MERCURY FINANCE COMPANY
and
XXXXXX TRUST AND SAVINGS BANK
as Rights Agent
RIGHTS AGREEMENT
Dated as of February 28, 1997
TABLE OF CONTENTS
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . 6
3. Issue of Rights Certificates . . . . . . . . . . . . . . . . . . . . . 6
4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . 7
5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . 8
6. Transfer, Split Up, Combination
and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost
or Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . . 8
7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . 9
8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . 11
9. Reservation and Availability of Common Stock . . . . . . . . . . . . . 12
10. Common Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . 13
11. The Flip-In . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12. The Flip-Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
13. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights . . . . . . . . . . . . . . . . . . 17
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . 23
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . 24
17. Rights Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . 25
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . 25
19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . 25
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . 26
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . 28
22. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . 29
23. Redemption and Termination . . . . . . . . . . . . . . . . . . . . . . 29
24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . 31
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . 32
28. Continuing Directors. . . . . . . . . . . . . . . . . . . . . . . . . 33
29. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
30. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . 33
31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . 33
EXHIBITS
EXHIBIT A -- Forms of Rights Certificates
EXHIBIT B -- Form of Rights Summary
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of February 28, 1997 (the "AGREEMENT"),
between MERCURY FINANCE COMPANY, a Delaware corporation (the "COMPANY"), and
Xxxxxx Trust and Savings Bank (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on February 27, 1997, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each outstanding share of common stock, par value $1.00 per share,
of the Company (the "COMMON STOCK") outstanding on March 10, 1997 (the "RECORD
DATE"), and the issuance of one Right for each share of Common Stock of the
Company issued between the Record Date and the Separation Date (as hereinafter
defined) and one Right for each share of Common Stock of the Company issued upon
exercise of stock options granted prior to the Separation Date or under any
employee plan or arrangement established prior to the Separation Date, each
Right representing the right to purchase one share of Common Stock, upon the
terms and subject to the conditions hereinafter set forth (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 (as such term is
hereinafter defined) who or which, together with all Affiliates (as hereinafter
defined) and Associates (as hereinafter defined) of such Person, shall be the
Beneficial owner (as hereinafter defined) of 15% or more of the shares of Common
Stock then outstanding and shall include all Affiliates and Associates of such
Person, but shall not include the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company or any
Person or entity holding shares of Common Stock organized, appointed or
established by the Company for or pursuant to the terms of any such plan.
(b) "AFFILIATE" shall mean, with respect to a specified Person, a
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, the Person specified.
(c) "ASSOCIATE" shall mean, with respect to a specified Person, (i)
any corporation or organization (other than the Company or a Subsidiary of the
Company) of which such Person is an officer, director or partner or is, directly
or indirectly, the beneficial owner of 10% or more of any class of equity
security as defined in Rule 3a-11 of the General Rules and Regulations under the
Exchange Act (or any successor rule or statutory provision), (ii) any trust or
other estate in which such Person has a substantial beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary capacity, and
(iii) any relative or spouse of such Person, or any relative of such spouse, who
has the same home as such Person, or is an officer or director of any
corporation controlling or controlled by such Person.
(d) "BENEFICIAL OWNERSHIP" shall be determined pursuant to Rule 13d-3
of the General Rules and Regulations under Exchange Act (or any successor rule
or statutory provision) or, if Rule 13d-3 shall be rescinded and there shall be
no successor rule or statutory provision thereto, pursuant to Rule 13d-3 as in
effect on the date hereof; provided, however, that a Person shall, in any event,
also be deemed to be the "Beneficial Owner" of any securities:
(i) which such Person or any Affiliate or Associate thereof
beneficially owns, directly or indirectly;
(ii) which such Person or any Affiliate or Associate thereof,
directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that 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 or on behalf of such Person or any Affiliate or
Associate thereof until the tendered securities are accepted for
purchase or exchange, or (B) securities issuable upon exercise of the
Rights;
(iii) which such Person or any Affiliate or Associate thereof,
directly or indirectly, has sole or shared voting or investment power
with respect thereto pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed the "Beneficial Owner' of, or to
"beneficially own," any security under this subparagraph (iii) as a
result of an agreement, arrangement or understanding to vote such
security if the agreement, arrangement or understanding (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act; or
(iv) which are beneficially owned, directly or indirectly, by
any other Person or any Affiliate or Associate thereof with which such
Person or any Affiliate or Associate thereof 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 subparagraph (iii) of this paragraph (e)) or
disposing of any voting securities of the Company.
Nothing in this Section 1(e) shall cause a Person engaged in business
as an underwriter to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of such
acquisition.
(e) "BOARD EVENT" shall mean an event or series of events as a result
of which, at any time, a majority of the Board is not comprised of Continuing
Directors.
(f) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the State of Illinois are authorized
or obligated by law or executive order to close.
(g) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M.,
Chicago time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Chicago time, on the next succeeding
Business Day.
(h) "CLOSING PRICE" of any security on any given day shall be the
last sale price, regular way, of such security or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
on the principal trading market on which such security is then traded.
(i) "COMMON STOCK" shall mean the common stock, par value $1.00 per
share, of the Company, and "COMMON STOCK" when used with reference to any Person
other than the Company shall mean the capital stock with the greatest voting
power, or the equity securities or other equity interest having power to control
or direct the management, of such Person.
(j) "CONTINUING DIRECTOR" shall mean any director of the Company who
is not an Acquiring Person or a representative or nominee of an Acquiring
Person, and (i) who was elected by the stockholders or appointed by the Board of
Directors of the Company prior to the date as of which the Acquiring Person
became an Acquiring Person, or (ii) who was designated (before his initial
election or appointment as a director) as a Continuing Director by a majority of
the Continuing Directors.
