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EXHIBIT 1
AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
AND
AMERICAN STOCK TRANSFER AND TRUST COMPANY
Rights Agent
RIGHTS AGREEMENT
Dated as of February 2, 1999
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RIGHTS AGREEMENT
This Rights Agreement ("Rights Agreement"), is dated as of February 2,
1999, between American Residential Investment Trust, Inc., a Maryland
corporation (the "Company"), and American Stock Transfer and Trust Company (the
"Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company on February 2, 1999 (i)
authorized the issuance and declared a dividend of one right ("Right") for each
share of the Common Stock of the Company ("Common Stock") outstanding as of the
Close of Business (as such term is hereinafter defined) on February 26, 1999
(the "Record Date"), each Right representing the right to purchase one
one-hundredth of a share of Series A Preferred Stock of the Company having the
rights, powers and preferences set forth in the form of Certificate attached
hereto as Exhibit A upon the terms and subject to the conditions hereinafter set
forth, and (ii) further authorized the issuance of one Right with respect to
each share of Common Stock of the Company that shall become outstanding between
February 26, 1999, and the Distribution Date (as such term is hereinafter
defined);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties agree as follows:
1. Certain Definitions. For purposes of this Rights Agreement the
following terms shall 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 such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, without the prior approval of the Board of Directors, shall be the
Beneficial Owner (as such term is hereinafter defined) of fifteen percent (15%)
or more of the outstanding Common Stock; provided, however, that in no event
shall a Person who or which, together with all Affiliates and Associates of such
Person, is the Beneficial Owner of less than 15% of the Company's outstanding
shares of Common Stock, become an Acquiring Person solely as a result of a
reduction of the number of shares of outstanding Common Stock, including
repurchases of outstanding shares of Common Stock by the Company, which
reduction increases the percentage of outstanding shares of Common Stock
beneficially owned by such Person, provided, however, that if a Person shall
become the Beneficial Owner of 15% or more of the Company's outstanding shares
of Common Stock then outstanding solely by reason of a reduction of the number
of shares of outstanding Common Stock, and shall thereafter become the
Beneficial Owner of any additional shares of Common Stock of the Company, then
such Person shall be deemed to be an "Acquiring Person" unless upon the
consummation of the acquisition of such additional shares of Common Stock such
person does not own fifteen percent (15%) or more of the shares of Common Stock
then outstanding, and provided further, that an Acquiring Person shall not
include an Exempt Person (as such term is hereinafter defined) or a
Grandfathered Person (as such term is hereinafter defined); provided further
that a Grandfathered Person shall become an Acquiring Person if, (i) without the
prior approval of the Board of Directors, the Grandfathered Person becomes the
Beneficial Owner of more than 25% of the Company's Common Stock; but (ii) a
Grandfathered Person shall not become an Acquiring Person solely by reason of a
reduction of the number of shares of outstanding Common Stock provided, however,
that if such Grandfathered Person
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shall thereafter acquire for value any additional shares of Common Stock of the
Company, then such Grandfathered Person shall be deemed to be an "Acquiring
Person" unless upon the consummation of the acquisition of such additional
shares of Common Stock such person does not own twenty percent (20%) or more of
the shares of Common Stock then outstanding. Notwithstanding the foregoing, if
the Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently (including,
without limitation, because (i) such Person was unaware that it beneficially
owned a percentage of Common Stock that would otherwise cause such Person to be
an "Acquiring Person" or (ii) such Person was aware of the extent of its
Beneficial Ownership but had no actual knowledge of the consequences of such
Beneficial Ownership under this Rights Agreement) and without any intention of
changing or influencing control of the Company, and such Person divests as
promptly as practicable a sufficient number of shares of Common Stock so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be or to have become an "Acquiring Person" for any purposes of this Rights
Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), as in effect on the date of this Rights Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has (A) the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities), whether or not in writing, or
upon the exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
securities tendered pursuant to a tender or exchange offer made by such Person
or any of such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or (B) the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act, or any comparable or
successor rule), including pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own", any
securities if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of the Exchange Act and (2) is not also
then reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding, voting
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except as described in the proviso to clause (B) of subparagraph (ii) of this
Section 1(c) or disposing of any securities of the Company; provided, however,
that no Person who is an officer, director or employee of an Exempt Person shall
be deemed, solely by reason of such Person's status or authority as such, to be
the "Beneficial Owner" of, to have "Beneficial Ownership" of or to "beneficially
own" any securities that are "beneficially owned" (as defined in this Section
1(c)), including, without limitation, in a fiduciary capacity, by an Exempt
Person or by any other such officer, director or employee of an Exempt Person.
For all purposes of this Rights Agreement, any calculation of the number
of shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date hereof.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York or the
State of California are authorized or obligated by law or executive order to
close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
San Diego time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., San Diego time, on the next succeeding
Business Day.
(f) "Common Stock" when used with reference to the Company shall
mean the Common Stock of the Company. "Common Stock" when used with reference to
any Person other than the Company which shall be organized in corporate form
shall mean the capital stock or other equity security with the greatest per
share voting power of such Person or, if such Person is a Subsidiary of or is
controlled by another Person, the Person which ultimately controls such
first-mentioned Person. "Common Stock" when used with reference to any Person
other than the Company which shall not be organized in corporate form shall mean
units of beneficial interest which shall represent the right to participate in
profits, losses, deductions and credits of such Person and which shall be
entitled to exercise the greatest voting power per unit of such Person.
