or Share Exchange 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 effect a share exchange, or any
corporation resulting from any merger or share exchange to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or shareholder services businesses 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 document or
any further act on the part of any of the parties hereto; provided, however,
that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights
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Agent shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such advice
or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be specified herein) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of
the Board, the Chief Executive Officer, 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; provided, however, that so long
as any Person is an Acquiring Person hereunder, such certificate shall be signed
and delivered by the Board of Directors; 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 not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
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(d) The Rights Agent shall not have any responsibility for the validity
or legality of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or for the validity, legality or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or failure
by the Company to satisfy conditions contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after receipt by the Rights
Agent of the certificate describing any such adjustment contemplated by Section
12); 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 Company Common
Stock or any other securities to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Company Common Stock or any
other securities will, when so issued, be validly authorized and issued, fully
paid and nonassessable.
(e) The Company shall perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Rights Agent for
the performance by the Rights Agent of its duties under this Agreement.
(f) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, 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 to the
Company, the holder of any Rights Certificate or any shareholder of the Company
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in acting while awaiting
instructions; provided, however, that so long as any Person is an Acquiring
Person hereunder, the Rights Agent shall accept such instructions and advice
only from the Board of Directors and shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with such instructions of
the Board of Directors. 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 such 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.
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(g) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or offer
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.
(h) 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 if the Rights Agent was not grossly negligent in the
selection and continued employment thereof.
(i) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of its rights hereunder if
the Rights Agent in its sole judgment shall have reasonable grounds for
believing that repayment of such funds or adequate indemnification against such
risk or liability is not reasonably assured to it.
(j) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with the
Company. If such certificate has been completed and signed, the Rights Agent may
assume without further inquiry that the Rights Certificate is not owned by a
person described in Section 4(b) or Section 7(e) hereof and shall not be charged
with any knowledge to the contrary.
(k) The Rights Agent undertakes only the express duties and obligations
imposed on it by this Agreement and no implied duties or obligations shall be
read into this Agreement against the Rights Agent.
(l) Anything in this Agreement to the contrary notwithstanding, 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).
(m) The Rights Agent shall be liable hereunder to the Company and any
other Person only for a loss which is a result of or caused by the Rights
Agent's gross negligence or willful misconduct.
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 days' notice in
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writing mailed to the Company, and to each transfer agent of the Preferred Stock
and the Company Common Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon thirty 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 and the Company Common
Stock, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States or any state of the United States in good standing and may
be the Company or a Subsidiary of the Company. 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 the Company Common Stock, and
mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by the Board of Directors to reflect any adjustment or change
made in accordance with the provisions of this Agreement in the Purchase Price
or the number or kind or class of shares or other securities or property that
may be acquired under the Rights Certificates. In addition, in connection with
the issuance or sale of shares of Company Common Stock following the
Distribution Date and prior to the Expiration Date, the Company (a) shall, with
respect to shares of Company Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Rights Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
person to whom such Rights Certificate would be issued, and
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(ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) Subject to Section 31 hereof, the Company may, at its option, by
action of the Board of Directors, at any time prior to the earlier of (i) the
Close of Business on the tenth day following the Stock Acquisition Date, or (ii)
the Final Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.001 per Right, as such amount may
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being the
"Redemption Price"), and the Company may, at its option, by action of the Board
of Directors, pay the Redemption Price either in shares of Company Common Stock
(based on the "current market price," as defined in Section 11(d) hereof, of the
shares of Company Common Stock at the time of redemption) or cash; provided that
if the Company elects to pay the Redemption Price in shares of Company Common
Stock, the Company shall not be required to issue fractional shares of Company
Common Stock. In lieu of such fractional shares of Company Common Stock, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares of Company Common Stock would otherwise
be issuable an amount of cash equal to the same fraction of the current per
share market price of a whole share of Company Common Stock. Notwithstanding
anything in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights, evidence of which shall be 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 then outstanding Rights by mailing such notice to all
such holders at each holder's last address as it appears upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for Company 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. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section 23
or in Section 24 hereof and other than in connection with the purchase of shares
of Company Common Stock prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable
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Rights (which shall not include Rights that have become void pursuant to
provisions of Section 7(e) hereof) for Company Common Stock at an exchange ratio
of one share of Company 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 of the
Company shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding
Company Common Stock for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of fifty percent (50%) or more of the Company Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Company 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 Company. 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 Company 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 (other than Rights that have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Company Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional shares of
Company Common Stock for issuance upon exchange of the Rights. In the event that
the Company shall, after good faith effort, be unable to take all such action as
may be necessary to authorize such additional shares of Company Common Stock,
the Company shall substitute, for each share of Company Common Stock that would
otherwise be issuable upon exchange of a Right, a number of shares of Preferred
Stock or fraction thereof such that the current per share market price of one
share of Preferred Stock multiplied by such number or fraction is equal to the
current per share market price of one share of Company Common Stock as of the
date of issuance of such shares of Preferred Stock or fraction thereof.