(k) "CURRENT MARKET PRICE" of any security on any given day shall be
deemed to be the average of the daily Closing Prices per share or other trading
unit of such security for 10 consecutive Trading Days (as hereinafter defined)
immediately preceding such date; provided, however, that with respect to shares
of capital stock, in the event that the current market price per share of the
capital stock is determined during a period following the announcement of (i) a
dividend or distribution on the capital stock payable in shares of such capital
stock or securities convertible into shares of such capital stock (other than
the Rights), or (ii) any subdivision, combination or reclassification of the
capital stock, and prior to the expiration of the requisite 10 Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then and in each such case, the Current Market Price, shall be
properly adjusted to take into account ex-dividend trading; and provided further
that if the security is not publicly held or not so listed or traded, Current
Market Price per share or other trading unit shall mean the fair value per share
or other trading unit as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(l) "EQUIVALENT COMMON STOCK" shall mean any class or series of
capital stock of the Company, if any, other than the Common Stock, which is
entitled to participate on a proportional basis with the Common Stock in
dividends and other distributions, including distributions upon the liquidation,
dissolution or winding up of the Company. In calculating the number of shares
any class or series of Equivalent Common Stock for purposes of Section 13 of
this Agreement, the number of shares or fractions of Equivalent Common Stock
that are entitled to the same dividend or distribution as a whole share of
Common Stock shall be deemed to be one share.
(m) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement, and all references to any
rule or regulation of the General Rules and Regulations under the Exchange Act
shall be, except as otherwise specifically provided herein, to such rule or
regulation as was in effect on the date of this Agreement.
(n) "EXCHANGE DATE" shall mean the date at which the Rights are
exchanged as provided in Section 24 of this Agreement.
(o) "EXPIRATION DATE" shall mean the Close of Business on
February 27, 2007 subject to extension as provided in Section 12(c) of this
Agreement.
(p) "FLIP-IN EVENT" shall mean any Person becoming an Acquiring
Person.
(q) "FLIP-OVER EVENT" shall mean any of the events described in
Section 12(a) of this Agreement.
(r) "PERSON" shall mean any individual, firm, corporation,
partnership or other entity and shall include any "group" as that term is used
in Rule 13d-5(b) under the Exchange Act (or any successor rule or statutory
provision).
(s) "PURCHASE PRICE" shall mean with respect to each Right, the price
set forth in Section 7(b) of this Agreement.
(t) "PRINCIPAL PARTY" shall have the meaning set forth in Section
12(b) of this Agreement.
(u) "REDEMPTION DATE" shall mean the time at which the Rights are
ordered to be redeemed pursuant to Section 23 of this Agreement.
(v) "SEPARATION DATE" shall mean the earlier of (i) the tenth day
after the Stock Acquisition Date (as hereinafter defined) or (ii) the tenth day
after the date of the commencement of, or first public announcement of the
intent to commence, a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any Subsidiary of the Company or any entity holding shares of Common Stock
organized, appointed or established by the Company for or pursuant to the terms
of any such plan), if upon consummation thereof, such Person would be the
Beneficial Owner of 50% or more of the shares of Common Stock then outstanding
(including any such date which is after the date of this Agreement and prior to
the issuance of the Rights).
(w) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement by the Company, an Acquiring Person or otherwise, that an Acquiring
Person, has become such.
(x) "SUBSIDIARY" shall mean, with reference to any Person, any
corporation of which a majority of any class of equity security is Beneficially
Owned, directly or indirectly, by such Person.
(y) "TRADING DAY," with respect to any security shall mean a day on
which the principal national securities exchange on which the security is listed
or admitted to trading is open for the transaction of business or, if the
security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(z) "TRIGGERING EVENT" shall mean a Flip-In Event or a Flip-Over
Event.
Any determination required by the definitions contained in this
Section 1 shall be made by the Board of Directors of the Company in its good
faith judgment, which determination shall be final and binding on the Rights
Agent.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 of this Agreement, shall prior to the
Separation Date also be the holders of the Common Stock) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the Separation Date, (i) the Rights will be evidenced by
the certificates for the Common Stock registered in the names of the holders of
the Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (ii) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company).
(b) As soon as practicable after the Separation Date, the Rights
Agent will send by first-class, insured, postage prepaid mail, to each record
holder of the Common Stock as of the Close of Business on the Separation Date,
at the address of such holder shown on the records of the Company, a Rights
certificate (the "RIGHTS CERTIFICATE"), evidencing one Right (as adjusted from
time to time prior to the Separation Date pursuant to this Agreement) for each
share of Common Stock so held. As of and after the Separation Date, the Rights
will be evidenced solely by Rights Certificates.
(c) As soon as practicable after the Record Date, the Company will
send a copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit B (the "SUMMARY OF RIGHTS"), by first-class, postage prepaid mail to
each record holder of the Common Stock as of the Close of Business on the Record
Date, at the address of such holder shown on the records of the Company.
(d) Certificates for the Common Stock issued after the Record Date
but prior the earlier of the Separation Date or the Expiration Date (as
hereinafter defined), shall be deemed also to be certificates for Rights, and
shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Mercury
Finance Company (the "Company") and Xxxxxx Trust and Savings Bank,
dated as of February 28, 1997 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which
is on file at the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances,
Rights beneficially owned by Acquiring Persons (as defined in the
Rights Agreement) become null and void and the holder of such Rights
(including any subsequent holder) shall not have any right to exercise
the Rights.
(e) After the Separation Date but prior to the Expiration Date,
Rights shall be issued in connection with the issuance of Common Stock upon the
exercise of stock options granted prior to the Separation Date or pursuant to
other benefits under any employee plan or arrangement established prior to the
Separation Date; provided, however, that if, pursuant to the terms of any option
or other benefit plan, the number of shares issuable thereunder is adjusted
after the Separation Date, the number of Rights issuable upon issuance of the
shares shall be equal only to the number of shares which would have been
issuable prior to the adjustment.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the form of election to purchase
shares and form of assignment) shall be in substantially the form attached
hereto as Exhibit A and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or to conform to
usage. Subject to the provisions of this Agreement, the Rights Certificates,
whenever issued, shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase such number of shares of Common Stock
which shall be set forth therein at the Purchase Price set forth therein,
subject to adjustment as provided in this Agreement.