(g) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(h) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(i) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(j) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(k) "Equivalent Preferred Stock" shall have the meaning set forth
in Section 11(b) hereof.
(l) "Exchange Act" shall have the meaning set forth in Section 1
hereof.
(m) "Exempt Person" shall mean the Company or any Subsidiary of
the Company, including, without limitation, in its fiduciary capacity, any
employee benefit plan or employee stock plan
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of the Company or of any Subsidiary of the Company, or any Person, organized,
appointed, established or holding Common Stock for or pursuant to the terms of
any such plan or any Person funding other employee benefits for employees of the
Company or any Subsidiary of the Company.
(n) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(o) "Flip-In Event" shall mean any event described in Section
11(a)(ii)(A), 11(a)(ii)(B) or 11(a)(ii)(C) hereof.
(p) "Flip-In Exercise Payment" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(q) "Flip-In Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(r) "Flip-Over Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
(s) "Flip-Over Exercise Payment" shall have the meaning set forth
in Section 13(a) hereof.
(t) "Grandfathered Person" shall mean the following Persons: MDC
REIT Holdings, LLC provided that such Person shall cease to be a Grandfathered
Person at such time as Person ceases to Beneficially Own in excess of 15% of the
Company's Common Stock, Home Asset Management Corp., Crescent/Mach I Partners,
L.P., TCW/Crescent Mezzanine Investment Partners, L.P., TCW/Crescent Mezzanine
Partners, L.P., TCW/Crescent Mezzanine Trust, TCW Shared Opportunity Fund II,
L.P., XxXxxx De Leeuw & Co. II, L.P., XxXxxx De Leeuw & Co. Associates, L.P.,
XxXxxx De Leeuw & Co. Offshore (Europe), L.P., XxXxxx De Leeuw & Co. Offshore
(Asia), L.P., Xxxxxx X. Xxxxx 1991 Family Trust, Xxxxxx X. Xxxxx 1994 Family
Trust, Xxxxxxxxx X. Xxxxx 1990 Family Trust, PK Partners, Xxxxxxxxx X. Xxxx
Revocable Trust, Xxxxxx 1991 Trust, Xxxxxxx Partners, PLF Partners, Saw Island
Partners, Xxxxxx Xxxxxxxx along with any Affiliates of the aforementioned
Persons and the Grandfathered Transferees. Pursuant to Section 1 (a), a
Grandfathered Person can Beneficially Own (which includes such Person's
Affiliates) up to twenty five percent (25%) of the Company's Common Stock.
(u) "Grandfathered Transferees" shall mean Persons that are
transferees or subsequent transferees of the Grandfathered Persons; provided,
however, that such Person shall no longer be a Grandfathered Transferee if such
Person becomes the Beneficial Owner of more than the greater of (i) 15% of the
Company's Common Stock, or (ii) the amount actually transferred to such Person
by a Grandfathered Person. Provided further, that if such Grandfathered
Transferee transfers any shares of the Company's Common Stock, and thereafter
becomes the Beneficial Owner of any additional shares of outstanding Common
Stock, then such Person shall no longer be a Grandfathered Transferee.
(v) "NASDAQ" shall have the meaning set forth in Section 9(b)
hereof.
(w) "NYSE" shall have the meaning set forth in Section 9(b)
hereof.
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(x) "Offer" shall mean a written proposal delivered to the
Company by (i) a Grandfathered Person who is not an Acquiring Person, or (ii)
any Person who both beneficially owns 5% or less of the outstanding shares of
Common Stock as of the date such proposal is delivered to the Company and as of
the date of any Special Meeting, as herein defined and who has not within one
year prior to the delivery of such written proposal beneficially owned in excess
of 5% of the outstanding shares of Common Stock and as to both (i) and (ii) has
not publicly disclosed, or caused the public disclosure of, any intention which
relates to or would result in the acquisition of influence or control of the
Company (such Person in either (i) or (ii) being referred to as an "Offeror"),
and which proposal:
(i) provides for the acquisition of all of the outstanding
shares of Common Stock held by any Person other than the
Offeror and its Affiliates for cash or immediately
marketable publicly traded securities at a price which is
at least 15% higher than the "current market price" per
share of Common Stock on the day immediately preceding the
date on which the Offeror's proposal is delivered to the
Company (as determined pursuant to Section 11(d)(i) hereof
for the purposes of computations made pursuant to Section
11(a)(iii) hereof, but utilizing the ten (10) consecutive
Trading Days immediately preceding the date on which the
Offeror's proposal is delivered to the Company);
(ii) states that the Offeror has obtained written
financing commitments from recognized financing sources,
and/or has on hand cash or cash equivalents, for the full
amount of all financing necessary to consummate the Offer
(including amounts necessary to refinance any indebtedness
of the Company or its subsidiaries which will become due
upon consummation of the Offer);
(iii) submits a fairness opinion from a nationally
recognized investment banker stating that from a financial
point of view, the consideration to be offered to the
stockholders of the Company is fair; and
(iv) requests the Company to call a special meeting of
the holders of Common Stock for the purpose of voting on a
resolution requiring the Board of Directors to redeem the
Rights and contains a written agreement of the Offeror to
pay half of the Company's costs of such special meeting
(inclusive of the Company's costs of preparing and mailing
proxy material for its own solicitation).