(d) The Company shall not be required to issue fractional shares of
Company Common Stock or to distribute certificates that evidence fractional
shares of Company Common Stock. In lieu of such fractional shares of Company
Common Stock, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of Company Common
30
34
Stock would otherwise be issuable an amount in cash equal to the same fraction
of the current per share market price of a whole share of Company Common Stock.
For the purposes of this paragraph (d), the current market price of a whole
share of Company Common Stock shall be the closing price of a share of Company
Common Stock (as determined pursuant to Section 11(d) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), (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, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), (iv) to effect any share exchange or merger into or
with any other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or 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 Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
or (v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, share exchange, 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 prior to
the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Preferred Stock
whichever shall be the earlier; provided, however, no such notice shall be
required pursuant to this Section 25, if any Subsidiary of the Company effects a
share exchange or merger with or into, or effects a sale or other transfer of
assets or earnings power to, any other Subsidiary of the Company.
(b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26 hereof, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof.
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35
Section 26. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including by
telex, telegram or facsimile) and mailed or sent or delivered, if to the
Company, at its address at:
O'Charley's Inc.
0000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
And if to the Rights Agent, at its address at:
First Union National Bank
0000 Xxxx X.X. Xxxxxx Xxxxxxxxx, 0X0
Xxxxxxxxx, XX 00000-0000
Attention: Shareholder Services Group
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Rights Agent or, if prior to
the Distribution Date on the registry books of the transfer agent for Company
Common Stock.
Section 27. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Company Common Stock; provided, however, that any
supplement or amendment that changes the rights, duties, liabilities, and
indemnification of the Rights Agent under this Agreement shall be effective only
with the consent of the Rights Agent. From and after the Distribution Date and
subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein that may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner that the Company may deem
necessary or desirable and that shall be consistent with, and for the purpose of
fulfilling, the objectives of the Board of Directors adopting this Agreement;
provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner that would
adversely affect the interests of the holders of Rights, and provided, however,
this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) subject to Section 31 hereof, a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
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benefits to, the holders of Rights. Without limiting the foregoing, the Company
may at any time prior to such time as any Person becomes an Acquiring Person
amend this Agreement to change the Purchase Price hereunder. Upon the delivery
of a certificate from an appropriate officer of the Company or, so long as any
Person is an Acquiring Person hereunder, from the Board of Directors that states
that the proposed supplement or amendment is in compliance with the terms of
this Section 27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made that changes the Redemption Price, the
Purchase Price, the Expiration Date or the number of Units of Preferred Stock
for which a Right is exercisable without the approval of a majority of the Board
of Directors. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Company
Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Company Common Stock outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of Company
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, 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 Directors or to the Company, or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power (i) to interpret the
provisions of this Agreement, and (ii) to make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board of Directors or any
member thereof to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable,
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37
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 determines in its good faith judgment
that severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement and the Rights shall not then be
redeemable, 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 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of Tennessee applicable to contracts executed in and
to be performed entirely in such State.
Section 33. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same instrument.
Section 34. Descriptive Headings. The headings contained in this
Agreement are for descriptive purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
[Remainder of page left intentionally blank; signature page follows]
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38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
O'CHARLEY'S INC.