(b) Any Rights Certificate issued pursuant to Section 3(a) of this
Agreement that represents Rights beneficially owned by an Acquiring Person or
that represents any Rights owned on or after the Separation Date by any Person
who subsequently becomes an Acquiring Person and any Rights Certificate issued
at any time upon the transfer of any Rights to an Acquiring Person or to any
nominee of such Acquiring Person and any Rights Certificate issued pursuant to
Section 6 or Section 13 of this Agreement upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence, may
contain 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). This Rights Certificate and the
Rights represented hereby may become void in the circumstances
specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by the Chairman of its Board of Directors, its President or any Vice
President, either manually or by facsimile signature and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. Each Rights Certificate shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before counter-
signature by the Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the Rights Agent, and
issued and delivered by the Company with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be such officer of
the Company; and any Rights Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Separation Date, the Rights Agent will keep or
cause to be kept, at one of its offices, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced by each of the Rights Certificates, and the certificate number
and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 14 of this Agreement, at any
time after the Close of Business on the Separation 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 shares of Common Stock (or other securities, cash or other property,
as the case may be) as the Rights Certificate or Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Certificates
to be transferred, split up, combined or exchanged at the principal office of
the Rights Agent designated for such purpose. Thereupon, the Rights Agent shall
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Until the Separation Date, no Right may be exercised. Each Right
shall entitle (except as otherwise provided in this Agreement) the registered
holder thereof, upon the exercise thereof as provided in this Agreement, to
purchase, for the Purchase Price, at any time after the Separation Date and
prior to the earliest of the Expiration Date, the Exchange Date and the
Redemption Date, one share of Common Stock, subject to adjustment from time to
time as provided in Section 13 of this Agreement, payable in lawful money of the
United States of America in accordance with Paragraph (c) below.
(b) Subject to Section 7(e), Section 23(a) and Section 24 of this
Agreement, the registered holder of any Rights Certificate may exercise the
Rights evidenced thereby in whole or in part at any time after the Separation
Date upon surrender of the Rights Certificate, with the form of election to
purchase on the reverse side thereof including the certificate contained therein
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each share of Common Stock as to
which the Rights are exercised prior to the earliest of the Expiration Date, the
Exchange Date and the Redemption Date. The Purchase Price for each share of
Common Stock purchasable pursuant to the exercise of a Right shall initially be
Thirteen Dollars and Fifty Cents ($13.50), and shall be payable in lawful money
of the United States of America in accordance with Paragraph (c) below. The
Purchase Price and the number of shares of Common Stock to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Section 13 of this Agreement.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase including the certificate
contained therein duly executed, accompanied by payment of the Purchase Price
for the shares (or cash or other assets as the case may be) to be purchased and
an amount equal to any applicable transfer tax in cash, or by certified check or
bank draft payable to the order of the Company, the Rights Agent shall thereupon
promptly:
(i)(A) requisition from any transfer agent of the Common Stock
certificates for the total number of shares of Common Stock to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) requisition from the depositary agent
depositary receipts representing such number of shares of Common Stock as
are to be purchased (in which case certificates for the shares of Common
Stock represented by such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company will direct the depositary agent
to comply with such request;
(ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14 of this
Agreement;
(iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be
designated by such holder; and
(iv) after receipt, 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 other securities of the
Company, pay cash and/or distribute other property pursuant to this Agreement,
the Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Rights
Certificate or to his duly authorized assigns, subject to the provisions of
Section 6 and Section 14 of this Agreement.
(e) Notwithstanding anything in this Agreement to the contrary, upon
the occurrence of the earlier of (x) the date on which the Board of Directors of
the Company decides to exchange the Rights pursuant to Section 24 of this
Agreement and (y) a Triggering Event, any unexercised 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 Associate or Affiliate
thereof) who becomes a transferee after the Acquiring Person becomes such, (iii)
a transferee of an Acquiring Person (or of any Associate or Affiliate thereof)
who becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall immediately become permanently null and void without any further action,
and no holder of such Rights shall have any right whatsoever with respect to
such Rights under 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) of this Agreement are complied with, but shall have no liability to
any holder of Rights Certificates or to any other Person as a result of its
failure to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of any Rights Certificate upon the
occurrence of any purported exercise thereof unless such registered holder shall
have (i) completed and signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Rights Certificate surrendered
for such exercise and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former or proposed Beneficial Owner) or Affiliates
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 cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificates purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available at all times out of its authorized and unissued shares of
Common Stock (and/or other shares of capital stock or securities) or its
authorized and issued shares of Common Stock (and/or other shares of capital
stock or securities) held in its treasury, free from preemptive rights or any
right of first refusal, the number of shares of Common Stock (and/or other
shares of capital stock or securities) that will be sufficient to permit the
exercise in full of all Rights from time to time outstanding.
(b) So long as the shares of Common Stock (and/or other shares of
capital stock or securities) issuable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its reasonable
efforts to cause, from and after the time the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to:
(i) file, as soon as practicable following the earlier of the
Separation Date or as soon as is required by law, a registration statement
under the Securities Act of 1933 (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form;
(ii) cause such registration statement to become effective as soon as
practicable after the filing; and
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
earliest of (A) the date as of which Rights are no longer exercisable for
such securities, (B) the Expiration Date and (C) the Redemption Date.
The Company will also take all action necessary to ensure compliance with
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights in
order to prepare and file such registration statements and permit them to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in that jurisdiction shall have been obtained and, if
applicable, until a registration statement has been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Rights Certificates
and of any shares of Common Stock (and/or other shares of capital stock of
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of any certificate for shares of Common Stock
(and/or other shares of capital stock of securities, as the case may be) in
respect of a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or the issuance or
delivery of any certificates for shares of Common Stock (and/or other shares of
capital stock of securities, as the case may be), upon the exercise of any
Rights until such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for shares of Common Stock (and/or other shares of capital stock of
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares of
Common Stock (and/or other shares of capital stock of securities, as the case
may be) represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Common Stock (and/or other shares of capital stock of securities, as
the case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Common Stock
(and/or other shares of capital stock of securities, as the case may be)
transfer books of the Company are open.