(y) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity.
(z) "Preferred Stock" shall mean the Series A Preferred Stock,
$0.01 par value of the Company having the rights, powers and preferences set
forth in Exhibit A hereto, and, to the extent that there is not a sufficient
number of shares of Series A Preferred Stock authorized to permit the full
exercise of the Rights, any other series of Preferred Stock, $0.01 par value, of
the Company designated for such purpose containing terms substantially similar
to the terms of the Series A Preferred Stock.
(aa) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
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(bb) "Purchase Price" shall have the meaning set forth in Section
4(a) hereof.
(cc) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of the Rights Agreement.
(dd) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(ee) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(ff) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(gg) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(hh) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such or such earlier date as a majority of the directors shall become
aware of the existence of an Acquiring Person.
(ii) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(jj) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary voting
power sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or indirectly, by
such Person and any corporation or other entity that is otherwise controlled by
such Person.
(kk) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(ll) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(mm) "Triggering Event" shall mean any event described in Section
11(a)(ii)(A), 11(a)(ii)(B) or 11(a)(ii)(C) or Section 13 hereof.
(nn) "Voting Power" shall mean the voting power of all securities
of the Company then outstanding and generally entitled to vote for the election
of directors of the Company.
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 binding on the Rights Agent and the
holders of the Rights.
2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agents and any Co-Rights Agents
shall be as the Company shall determine.
3. Issuance of Right Certificates.
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(a) Until the earlier of (i) the Stock Acquisition Date or (ii)
the date of the commencement by any Person (other than an Exempt Person) of, or
of the first public announcement of the intent of any Person (other than an
Exempt Person) to commence (which intention to commence remains in effect for
five business days after such announcement), a tender or exchange offer (other
than an Offer) upon the successful consummation of which such Person, together
with its Affiliates and Associates, would be the Beneficial Owner of 15% or more
of the outstanding Common Stock (irrespective of whether any shares are actually
purchased pursuant to any such offer) (including any such date which is after
the date of this Rights Agreement and prior to the issuance of the Rights; ten
days after the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(c) hereof) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock and not by separate
Right Certificates, and (y) each Right will be transferable only in connection
with the transfer of a share (subject to adjustment as hereinafter provided) of
Common Stock. As soon as practicable after the Distribution Date, the Rights
Agent will mail, by first-class, postage prepaid mail, to each record holder of
the Common Stock as of the Close of Business on the Distribution Date, as shown
by the records of the Company, to the address of such holder shown on such
records, a Right certificate in substantially the form of Exhibit B hereto
("Right Certificate") evidencing one Right for each share of Common Stock so
held. As of and after the Distribution Date the Rights will be evidenced solely
by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock,
substantially in the form attached hereto as Exhibit C ("Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of Common Stock as of
the Close of Business on the Record Date, at the address of such holder shown on
the records of the Company.
(c) Rights shall be issued in respect of all shares of Common
Stock that are issued after the Record Date prior to the earlier of the
Distribution Date or the Expiration Date. With respect to certificates
representing such shares of Common Stock, the Rights will be evidenced by such
certificates for Common Stock registered in the names of the holders thereof
together with the Summary of Rights. Until the Distribution Date (or, if
earlier, the Expiration Date), the surrender for transfer of any certificate for
Common Stock outstanding on the Record Date (with or without a copy of the
Summary of Rights attached thereto), shall also constitute the surrender for
transfer of the Rights associated with the Common Stock represented thereby.
(d) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock) after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
"THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN AMERICAN
RESIDENTIAL INVESTMENT TRUST, INC. AND AMERICAN STOCK TRANSFER AND TRUST
COMPANY, AS RIGHTS AGENT, DATED AS OF [DATE OF RIGHTS AGREEMENT], AS THE
SAME MAY BE AMENDED FROM TIME TO TIME (THE "RIGHTS AGREEMENT"), THE
TERMS OF WHICH ARE INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH
IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF AMERICAN RESIDENTIAL
INVESTMENT TRUST, INC. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE
RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY
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SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS
CERTIFICATE. AMERICAN RESIDENTIAL INVESTMENT TRUST, INC. WILL MAIL TO
THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT
CHARGE AFTER RECEIPT BY IT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN
CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO,
BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) OR AN ASSOCIATE OR
AFFILIATE (AS DEFINED IN THE RIGHTS AGREEMENT) THEREOF AND CERTAIN
TRANSFEREES THEREOF WILL BE NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE."
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the Distribution Date, be evidenced by such certificates alone, and registered
holders of Common Stock shall also be the registered holders of the associated
Rights, and the surrender for transfer of any such certificate shall also
constitute the surrender for transfer of the Rights associated with the Common
Stock represented thereby. In the event that the Company purchases or acquires
any shares of Common Stock after the Record Date but prior to the earlier of the
Distribution Date, the Redemption Date or the Expiration Date, any Rights
associated with such shares of Common Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the shares of Common Stock no longer outstanding.