By: /s/ A. Xxxx Xxxxxxxx
--------------------------------------
Name: A. Xxxx Xxxxxxxx
Title: Chief Financial Officer, Secretary
and Treasurer
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Corporate Trust Officer
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39
EXHIBIT A
[Form of Rights Certificate]
Certificate No. _________ __________ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS
AGREEMENT). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
ON THE TERMS SET FORTH IN THE AGREEMENT UNDER CERTAIN CIRCUMSTANCES (SPECIFIED
IN THE RIGHTS AGREEMENT). RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT].(1)
Rights Certificate
O'CHARLEY'S INC.
This certifies that _____________________________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms and
conditions of the Rights Agreement, dated December 8, 2000 (the "Rights
Agreement"), between O'Charley's Inc., a Tennessee corporation (the "Company"),
and First Union National Bank, as Rights Agent (the "Rights Agent," which term
shall include any successor Rights Agent under the Rights Agreement), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to the Expiration Date (as such
term is defined in the Rights Agreement) at the office of the Rights Agent or
its successor
--------
(1) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
40
designated for such purpose, one one-thousandth of a fully paid nonassessable
share of Series A Junior Preferred Stock, no par value (the "Preferred Stock"),
of the Company at the Purchase Price initially of $80.00 per one one-thousandth
of a share (each such one one-thousandth of a share being a "Unit") of Preferred
Stock, upon presentation and surrender of this Rights Certificate with the
Election to Purchase and related certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of Units that may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
Unit set forth above shall be subject to adjustment in certain events as
provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement) or, under certain circumstances described in the Rights Agreement, a
transferee of any such Acquiring Person, Associate or Affiliate, such Rights
shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase capital
stock of an entity other than the Company or receive cash or other assets, all
as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms and conditions of
the Rights Agreement, which terms and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the
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41
holders of the Rights Certificates. Copies of the Rights Agreement are on file
at the principal office of the Company and are available from the Company upon
written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing an aggregate number of Rights equal to the aggregate number
of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Rights Certificate (i) may be redeemed by the Company under certain
circumstances at its option at a redemption price of $0.001 per Right, payable
at the Company's option in cash or in common stock, no par value per share of
the Company (the "Company Common Stock"), subject to adjustment in certain
events as provided in the Rights Agreement or (ii) may be exchanged in whole or
in part for shares of Company Common Stock.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-thousandth of a share of Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Preferred Stock
or of any other securities that may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
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42
herein be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of
-----------------------------.
ATTEST: O'CHARLEY'S INC.
By:
------------------------------------- -------------------------------
Title: Title:
------------------------------ ----------------------------
Countersigned:
FIRST UNION NATIONAL BANK
By:
---------------------------------
Authorized Signature
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43
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate)
FOR VALUE RECEIVED ______________________________________________hereby sells,
assigns and transfers unto __________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________,
Attorney, to transfer the within Rights Certificate on the books of the within-
named Company, with full power of substitution.
Dated:
-------------------------
--------------------------------------------
Signature
Signature Guaranteed:
44
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:
------------------------- --------------------------------------------
Signature
Signature Guaranteed:
--------------------------------------------------------------------------------
NOTICE
This signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
This signature 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
correspondent in the United States.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
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 Rights Certificates issued in exchange for this
Rights Certificate.
45
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate)
To: O'CHARLEY'S INC.
The undersigned hereby irrevocably elects to exercise
________________________ Rights represented by this Rights Certificate to
purchase the Units of Preferred Stock, issuable upon the exercise of the Rights
(or such other securities of the Company or of any other person that may be
issuable upon the exercise of the Rights) and requests that certificates for
such Units be issued in the name of and delivered to:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Please insert social security or other identifying number: _____________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Please insert social security or other identifying number: _____________________
Dated:
------------------------- --------------------------------------------
Signature
Signature Guaranteed:
--------------------------------------------------------------------------------
46
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated:
------------------------- --------------------------------------------
Signature
Signature Guaranteed:
--------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Election to Purchase and Certificate must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
This signature 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
correspondent in the United States.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
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 Rights Certificates issued in exchange for this
Rights Certificate.