Section 11. The Flip-In. (a) In the event any Person shall become an
Acquiring Person, then, subject to the provisions of Section 24 of this
Agreement, each holder of a Right, except as provided below and in Section 7(e)
of this Agreement, shall thereafter have a right to receive, upon exercise of
the Right at the then current Purchase Price, in accordance with the terms of
this Agreement, in lieu of one share of Common Stock per Right held, such number
of shares of Common Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of shares of
Common Stock for which a Right is then exercisable and dividing that product by
(y) 50% of the Current Market Price per share of the Common Stock on the date on
which the first of the events listed above in this subparagraph (a) occurs (such
number of shares being herein referred to as the "ADJUSTMENT SHARES").
(b) In the event that there shall not be sufficient treasury shares
or authorized but unissued shares of Common Stock to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (a), the Company
shall take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exercise of the Rights; provided, however, that
if the Company is unable to cause the authorization of a sufficient number of
additional shares of Common Stock, then, in the event the Rights become so
exercisable, the Company, with respect to each Right and to the extent necessary
and permitted by applicable law and any agreements or instruments in effect on
the date hereof to which the Company is a party, shall, upon the exercise of
such Rights,
(i) pay an amount in cash equal to the excess of (A) the product
of (1) the number of Adjustment Shares, multiplied by (2) the Current
Market Price of the Common Stock (such product being herein referred to as
the "CURRENT VALUE"), over (B) the Purchase Price, in lieu of issuing
shares of Common Stock and requiring payment therefor, or
(ii) issue debt or equity securities, or a combination thereof,
having a value equal to the Current Value, where the value of such
securities shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors of the Company, and require
the payment of the Purchase Price, or
(iii) deliver any combination of cash, property, Common Stock
and/or other securities having the requisite value, and require payment of
all or any requisite portion of the Purchase Price.
To the extent that the Company determines that some action need be
taken pursuant to clauses (i), (ii), or (iii) of the proviso of this Section
11(b), a majority of the directors of the Company may suspend the exercisability
of the Rights for a period of up to 45 days following the date on which the
first of the events listed in Section 11 of this Agreement shall have occurred,
in order to decide the appropriate form of distribution to be made pursuant to
the above proviso and to determine the value thereof. In the event of any
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at the time the suspension is no longer in effect.
Section 12. The Flip-Over
(a) In the event that, following the Separation Date, directly or
indirectly:
(w) the Company shall consolidate with, or merge with and into, any
other Person; or
(x) any Person shall consolidate with the Company, or merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part
of the shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other Person or cash or any other property; or
(y) the Company shall effect a share exchange in which all or part of
the Common Stock of the Company shall be changed into (including, without
limitation, any conversion into or exchange for) securities of any other
Person, cash or any other property; or
(z) the Company shall sell, lease, exchange, mortgage, pledge or
otherwise transfer (or one or more of its Subsidiaries shall sell, lease,
exchange, mortgage, pledge or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons
then, and in each such case, subject to the provisions of Section 24 of this
Agreement,
(i) each holder of a Right, except as provided in Section 7(e)
of this Agreement, shall thereafter have the right to receive, upon
the exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of shares of freely
tradeable common stock of the Principal Party, free and clear of any
lien, encumbrance or other adverse claim, as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by
the then number of shares of Common Stock for which a Right is then
exercisable (or the number of shares of Common Stock for which a Right
was exercisable immediately prior to the occurrence of the Flip-In
Event if a Flip-In Event has previously occurred) and dividing that
product by (2) 50% of the Current Market Price per share of the common
stock of such Principal Party on the date of consummation of the
Flip-Over Event;
(ii) all common stock of any Person for which any Right may be
exercised after consummation of a business combination as provided in this
Section 12(a) shall, when issued upon exercise thereof in accordance with
this Agreement, be duly and validly authorized and issued and fully paid
and nonassessable;
(iii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of the Flip-Over Event, all the obligations
and duties of the Company pursuant to this Agreement;
(iv) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the
provisions of Section 13 hereof shall apply to such Principal Party;
(v) 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 such consummation as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares
of common stock thereafter deliverable upon the exercise of the
Rights; and
(vi) the provisions of Section 11 of this Agreement shall be of
no effect following the first occurrence of any Flip-Over Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in (w), (x) or (y)
of the first sentence of Section 12(a), the Person that is the issuer
of any securities into which shares of Common Stock of the Company are
converted or exchanged in such merger, consolidation or other business
combination, and if no securities are so issued, the Person that is
the other party to the merger, consolidation or other business
combination; and
(ii) in the case of any transaction described in (z) of the
first sentence in this Section 12(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the common stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under the Exchange Act, as then in effect, and such Person is
a direct or indirect Subsidiary of another Person the common stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the common stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the common stock having the greatest aggregate market value.
(c) The Company shall not consummate any Flip-Over Event unless prior
thereto the Company and each Principal Party and each other Person who may
become a Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 12 and further providing that, as soon as practicable after
the date of any Flip-Over Event, the Principal Party will:
(i) prepare and file at its own expense a registration statement
under the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, will
use its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and will use its
best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the earliest of the Expiration Date, the Exchange Date and the
Redemption Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The Principal Party shall temporarily suspend, for a period of time not to
exceed 90 days following the occurrence of a Flip-Over Event, the exercisability
of the Rights in order to prepare and file the registration statement referred
to in clause (i) above, and the Expiration Date shall be extended by the number
of days of such suspension. The provisions of this Section 12 shall similarly
apply to successive Flip-Over Events. In the event that a Flip-Over Event shall
occur at any time after the occurrence of a Flip-In Event, the Rights which have
not theretofore been exercised shall thereafter become exercisable in the manner
described in Section 12(a).
Section 13. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 13.