Notwithstanding this paragraph (d), the omission of a legend shall not
affect the enforceability of any part of this Rights Agreement or the rights of
any holder of the Rights.
4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof), when, as and if
issued, shall be substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Rights Agreement, or as may be required
to comply with any 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
Sections 11, 13 and 22 hereof, the Right Certificates evidencing the Rights
issued on the Record Date whenever such certificates are issued, shall be dated
as of the Record Date and the Right Certificates evidencing Rights to holders of
record of Common Stock issued after the Record Date shall be dated as of the
Record Date but shall also be dated to reflect the date of issuance of such
Right Certificate. On their face, Right Certificates shall entitle the holders
thereof to purchase, for each Right, one one-hundredth of a share of Preferred
Stock, or other securities or property as provided herein, as the same may from
time to time be adjusted as provided herein, at the price per share of Thirty
Dollars ($30.00), as the same may from time to time be adjusted as provided
herein (the "Purchase Price").
(b) Notwithstanding any other provision of this Rights Agreement,
any Right Certificate that represents Rights that are or were at any time on or
after the earlier of the Stock Acquisition Date or the Distribution Date
beneficially owned by an Acquiring Person or any Affiliate or Associate thereof
(or any transferee of such Rights) shall have impressed on, printed on, written
on or otherwise affixed to it (if the Company or the Rights Agent has knowledge
that such Person is an Acquiring Person or an Associate or Affiliate thereof or
transferee of such Persons or a nominee of any of the foregoing) the following
legend:
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"THE BENEFICIAL OWNER OF THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE IS AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE (AS
DEFINED IN THE RIGHTS AGREEMENT) OF AN ACQUIRING PERSON OR A SUBSEQUENT
HOLDER OF SUCH RIGHT CERTIFICATES BENEFICIALLY OWNED BY SUCH PERSONS.
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
ARE NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE AS PROVIDED IN THE
RIGHTS AGREEMENT."
The provisions of Section 11(a)(ii) and Section 24 of this Rights Agreement
shall be operative whether or not the foregoing legend is contained on any such
Right Certificates.
5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chief Executive Officer, its President or any Vice President,
either manually or by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned, either manually or by
facsimile, 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 Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at one of its offices designated for such purposes, records
for registration and transfer of the Right Certificates issued hereunder. Such
records shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates, the date of each of the Right Certificates and the
certificate numbers for each of the Right Certificates.
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii) and 14
hereof, at any time after the Close of Business on the Distribution Date and at
or prior to the Close of Business on the Expiration Date, any Right Certificate
or Certificates (other than Right Certificates representing Rights that have
become void pursuant to Section 11(a)(ii) hereof or that have been exchanged
pursuant to Section 24 hereof) may be (i) transferred or (ii) split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of shares of Preferred Stock or
other securities as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer any
Right Certificate shall surrender the Right Certificate at the office of the
Rights Agent designated for such purposes with the form of assignment on the
reverse side thereof duly endorsed (or enclose with such Right Certificate a
written instrument of transfer in form satisfactory to the Company and the
Rights Agent), duly executed by the
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registered holder thereof or his attorney duly authorized in writing, and with
such signature guaranteed by a member of a securities approved medallion
program. Any registered holder desiring to split up, combine or exchange any
Right Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
split up, combined or exchanged at the principal office of the Rights Agent.
Thereupon the Rights Agent shall, subject to Sections 4(b), 7(e), 11 and 14
hereof, countersign (by manual or facsimile signature) and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, if requested by the Company, reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the Company
will execute and deliver a new Right Certificate of like tenor to the Rights
Agent for delivery to the registered owner in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 11(a)(ii) hereof, the Rights shall become
exercisable, and may be exercised to purchase Preferred Stock, except as
otherwise provided herein, in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed (with such
signature duly guaranteed), to the Rights Agent at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, together with payment of the Purchase Price with respect to each
Right exercised, subject to adjustment as hereinafter provided, at or prior to
the Close of Business on the earlier of (i) the Final Expiration Date which is
ten years from the date of the Rights Agreement (the "Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof
(such date being herein referred to as the "Redemption Date") or (iii) the time
at which all such Rights are exchanged as provided in Section 24 hereof (the
earliest of (i), (ii) and (iii) being herein referred to as the "Expiration
Date").
(b) The Purchase Price and the number of shares of Preferred
Stock or other securities or consideration to be acquired upon exercise of a
Right shall be subject to adjustment from time to time as provided in Sections
11 and 13 hereof. The Purchase Price shall be payable in lawful money of the
United States of America, in accordance with Section 7(c) hereof.
(c) Except as provided in Section 11(a)(ii) hereof, upon receipt
of a Right Certificate with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) or so much thereof as is necessary for
the shares to be purchased and an amount equal to any applicable transfer tax,
by cash, certified check or official bank check payable to the order of the
Company or the Rights Agent, the Rights Agent shall, subject to Section 20(k),
thereupon promptly (i) requisition from any transfer agent of the Preferred
Stock (or make available if the Rights Agent is the transfer agent) certificates
for the number of shares of Preferred Stock so elected to be purchased and the
Company will comply and hereby authorizes and directs such transfer agent to
comply with all such requests, (ii) requisition from the
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Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14(b) hereof, and (iii) promptly after receipt of
such Preferred Stock certificates cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, and, when appropriate, after
receipt promptly deliver such cash to or upon the order of the registered holder
of such Right Certificate. In the event of a purchase of securities, other than
Preferred Stock, pursuant to Section 11(a) or Section 13 hereof, the Rights
Agent shall promptly take the appropriate actions corresponding to the foregoing
clauses (i) through (iii). In the event that the Company is obligated to issue
other securities of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate.