47
EXHIBIT B
Summary of Rights to Purchase Preferred Stock
On December 8, 2000, our board of directors approved the adoption of a
rights agreement, commonly known as a "poison pill." The discussion below
describes the rights agreement entered into between us and First Union National
Bank, as rights agent, dated as of December 8, 2000 (the "Rights Agreement"),
but is not complete, so you should read it together with the Rights Agreement,
which you may obtain from us free of charge.
ISSUANCE OF RIGHTS
Under the Rights Agreement, we will issue one right for each share of
our common stock, no par value per share, outstanding on December 27, 2000.
Rights will only be issued to stockholders of record as of the close of business
on December 27, 2000. In addition, one right will automatically attach to each
share of common stock that we issue between December 27, 2000 and the time that
the rights become exercisable. When exercised, each right will entitle its
holder to purchase from us one one-thousandth of a share (a "unit") of our
Series A Junior Preferred Stock, no par value per share (the "Series A Preferred
Stock"), at an exercise price of $80.00 per unit, subject to adjustment.
INITIAL EXERCISE OF RIGHTS
The rights initially will not be exercisable. Instead, the rights will
be attached to and trade with all shares of our common stock outstanding as of,
and issued after December 27, 2000. The rights will separate from the common
stock and will become exercisable upon the earlier of the following events (the
"distribution date"):
- The close of business on the tenth business day (or some later
day as our board of directors may determine) following the first
public announcement that a person or group of affiliated or
associated persons has acquired beneficial ownership of 18% or
more of our shares of common stock then outstanding (an
"Acquiring Person"); or
- The close of business on the tenth business day (or some later
day as our board of directors may determine) following the
commencement of a tender offer or exchange offer that could
result in a person or group becoming the beneficial owner of 18%
or more of our shares of common stock then outstanding.
The rights will expire at the close of business on December 8, 2010,
unless we redeem or exchange the rights as described below.
48
EVIDENCE OF RIGHTS
Until the rights become exercisable:
- The rights will be evidenced by and transferred with our common
stock certificates;
- New common stock certificates issued after December 27, 2000
will contain a notation incorporating the Rights Agreement by
reference; and
- Any surrender for transfer of any certificates for our common
stock will also constitute the transfer of the rights associated
with the common stock represented by those certificates.
As soon as practicable after the rights become exercisable, we will mail
out rights certificates to the holders of our common stock who are eligible to
receive rights. After we mail them out, the separate rights certificates alone
will represent the rights.
EXERCISE AFTER SOMEONE BECOMES AN ACQUIRING PERSON
After public announcement that a person has become an Acquiring Person,
each holder of a right will have the right to receive upon exercise of the
rights that number of shares of common stock (or in our board's discretion, some
other consideration), having a value of two times the then current purchase
price of the right. However, this will not apply to an Acquiring Person or their
associates or affiliates, whose rights will have become null and void.
Under certain circumstances, each holder of a right will have the right
to receive upon exercise of the rights common stock of a company acquiring us,
having a value equal to two times the then current purchase price of the right.
Each holder of a right will receive the right contemplated by this paragraph in
the event that, at any time on or after the date it is publicly announced that a
person has become an Acquiring Person:
- We consolidate with, or merge with and into, any other person,
and we are not the continuing or surviving corporation;
- Any person consolidates with us, or merges with us and we are
the continuing or surviving corporation of that merger and, in
connection with that merger, all or part of the shares of our
common stock are changed into or exchanged for stock or other
securities of any other person or cash or any other property; or
- We sell or transfer 50% or more of our assets or earning power.
The holder of a right will continue to have this right whether or not
that holder has previously exercised its right in accordance with the first
paragraph of this subsection. Rights that are or were
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beneficially owned by an Acquiring Person may (under certain circumstances
specified in the Rights Agreement) become null and void.
EXCHANGE
At any time after a person becomes an Acquiring Person, we may exchange
all or part of the outstanding and exercisable rights for shares of our common
stock at an exchange ratio specified in the Rights Agreement. We generally may
not make an exchange after any person becomes the beneficial owner of 50% or
more of our common stock.