(a) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend or make a distribution on the Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding Common Stock
into a larger number of shares, (C) combine the outstanding Common Stock into a
smaller number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then in each such event, except as otherwise provided
in this Section 13(a), the Purchase Price in effect at the time of the record
date for such dividend or distribution, or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of Common Stock or capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Rights (except as provided in Section 7(e) of
this Agreement) exercised on or after such time shall be entitled to receive
upon payment of the Purchase Price in effect immediately prior to such date, the
aggregate number and kind of shares of Common Stock or capital stock which, if
such Rights had been exercised immediately prior to such date and at a time when
the Common Stock transfer books of the Company were open, that holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, distribution, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both Section 11(a) of this
Agreement and this Section 13(a), the adjustment provided for in this Section
13(a) shall be in addition to, and shall be made prior to any adjustment
required pursuant to Section 11(a).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Stock entitling them to
subscribe for or purchase Common Stock (or Equivalent Common Stock) or
securities convertible into Common Stock or Equivalent Common Stock at a price
per share of Common Stock or per share of Equivalent Common Stock (or having a
conversion price per share, if a security convertible into Common Stock or
Equivalent Common Stock) of less than the Current Market Price per share of
Common Stock on such record date, the Purchase Price to be in effect after the
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to the record date by a fraction,
(1) the numerator of which shall be the number of shares of Common
Stock and Equivalent Common Stock (if any) outstanding on the record date,
plus the number of shares of Common Stock and Equivalent Common Stock which
the aggregate exercise price of the total number of shares of Common Stock
and/or Equivalent Common Stock which are obtainable upon the exercise of
the rights, options or warrants (and/or the aggregate initial conversion
price of the convertible securities so offered) would purchase at the
Current Market Price; and
(2) the denominator of which shall be the number of shares of Common
Stock and Equivalent Common Stock (if any) outstanding on the record date,
plus the number of additional shares of Common Stock and/or Equivalent
Common Stock which may be obtained upon exercise of the rights, options or
warrants (or into which the convertible securities so offered are initially
convertible).
If the subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent. Shares of Common Stock or Equivalent
Common Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
rights, options or warrants are not issued following an adjustment, the Purchase
Price shall again be adjusted to be the Purchase Price which would be in effect
if the record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the surviving
corporation) of evidences of indebtedness, cash (other than a regular periodic
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Common Stock, but including any dividend
payable in stock other than Common Stock) or subscription rights or warrants
(excluding those referred to in Section 13(b)), 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,
(1) the numerator of which shall be the Current Market Price per
share of Common Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to
one share of Common Stock; and
(2) the denominator of which shall be such Current Market Price per
share of Common 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 again be adjusted to be the Purchase Price which would be in effect
if such record date had not been fixed.
(d) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 13(d)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 13 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock
or other share as the case may be. Notwithstanding the first sentence of this
Section 13(d), any adjustment required by this Section 13 shall be made no later
than the earlier of (i) three years from the date of the transaction which
mandates the adjustment or (ii) the earliest of the Expiration Date, the
Exchange Date and the Redemption Date.
(e) If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Rights thereafter exercised shall become entitled to receive
any securities of the Company other than shares of Common Stock, thereafter the
number of such other securities so receivable upon exercise of any Rights shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares contained
in Section 13(a) through (c), inclusive, and the provisions of Sections 7, 9,
10, 12 and 14 of this Agreement with respect to the Common Stock shall apply on
like terms to any such other securities.
(f) 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 shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided in this Agreement.
(g) Unless the Company shall have exercised its election as provided
in Section 13(h), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 13(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 shares of Common Stock
(calculated to the nearest ten-thousandth) obtained by
(i) multiplying (x) the number of shares of Common Stock 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.
(h) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for the number of shares of Common Stock for
which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights 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 10 days later than the date of
the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 13(h), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and 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.
(i) Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Common Stock issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares which were
expressed in the initial Rights Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment reducing
the Purchase Price below the par value of the shares of Common Stock issuable
upon exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock at
such adjusted Purchase Price.
(k) In any case in which this Section 13 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 Rights exercised after such record date
the shares of Common Stock and other capital stock or securities, cash or
property of the Company, if any, issuable upon such exercise over and above the
shares of Common Stock and other capital stock or securities, cash or property
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 and other
capital stock or securities, cash or property upon the occurrence of the event
requiring such adjustment.
(l) Anything in this Section 13 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 13, as and to
the extent that in its sole discretion the Company shall determine to be
advisable in order that any (i) consolidation or subdivision of the Common
Stock, (ii) issuance wholly for cash of any shares of Common Stock at less than
the Current Market Price, (iii) issuance wholly for cash of shares of Common
Stock or securities which by their terms are convertible into or exchangeable or
exercisable for shares of Common Stock, (iv) stock dividends, or (v) issuance of
rights, options or warrants referred to in this Section 13, hereafter made by
the Company to holders of its Common Stock shall, if practicable, not be taxable
to such stockholders.
(m) The Company covenants and agrees that it shall not (i)
consolidate with, (ii) merge with or into, or (iii) directly or indirectly sell,
lease or otherwise transfer or dispose of, in one or more transactions, assets
or earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries taken as a whole, to any other Person, if at the
time of or immediately after such consolidation, merger, sale, lease, transfer
or disposition there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(n) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 23 or Section 27
of this Agreement, take any action the purpose or effect of which is to diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
(o) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time prior to the Separation Date (i)
declare a dividend or distribution on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Separation Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to the event by a
fraction, (1) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the event and
(2) the denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of the event.
(p) Whenever an adjustment is made as provided in Sections 11, 12 and
13 of this Agreement, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting for
the adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Common Stock and the Common Stock a copy of the certificate and
(c) mail a brief summary thereof to each holder of a Rights Certificate in
accordance with Section 26 of this Agreement. The Rights Agent shall be fully
protected in relying on the certificate and on any adjustment therein contained.
Section 14. Fractional Rights and Fractional Shares.
(a) In no case shall the Company be required to issue fractional
Rights or to distribute Rights Certificates which evidence fractional Rights.
In lieu of fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the Current Market
Price of a whole Right as of the date on which fractional Rights would have been
otherwise issuable.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights
Certificates, at the time such Rights are exercised as herein provided, an
amount in cash equal to the same fraction of the Current Market Price of one
share of Common Stock as of the date of such exercise.