(d) Except as otherwise provided herein, in case the registered
holder of any Right Certificate shall exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless 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 Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise. transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
9. Reservation and Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that at all times it will
cause to be reserved and kept available, out of and to the extent of its
authorized and unissued shares of Preferred Stock not reserved for another
purpose (and, following the occurrence of a Triggering Event, other securities),
the number of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, other securities) that, as provided in this Rights Agreement,
including Section 11(a)(iii) hereof, will be sufficient to permit the exercise
in full of all outstanding Rights, provided, however, that the Company shall not
be required to reserve and keep available shares of Preferred Stock or other
securities sufficient to permit the exercise in full of all outstanding Rights
pursuant to the adjustments set forth in Section
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11(a)(ii), Section 11(a)(iii) or Section 13 hereof unless, and only to the
extent that, the Rights become exercisable pursuant to such adjustments.
(b) The Company shall (i) use its best efforts to cause, from and
after such time as the Rights become exercisable, the Rights and all shares of
Preferred Stock (and following the occurrence of a Triggering Event, other
securities) issued or reserved for issuance upon exercise thereof to be reported
by the New York Stock Exchange ("NYSE") or such other system then in use, and if
the Preferred Stock shall become listed on any national securities exchange, to
cause, from and after such time as the Rights become exercisable, the Rights and
all shares of Preferred Stock (and, following the occurrence of a Triggering
Event, other securities) issued or reserved for issuance upon exercise thereof
to be listed on such exchange upon official notice of issuance upon such
exercise and (ii) if then necessary, to permit the offer and issuance of such
shares of Preferred Stock (and, following the occurrence of a Triggering Event,
other securities), register and qualify such share of Preferred Stock (and,
following the occurrence of a Triggering Event, other securities) under the
Securities Act and any applicable state securities or "blue sky" laws (to the
extent exemptions therefrom are not available), cause such registration
statement and qualifications to become effective as soon as possible after such
filing and keep such registration and qualifications effective until the
Expiration Date of the Rights. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days, the exercisability of the Rights in
order to prepare and file a registration statement under the Securities Act and
permit it to become effective. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this Rights
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement under the Securities Act (if
required) shall have been declared effective.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock (and
following the occurrence of a Triggering Event, other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price in respect thereof), be duly
and validly authorized and issued and fully paid and nonassessable shares in
accordance with applicable law.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock (or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates for Preferred Stock (or other securities, as the case may be) upon
exercise of Rights in a name other than that of, the registered holder of the
Right Certificate, and the Company shall not be required to issue or deliver a
Right Certificate or certificate for Preferred Stock (or other securities, as
the case may be) to a person other than such registered holder until any such
tax shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock (or other securities, as the case may
be) is issued upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the shares of Preferred Stock (or other
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securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate, as such, shall not be entitled to any rights
of a stockholder of the Company with respect to the shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
11. Adjustments to Number and Kind of Shares, Number of Rights or
Purchase Price. The number and kind of shares subject to purchase upon the
exercise of each Right, the number of Rights outstanding and the Purchase Price
are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Rights Agreement (A) declare or pay any dividend on Preferred Stock
payable in shares of Preferred Stock, (B) subdivide or split the outstanding
shares of Preferred Stock into a greater number of shares, (C) combine or
consolidate the outstanding shares of Preferred Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of Preferred Stock,
or (D) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and kind of
shares of capital stock or other securities, which, if such Right had been
exercised immediately prior to such date, the holder thereof would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date of this Rights
Agreement, directly or indirectly, (1) shall consolidate with or merge with and
into the Company or any of its Subsidiaries or otherwise combine with the
Company or any of its Subsidiaries and the Company or such Subsidiary shall be
the continuing or surviving corporation of such consolidation, merger or
combination and the Common Stock of the Company shall remain outstanding and no
shares thereof shall be changed into or exchanged for stock or other securities
of the Company or of any other Person or cash or any other property, or (2)
shall, in one or more transactions, other than in connection with the exercise
of a Right or Rights and other than in connection with the exercise or
conversion of securities exercisable for or convertible into securities of the
Company or of any Subsidiary of the Company, transfer any assets or property to
the Company or any of its Subsidiaries in exchange (in whole or in part) for any
shares of any class of capital stock of the Company or any of its Subsidiaries
or any securities exercisable for or convertible into shares of any
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class of capital stock of the Company or any of its Subsidiaries, or otherwise
obtain from the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital stock of the
Company or any of its Subsidiaries or any securities exercisable for or
convertible into shares of any class of capital stock of the Company or any of
its Subsidiaries (other than as part of a pro rata offer or distribution by the
Company or such Subsidiary to all holders of such shares), or (3) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire
(other than as a pro rata dividend) or dispose, to, from or with, as the case
may be, in one transaction or a series of transactions, the Company or any of
its Subsidiaries, assets (including securities) on terms and conditions less
favorable to the Company or such Subsidiary than the Company or such Subsidiary
would be able to obtain in arm's-length negotiation with an unaffiliated third
party, or (4) shall receive any compensation from the Company or any of its
Subsidiaries for services other than compensation for employment as a regular or
part-time employee, or fees for serving as a director, at rates in accordance
with the Company's (or its Subsidiary's) past practices, or (5) shall receive
the benefit, directly or indirectly (except proportionately as a stockholder),