ADJUSTMENT
The purchase price and the number of shares of common stock or other
securities or property issuable upon exercise of the rights is subject to
adjustment from time to time to prevent certain types of dilution. With certain
exceptions, the purchase price of the rights will not be adjusted until
cumulative adjustments amount to at least 1% of the purchase price. We are not
obligated to issue fractional units or shares of common stock. If we decide not
to issue fractional units or shares, we will make an adjustment in cash based on
the fair market value of a unit or share on the last trading date prior to the
date of exercise.
REDEMPTION
We may redeem the rights in whole, but not in part, at a price of $0.001
per right (payable in cash or shares of common stock). However, we may only
redeem the rights until the earlier of ten days after someone becomes an
Acquiring Person or December 8, 2010.
Once redeemed, the rights will terminate immediately and the only right
of the holders of the rights will be to receive the redemption price.
AMENDMENT OF RIGHTS AGREEMENT
We may amend the Rights Agreement without the approval of the holders of
our common stock until the distribution date. After the distribution date, we
will only be able to amend the Rights Agreement in order to cure any ambiguity,
defect or inconsistency, to shorten or lengthen any time period, or to make
changes that do not adversely affect the interests of rights holders excluding
the interests of an Acquiring Person or their associates or affiliates. We may
only amend the time period governing redemption of the rights if the rights are
presently redeemable.
OTHER
Until a right is exercised, the holder will have no rights as a
shareholder of ours as a result of the rights. This means, for example, that
until it is exercised, a right will not entitle its holder to vote
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or receive dividends like one of our shareholders. The distribution of the
rights will not be taxable to shareholders or to us. However, shareholders may,
depending upon the circumstances, recognize taxable income in the event that the
rights become exercisable for units of Series A Preferred Stock, shares of
common stock, other consideration or for common stock of an acquiring company.
The discussion above describes the rights and the Rights Agreement, but
is not complete, so you should read it together with the Rights Agreement, which
you may obtain from us upon request.
As of December 20, 2000, 15,990,040 shares of our common stock were
issued and outstanding. Each share of our common stock outstanding on December
27, 2000 will receive one right. As long as the rights are attached to our
common stock, we will issue one right for each share of our common stock issued
between December 27, 2000 and the distribution date. A total of 50,000 shares of
Series A Preferred Stock have been reserved for issuance upon exercise of the
rights, subject to adjustment.
The units of Series A Preferred Stock that may be acquired upon exercise
of the rights will be nonredeemable and subordinate to any other shares of
preferred stock that may be issued by the Company.
Each unit of Series A Preferred Stock will be entitled to receive, when,
as and if declared, dividends at the same rate as dividends are paid with
respect to the common stock.
In the event of liquidation, the holder of a unit of Series A Preferred
Stock will be entitled to share in any assets remaining ratably with the holders
of the common stock.
Each unit of Series A Preferred Stock issued to a holder of our common
stock will have one vote, voting together with our common stock.
In the event of any merger, share exchange or other transaction in which
shares of our common stock are exchanged, each unit of Series A Preferred Stock
will be entitled to receive the per share amount paid in respect of each share
of common stock.
The rights of holders of the Series A Preferred Stock to dividends,
liquidation and voting, and in the event of mergers and share exchanges, are
protected by customary anti-dilution provisions.
Because of the nature of the Series A Preferred Stock's dividend,
liquidation and voting rights, the economic value of one unit of Series A
Preferred Stock that may be acquired upon the exercise of each right should
approximate the economic value of one share of common stock.
The rights may have certain anti-takeover effects. The rights will cause
substantial dilution to a person or group that attempts to acquire us on terms
not approved by a majority of our board of directors unless the offer is
conditioned on a substantial number of rights being acquired. However, the
rights should not interfere with any merger or other business combination
approved by our board of directors since the rights may be redeemed by us at
$0.001 per right at any time on or
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51
prior to the tenth day following the announcement that someone has become an
Acquiring Person. Thus, the rights are intended to encourage persons who may
seek to acquire control of us to initiate such an acquisition through
negotiations with our board of directors. However, the effect of the rights may
be to discourage a third party from making a partial tender offer or otherwise
attempting to obtain a substantial equity position in our equity securities or
seeking to obtain control of us. To the extent any potential acquirers are
deterred by the rights, the rights may have the effect of preserving incumbent
management in office.
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