(c) The holder of a Right by its acceptance thereof expressly waives
any right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Separation Date, the registered holders of the
Common Stock); and any registered holder of a Rights Certificate (or, prior to
the Separation Date, of the Common Stock) without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Separation Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his rights
pursuant to 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 Separation Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Separation Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal corporate trust office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Separation Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court 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 order,
decree or ruling lifted or otherwise overturned.
Section 17. Rights Holder Not Deemed a Stockholder. Except as
otherwise expressly provided in this Agreement, no holder of any Rights
Certificate shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of the shares of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders, or to
receive dividends or subscription rights, or otherwise, until and only to the
extent that the Right or Rights evidenced by the Rights Certificate shall have
been exercised in accordance with the provisions of this Agreement.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises. The
indemnification provided for hereunder shall survive the expiration of the
Rights and the termination of this Agreement. The costs and expenses of
enforcing this right of indemnification shall be paid by the Company.
The Rights Agent may conclusively rely upon, and shall be protected
and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this Agreement in
reliance upon, any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that the corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 of this
Agreement. In case at the time the successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, the successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver the 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 the Rights Certificates either in the name of the predecessor or in
its name as successor Rights Agent; and in all such cases the Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at that 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 the Rights Certificates either in its prior name or in its
changed name; and those 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, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, it may
consult with legal counsel (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in good faith and in
accordance with the 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) be proved
or established by the Company prior to taking or suffering any action hereunder,
the fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and the
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 thereon.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of facts or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except its countersignature),
but all statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under Sections 11 or 13 of this
Agreement or responsible for the manner, method or amount of any adjustment or
the ascertaining of the existence of facts that would require an adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of an adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common Stock
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of funds or
adequate indemnification against the risk or liability is not reasonably assured
to it.
(k) The Rights Agent shall not be required to take notice or be
deemed to have notice of any fact event or determination (including, without
limitation, any dates or events defined in this Agreement or the designation of
any Person as an Acquiring Person, Affiliate or Associate thereof) under the
Rights Agreement unless and until the Rights Agent shall be specifically
notified in writing by the Company of the fact, event or determination.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company, and at the
expense of the Company, to each transfer agent of the 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 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock, 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 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then the 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 the court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of Illinois (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
State of Illinois), in good standing, which is authorized under the laws to
exercise corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of the
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the 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, as
the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price per share and the number or kind or class of
shares or other securities or property purchasable under the Rights Certificates
made in accordance with the provision of this Agreement.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to 5:00 P.M., Chicago time, on the earlier of (i) the tenth day
following the Stock Acquisition Date, subject to extension by the Board of
Directors for a period of time up to, but not exceeding, ten additional days, or
(ii) the Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $0.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"REDEMPTION PRICE"). Notwithstanding anything in this Agreement to the
contrary, no Rights may be exercised at any time that the Rights are subject to
redemption in accordance with the terms of this Agreement.
(b) Immediately upon the action of the Board of Directors of the
Company extending the redemption period pursuant to Section 23(a)(i), evidence
of which shall have been filed with the Rights Agent, the Company shall issue a
press release indicating the date to which the Board of Directors has extended
its right to redeem the Rights.
(c) Notwithstanding anything in this Agreement to the contrary, no
redemption of the Rights shall be permitted after 5:00 P.M., Chicago time, on
the earlier of (i) the tenth day following the Stock Acquisition Date, subject
to extension by the Board of Directors for a period of time up to, but not
exceeding, ten additional days, or (ii) the Expiration Date.
(d) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
Within 10 days after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall mail notice of the redemption to the
Rights Agent and the holders of the then outstanding Rights to all holders at
their last addresses as they appear upon the registry books of the Rights Agent
or prior to the Separation Date, on the registry books of the Transfer Agent for
the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
notice of redemption will state the method by which the payment of the
Redemption Price will be made. In any case, failure to give notice to any
particular holder of Rights shall not affect the sufficiency of the notice to
other holders of Rights. Neither the Company nor any of its Affiliates or
Associates may redeem for value any Rights at any time, in any manner, other
than that specifically set forth in this Section 23, and neither the Company nor
any of its Affiliates or Associates may acquire or purchase for value any Rights
at any time, in any manner, other than in connection with the purchase of shares
of associated Common Stock prior to the Separation Date.
Section 24. Exchange.
(a) The Company may, at its option but subject to receipt of any
required regulatory approvals, by action of the Board of Directors, at any time
after any Person becomes an Acquiring Person, exchange all or any part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e)) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being herein
referred to as the "EXCHANGE RATIO"). Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect an exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee plan
of the Company or of a Subsidiary of the Company or any Person holding Common
Stock for or pursuant to the terms of any employee plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50
percent or more of the 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 Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of Rights shall
be to receive that number of shares of Common Stock equal to the number of such
Rights held by the holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of the
exchange. The Company promptly shall mail a notice of any exchange to all of
the holders of Rights at their last addresses as they appear upon the registry
books of Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
notice of exchange will state the method by which the exchange of the Common
Stock for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e)) held by each holder of
Rights.
(c) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional Common
Stock. In lieu of fractional shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which fractional shares would
otherwise be issuable an amount in cash equal to the same fraction of the
Current Market Value of a whole share of Common Stock.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend payable
in stock of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock, or (ii) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase any additional
shares of Common Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its Common Stock,
or (iv) to effect any Flip-Over Event, or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each case, the Company shall
give to each holder of a Rights Certificate, in accordance with Section 26, a
notice of the proposed action, which shall specify the record date for the
purposes of the stock dividend, distribution of rights or warrants, or the date
on which the reclassification, Flip-Over Event, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders
of the shares of Common Stock, if any date is to be fixed, and the notice shall
be so given in the case of any action covered by clause (i) or (ii) above at
least 20 days prior to the record date for determining holders of the shares of
Common Stock for purposes of such action, and in the case of any other action,
at least 20 days prior to the date of the taking of the proposed action or the
date of participation therein by the holders of the shares of Common Stock
whichever shall be the earlier.