of any loans, advances, guarantees, pledges or other financial assistance or any
tax credits or tax advantage provided by the Company or any of its Subsidiaries,
or (6) shall engage in any transaction with the Company (or any of its
Subsidiaries) involving the sale, license, transfer or grant of any right in, or
disclosure of, any patents, copyrights, trade secrets, trademarks, know-how or
any other intellectual or industrial property rights recognized under any
country's intellectual property laws which the Company (including its
Subsidiaries) owns or has the right to use on terms and conditions not approved
by the Board; or
(B) any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person; or
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of securities (including any reverse
stock split), or any recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of its
Subsidiaries (whether or not with or into or otherwise involving an Acquiring
Person or any Affiliate or Associate of such Acquiring Person) which has the
effect, directly or indirectly, of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity securities of the Company
or any of its Subsidiaries, or securities exercisable for or convertible into
equity securities of the Company or any of its Subsidiaries, which is directly
or indirectly beneficially owned by any Acquiring Person or any Affiliate or
Associate of any Acquiring Person (any of (A), (B) or (C) being referred to
herein as a "Flip-In Event"), then upon the first occurrence of such Flip-In
Event (A) the Purchase Price shall be adjusted to be the Purchase Price in
effect immediately prior to the Flip-In Event multiplied by the number of one
one-hundredth of a share of Preferred Stock for which a Right was exercisable
immediately prior to such Flip-In Event, whether or not such Right was then
exercisable, and (B) each holder of a Right, except as otherwise provided in
this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the
right to receive, upon exercise thereof at a price equal to the Purchase Price
(as so adjusted), in accordance with the terms of this Rights Agreement and in
lieu of shares of Preferred Stock, such number of shares of Common Stock as
shall equal the result obtained by dividing the Purchase Price (as so adjusted)
by 50% of the Current Market Price per share of the Common Stock (determined
pursuant to Section 11(d) hereof) on the date of such Flip-In Event; provided,
however, that the Purchase Price (as so adjusted) and the number of shares of
Common Stock so receivable upon the exercise of a Right shall, following the
Flip-In Event, be subject to further adjustment as appropriate in accordance
with Section 11(f) hereof. Notwithstanding anything in this Rights Agreement to
the
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contrary, however, from and after the Flip-In Event, any Rights that are
beneficially owned by (x) any Acquiring Person (or any Affiliate or Associate of
any Acquiring Person), (y) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the Flip-In Event or (z)
a transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-In Event pursuant to
either (I) a transfer from the Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (II) a transfer
which the Board of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions of this
paragraph, and subsequent transferees of such Persons, shall be void without any
further action and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this Rights
Agreement. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11(a)(ii) are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of its
failure to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. From and after the Flip-In
Event, no Right Certificate shall be issued pursuant to Section 3 or Section 6
hereof that represents Rights that are or have become void pursuant to the
provisions of this paragraph, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become void pursuant to the
provisions of this paragraph shall be canceled.
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of Rights in accordance with the
foregoing subparagraph (ii) such number or fractions of shares of Preferred
Stock having an aggregate current market value equal to the Current Market Price
of a share of Common Stock. In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Board of Directors shall, to the extent permitted by
applicable law and any material agreements then in effect to which the Company
is a party (A) determine the excess (such excess, the "Spread") of (1) the value
of the shares of Common Stock issuable upon the exercise of a Right in
accordance with the foregoing subparagraph (ii) (the "Current Value") over (2)
the Purchase Price (as adjusted in accordance with the foregoing subparagraph
(ii)), and (B) with respect to each Right (other than Rights which have become
void pursuant to the foregoing subparagraph (ii)), make adequate provision to
substitute for the shares of Common Stock issuable in accordance with the
foregoing paragraph (ii) upon exercise of the Right and payment of the Purchase
Price (as adjusted in accordance therewith), (1) cash, (2) a reduction in such
Purchase Price, (3) shares of Preferred Stock or other equity securities of the
Company (including, without limitation, shares or fractions of shares of
preferred stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of Common Stock, are
deemed in good faith by the Board of Directors to have substantially the same
value as the shares of Common Stock (such shares of Preferred Stock and shares
or fractions of shares of preferred stock are being hereinafter referred to as
"Common Stock Equivalents", (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having a value which, when
added to the value of the shares of Common Stock actually issued upon exercise
of such Right, shall have an aggregate value equal to the Current Value (less
the amount of any reduction in such Purchase Price), where such aggregate value
has been determined by the Board of Directors upon the advice of a nationally
recognized investment banking firm selected in good faith by the Board of
Directors; provided, however, that if the Company shall not make adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the date of the Flip-In Event (the "Flip-in Trigger Date"), then the
Company shall be obligated to deliver, to the extent permitted by applicable law
and any material agreements then in effect to which the
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Company is a party, upon the surrender for exercise of a Right and without
requiring payment of such Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock and/or Common Stock Equivalents
could be authorized for issuance upon exercise in full of the Rights, the thirty
(30) day period set forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Flip-In Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such additional
shares or Common Stock Equivalents (such thirty (30) day period, as it may be
extended, is hereinafter called the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the second
and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide,
subject to the last sentence of Section 11(a)(ii) hereof, that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to the first sentence of
Section 11(a)(iii) and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock shall be the Current
Market Price per share of the Common Stock on the Flip-In Trigger Date and the
per share or per unit value of any Common Stock Equivalent shall be deemed to
equal the Current Market Price per share of the Common Stock on such date. The
Board of Directors may, but shall not be required to, establish procedures to