(b) Upon the occurrence of a Flip-In Event or a Flip-Over Event, the
Company or Principal Party, as the case may be, shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26, a notice of the occurrence of the event and
the consequences thereof to holders of Rights under Sections 11 or 12 of this
Agreement, as the case may be.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sent by registered or certified mail
and shall be deemed given upon receipt and addressed (until another address is
filed in writing with the Rights Agent) as follows:
Mercury Finance Company
000 Xxxxx Xxxxx; Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
delivered by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention:
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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the holder's address as shown on the registry books
of the Company. The Company shall deliver a copy of any notice or demand it
delivers to the holder of any Rights Certificate to the Rights Agent and the
Rights Agent shall deliver to the Company a copy of any notice or demand it
delivers to the holder of any Rights Certificate.
Section 27. Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein or to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights Certificates other than an Acquiring Person; provided, however, that no
amendment or supplement may be made if the effect would be to extend or shorten
the redemption period after the Stock Acquisition Date or (subject to the
following sentence) change the Purchase Price or the Redemption Price.
Notwithstanding the other provisions of this Section 27, the Continuing
Directors shall retain the right to amend the Purchase Price for a period of six
(6) months from the date hereof.
Section 28. Continuing Directors. Notwithstanding anything else in
this Agreement, at any time prior to the occurrence of a Board Event, and for a
period of six months thereafter, but in no event after February 28, 1998, any
action or decision to be taken by the Board of Directors of the Company pursuant
to this Agreement shall be taken solely by the Continuing Directors.
Section 29. 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 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
Separation Date, the Common Stock) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Separation Date, the 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, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of Delaware applicable to contracts made
and to be performed entirely within the State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of which shall for all purposes be deemed to be
an original, and all counterparts shall together constitute but one and the same
instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
XXXXXX TRUST AND SAVINGS MERCURY FINANCE COMPANY
BANK
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Vice President Title: President
Attest: Attest:
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx X. X'Xxxxxx
Name: Xxxxxxx X. Xxxx Name: Xxxxxxx X. X'Xxxxxx
Title: Assistant Secretary Title: Assistant Secretary
Exhibit A
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER FEBRUARY 27, 2007 OR EARLIER IF NOTICE OF REDEMPTION
OR EXCHANGE IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
THE RIGHTS REPRESENTED BY THIS 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 THE 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 THE RIGHTS AGREEMENT.
RIGHTS CERTIFICATE
MERCURY FINANCE COMPANY
This certifies that or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of February 28, 1997 (the "RIGHTS AGREEMENT")
between Mercury Finance Company, a Delaware corporation (the "COMPANY"), and
Xxxxxx Trust and Savings Bank (the "RIGHTS AGENT"), unless notice of redemption
shall have been previously given by the Company, to purchase from the Company at
any time after the Separation Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (Chicago time) on February 27, 2007 at the
principal corporate trust office of the Rights Agent, or at the office of its
successor as Rights Agent, one fully paid nonassessable share of the Common
Stock, par value $1.00 per share, of the Company (the "COMMON STOCK"), at a
purchase price of $13.50 per share (the "PURCHASE PRICE") upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase duly
executed. The Purchase Price may be paid in cash or by certified bank check or
money order payable to the order of the Company.
The number of Rights evidenced by this Rights Certificate (and the number
of shares of Common Stock which may be purchased upon exercise thereof) and the
Purchase Price set forth above have been determined as of March 10, 1997, based
on the Common Stock of the Company as constituted at that date. As provided in
the Rights Agreement, the Purchase Price and the number of shares of Common
Stock or other securities, cash or other property which may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
If the Rights evidenced by this Rights Certificate are or were formerly
beneficially owned, on or after the earlier of the Separation Date and the Stock
Acquisition Date, by an Acquiring Person or an Affiliate, Associate or direct or
indirect transferee of an Acquiring Person, the Rights may become null and void
and the holder of the Right (including any subsequent holder) shall not have any
right with respect to the Right.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates.
Capitalized terms used in this Rights Certificate have the same meanings as such
terms are defined in the Rights Agreement. Copies of the Rights Agreement are
on file at the principal executive offices of the Company and the office of the
Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal corporate trust office of the Rights Agent, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of shares of Common Stock or other property as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered entitled the holder to
purchase. If this Rights Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $0.001 per Right at any time prior to the earlier of (i) the close of
business on the tenth day following the time it becomes public that an Acquiring
Person has become such (with the possibility of an extension for an additional
ten days) and (ii) the Expiration Date.
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof the Company will make
a cash payment, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
to receive dividends or shall be deemed, for any purpose, the holder of Common
Stock or of any other securities, cash or property which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or this Rights Certificate be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Company, including,
without limitation, any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or to institute, as a holder of
Common Stock or other securities issuable on the exercise of the Rights
represented by this Certificate, any derivative action, or otherwise, until and
only to the extent the Right or Rights evidenced by this Rights Certificate
shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of __________, 19__.
MERCURY FINANCE COMPANY
By:
Title:
ATTEST:
Secretary
Countersigned:
By
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if the holder desires to transfer
the Rights Certificates.)
FOR VALUE RECEIVED, _________________________________ hereby sells, assigns
and transfers ____________________________ (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 this Rights Certificate on the books
of the Company, with full power of substitution.
Dated: , 19__
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
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 an Acquiring Person (as defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: , 19__ Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
NOTICE
The signature to the foregoing Assignment 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.
In the event the certification set forth above in the Form of Assignment is
not completed, the Company will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificate issued
in exchange for this Rights Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights represented by
this Rights Certificate)
To: Mercury Finance Company
The undersigned hereby irrevocably elects to exercise __________________
Rights represented by this Rights Certificate to purchase the shares of Common
Stock or other securities, cash or other property issuable upon the exercise of
the Rights and requests that certificates for the shares or other securities be
issued in the name of, and such cash or other property be paid to:
Please insert social security or other identifying number
(Please print name and address)
If the number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the remaining balance of the Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
(Please print name and address)
Dated: ,19__
Signature
(Signature must conform in all respects to name of
holder as specified on the face of this Rights
Certificate)
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being exercised by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: , 19__ Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
NOTICE
The signature on the foregoing Form of Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Election 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 Certificate issued
in exchange for this Rights Certificate.
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On February 27, 1997, the Board of Directors of Mercury Finance Company, a
Delaware corporation (the "COMPANY"), declared a dividend of one common share
purchase right (a "RIGHT") for each share of Common Stock, par value $1.00 per
share of the Company (the "COMMON STOCK"). The dividend is payable to
stockholders of record at the close of business on March 10, 1997 (the "RECORD
DATE") and with respect to all shares of Common Stock that become outstanding
after the Record Date and prior to the earliest of the Separation Date (as
defined below), the redemption of the Rights, the exchange of the Rights and the
expiration of the Rights. Except as set forth below and subject to adjustment
as provided in the Rights Agreement (as defined below), each Right entitles the
registered holder to purchase from the Company shares of the Company's Common
Stock (the "COMMON STOCK"), at an exercise price of $13.50 per share (the
"PURCHASE PRICE"). The description and terms of the Rights are set forth in a
Rights Agreement dated as of February 28, 1997 (the "RIGHTS AGREEMENT"), between
the Company and Xxxxxx Trust and Savings Bank, as Rights Agent (the "RIGHTS
AGENT").
The Rights will be evidenced by Common Stock certificates and not separate
certificates until the earlier to occur of (i) 10 days following the date of
public disclosure that a person or group, together with persons affiliated or
associated with it (an "ACQUIRING PERSON") has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding Common Stock
(the "STOCK ACQUISITION DATE") and (ii) 10 days following commencement or
disclosure of an intention to commence a tender offer or exchange offer by a
person other than the Company and certain related entities if, upon consummation
of the offer, such person or group, together with persons affiliated or
associated with it, could acquire beneficial ownership of 50% or more of the
outstanding Common Stock (the earlier of such dates being called "SEPARATION
DATE"). Until the Separation Date (or earlier redemption or expiration of the
Rights), the transfer of Common Stock will also constitute transfer of the
associated Rights. Following the Separation Date, separate certificates will
evidence the Rights.
The Rights will first become exercisable on the Separation Date (unless
sooner redeemed). The Rights will expire at the close of business on February
27, 2007 (the "EXPIRATION DATE"), unless earlier redeemed or exchanged by the
Company as described below.
The Purchase Price and the number of shares of Common Stock or other
securities, cash or other property issuable upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend or distribution on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain rights, options, warrants to subscribe for Common Stock
or securities convertible into Common Stock at less than the current market
price of the Common Stock, or (iii) upon the distribution to holders of the
Common Stock of other securities, cash, property, evidences of indebtedness, or
assets.
In the event that, following the Separation Date, the Company is acquired in
a merger or other business combination in which the Common Stock does not remain
outstanding or is changed or 50% or more of its consolidated assets is sold,
leased, exchanged, mortgaged, pledged or otherwise transferred or disposed of
(in one transaction or a series of transactions) the Rights will "FLIP OVER" and
entitle each holder of a Right to purchase, upon the exercise of the Right at
the then-current Purchase Price, that number of shares of common stock of the
acquiring company (or, in certain circumstances, one of its affiliates) which at
the time of such transaction would have a market value of two times the Purchase
Price.
If a person acquires beneficial ownership of 15% or more of the Common Stock,
the Rights will "FLIP IN" and entitle each holder of a Right, except as provided
below, to purchase, upon exercise at the then-current Purchase Price, that
number of shares of Common Stock having a market value of two times the Purchase
Price.
Any "flip over" event or "flip in" event is a "TRIGGERING EVENT."
Any Rights beneficially owned at any time on or after the Separation Date by
an Acquiring Person or an affiliate or associate of an Acquiring Person (whether
or not such ownership is subsequently transferred) will become null and void
upon the occurrence of the earlier of the Board of Directors' decision to
exchange the Rights and a Triggering Event, and any holder of the Rights will
have no right to exercise the Rights.
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% of the
Purchase Price. Holders will have no right to receive fractional shares of
Common Stock upon the exercise of Rights. In lieu of fractional shares, an
adjustment in cash may be made based on the market price of the Common Stock on
the last trading date prior to the date of exercise.
The number of outstanding Rights and the number shares of Common Stock
issuable upon exercise of each Right and the Purchase Price are also subject to
adjustment in the event of a stock split of the Common Stock or distributions,
subdivisions, consolidations or combinations of the Common Stock occurring, in
any case, prior to the Separation Date.
At any time prior to the earlier of (i) the closing of business on the tenth
day following the time that it becomes public that an Acquiring Person has
become such (with the possibility for the Board of Directors to extend this time
for an additional 10 days) and (ii) the Expiration Date, the Company may redeem
the Rights in whole, but not in part, at a price of $0.001 per Right.
Immediately upon the action of the Company's Board of Directors electing to
redeem the Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights thereafter will be to receive the applicable
redemption price.
At any time any person becomes an Acquiring Person and prior to such time as
such person, together with its affiliates becomes the beneficial owner of at
least 50% of the Company's outstanding Common Stock, the Company may, provided
that all necessary regulatory approvals have been obtained, exchange the Rights
(other than Rights owned by the Acquiring Person which become null and void), in
whole or in part, at a ratio of one share of Common Stock per Right, subject to
adjustment.
Until a Right is exercised, the holder has no rights as a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends or distributions.
The Company may, without the approval of any holder of the Rights, supplement or
amend any provision of the Rights Agreement, except the redemption window, the
Purchase Price or the redemption price; provided, however, that the Company's
disinterested directors have the right to amend the Purchase Price for a period
of six months from February 28, 1997.
Common Stock purchasable upon exercise of the Rights will not be redeemable.
During the time that a majority of the Company's directors are disinterested,
as defined in the Rights Agreement, and for a period of six months after the
time less than a majority of the Company's directors are disinterested, but in
no event after February 28, 1998, all decisions or actions to be taken pursuant
to the Rights Agreement will only be taken by the disinterested directors.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors prior to the time a person or group has acquired beneficial
ownership of 15% or more of the Common Stock, because until such time, the
Rights may be redeemed by the Company at $0.001 per Right.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission and is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