allocate the right to receive Common Stock upon the exercise of the Rights among
holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance
of rights (other than the Rights), options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five calendar days after such record date) Preferred
Stock, shares having the same rights, privileges and preferences as the
Preferred Stock ("equivalent preferred stock") or securities convertible into
Preferred Stock or equivalent preferred stock at a price per share of Preferred
Stock or equivalent preferred stock (or having a conversion price per share, if
a security convertible into Preferred Stock or equivalent preferred stock) less
than the Current Market Price per share of Preferred Stock on such record date,
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Market Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or equivalent preferred stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such non-cash 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. Shares of Preferred
Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed, and in the event that
such
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rights or warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash, assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in stock
other than Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Current Market Price per share of Preferred Stock on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the denominator of which shall be
such Current Market Price per share of Preferred Stock. Such adjustments shall
be made successively whenever such a record date is fixed, and in the event that
such distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of the Common Stock for the thirty
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for purpose of computations made pursuant to Section
11(a)(iii) hereof, the "Current Market Price" per share of the Common Stock on
any date shall be deemed to be the average of the daily closing prices per share
of the Common Stock for the ten consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market Price
per share of the Common Stock is determined during a period following the
announcement by the issuer of the Common Stock of (i) any dividend or
distribution on the Common Stock (other than a regular quarterly cash dividend
and other than the Rights), (ii) any subdivision, combination or
reclassification of the Common Stock, and prior to the expiration of the
requisite thirty Trading Day or ten 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 occurs, then, and in each
such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted sale price or, if
not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use,
or, if on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board of Directors of the Company. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on such date as
determined in
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good faith by the Board of Directors of the Company shall be used and shall be
binding on the Rights Agent. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading is open for the transaction of business or, if
the shares of Common Stock are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is not publicly held or
not so listed or traded, "Current Market Price" per share shall mean the fair
value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per share (or one one-hundredth of a share) of Preferred
Stock shall be determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last sentence
thereof). If the Current Market Price per share (or one one-hundredth of a
share) of Preferred Stock cannot be determined in the manner provided above or
if the Preferred Stock is not publicly held or listed or traded in a manner
described in clause (i) of this Section 11(d), the "Current Market Price" per
share of Preferred Stock shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Rights Agreement) multiplied by the Current
Market Price per share of the Common Stock and the "Current Market Price" per
one one-hundredth of a share of Preferred Stock shall, be equal to the Current
Market Price per share of the Common Stock (as appropriately adjusted). If
neither the Common Stock nor the Preferred Stock is publicly held or so listed
or traded, "Current Market Price" per shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock
or other share or one-hundred-thousandth of a share of Preferred Stock, as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Preferred Stock
contained in Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m)
hereof, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect
to the Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the
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number of shares of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredth of a share of Preferred Stock (calculated to the nearest
one-hundred-thousandth) obtained by (i) multiplying (x) the number of one
one-hundredth of a share of Preferred 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.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price or any adjustment to the number of shares of Preferred
Stock for which a Right may be exercised made pursuant to Sections 11(a)(i),
11(b) or 11(c), to adjust the number of Rights in lieu of any adjustment in the
number of shares of Preferred Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of shares of Preferred Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one hundred-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
ten days later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Preferred Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of shares which
were expressed in the initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the shares of
Common Stock, Preferred Stock or other capital stock issuable upon exercise of
the Rights, the Company shall take any corporate action, including using
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its best efforts to obtain any required stockholder approvals, 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, Preferred
Stock or other capital stock at such adjusted Purchase Price. If upon any
exercise of the Rights, a holder is to receive a combination of Common Stock and
Common Stock Equivalents, a portion of the consideration paid upon such
exercise, equal to at least the then par value of a share of Common Stock of the
Company, shall be allocated as the payment for each share of Common Stock of the
Company so received.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect 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 of Preferred Stock and other capital stock or
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance for cash of any shares of
Preferred Stock at less than the Current Market Price, (iii) issuance for cash
of shares of Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person, (ii)
merge with or into any other Person, or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, if (x) at the time of or immediately after such
consolidation, merger or sale there are any charter or by-law provisions or any
rights, warrants or other instruments or securities outstanding or agreements in
effect which substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates. The Company shall not
consummate any such consolidation, merger or sale unless prior thereto the
Company and such other Person shall have executed and delivered to the Rights
Agent a supplemental agreement evidencing compliance with this subsection.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, Section 24 or Section 27
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the Rights.
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(p) Anything in this Rights Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Record Date and prior to the Distribution Date (i) declare or pay any dividend
on the outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event equals the result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event by a fraction,
the numerator or which shall be the number of shares of Common Stock outstanding
immediately prior to the occurrence of such event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately following
the occurrence of such event.
12. Certification of Adjustments. Whenever an adjustment is made as
provided in Sections 11 and 13 hereof, the Company shall (a) promptly prepare a
certificate signed by its Chief Executive Officer, its President or any Vice
President and by the Treasurer or any Assistant Treasurer or the Secretary or
any Assistant Secretary of the Company setting forth such adjustment and a brief
statement of the facts giving rise to such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the Preferred Stock and the
Common Stock a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of Common Stock) in accordance
with Section 26 hereof. Notwithstanding the foregoing sentence, the failure of
the Company to give such notice shall not affect the validity of or the force or
effect of or the requirement for such adjustment. The Rights Agent shall be
fully protected in relying on any certificate prepared by the Company pursuant
to Sections 11 and 13 and on any adjustment therein contained and shall not be
deemed to have knowledge of any such adjustment unless and until it shall have
received such certificate. Any adjustment to be made pursuant to Sections 11 and
13 of this Rights Agreement shall be effective as of the date of the event
giving rise to such adjustment.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that following the first occurrence of a Flip-In
Event, directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person or Persons and the Company shall not be the
surviving or continuing corporation of such consolidation or merger, or (y) any
Person or Persons shall consolidate with, or merge with and into, the Company,
and the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or of the Company or
cash or any other property other than, in the case of the transactions described
in subparagraphs (x) or (y), a merger or consolidation which would result in all
of the Voting Power represented by the securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the surviving entity) all
of the Voting Power represented by the securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation and
the holders of such securities not having changed as a result of such
transactions), or (z) the Company or one or more of its Subsidiaries shall sell,
mortgage or otherwise transfer to any other Person or any Affiliate or Associate
of such Person, in one transaction, or a series of related transactions,
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assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole), then, on the first
occurrence of any such event (a "Flip-Over Event"), proper provision shall be
made so that (i) each holder of a Right (other than Rights which have become
void pursuant to Section 11(a)(ii) hereof) shall thereafter have the right to
receive, upon the exercise thereof at the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof), in accordance with the
terms of this Rights Agreement and in lieu of shares of Preferred Stock or
Common Stock of the Company, such number of validly authorized and issued, fully
paid, non-assessable and freely tradable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall equal
the result obtained by dividing the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof) by 50% of the Current Market Price per
share of the Common Stock of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; provided, however, that the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof) and the number of shares
of Common Stock of such Principal Party so receivable upon exercise of a Right
shall be subject to further adjustment as appropriate in accordance with Section
11(f) hereof to reflect any events occurring in respect of the Common Stock of
such Principal Party after the occurrence of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Flip-Over Event, all the obligations and duties of the
Company pursuant to this Rights Agreement; (iii) the term "Company" for all
purposes of this Rights Agreement shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 hereof shall only apply to such Principal Party following the first
occurrence of a Flip-Over Event; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with Section 9 hereof) in connection
with the consummation of any such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; provided, however, that, upon the subsequent
occurrence of any merger, consolidation, sale of all or substantially all
assets, recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right, such
cash, shares, rights, warrants and other property which such holder would have
been entitled to receive had he, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y)
of the first sentence of Section 13(a) hereof; (A) the Person that is the issuer
of the securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, or, if there is more than one such issuer, the
issuer the Common Stock of which has the greatest aggregate market value or (B)
if no securities are so issued, (x) the Person that is the other party to the
merger or consolidation and that survives said merger or consolidation, or, if
there is more than one such Person, the Person the Common Stock of which has the
greatest market value or (y) if the Person that is the other party to the merger
or consolidation does not survive the merger or consolidation, the Person that
does survive the merger or consolidation (including the Company if it survives);
and
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(ii) in the case of any transaction described in (z) of
the first sentence in Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a party
to such transaction or transactions receives the same portion of the assets or
earning power so transferred or if the Person receiving the greatest portion of
the assets or earning power cannot be determined, whichever of such Persons as
is the issuer of Common Stock having the greatest aggregate market value of
shares outstanding;
provided, however, that in any such case described in the foregoing (b)(i) or
(b)(ii), (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 Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stocks
of all of which are and have been so registered, the term "Principal Party"
shall refer to whichever of such Persons is the issuer of the Common Stock
having the greatest market value of shares outstanding, or (3) if such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules set
forth in clauses (1) and (2) above shall apply to each of the owners having an
interest in the joint venture as if the Person owned by the joint venture was a
Subsidiary of both or all of such joint venturers, and the Principal Party in
each such case shall bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger,
sale or transfer referred to in Section 13(a) unless the Principal Party shall
have a sufficient number of authorized shares of its Common Stock that have not
been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Rights Agreement as the same shall
have been assumed by the Principal Party pursuant to Sections 13(a) and (b)
hereof and further providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party at its own expense
shall:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and 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 date of expiration of the Rights,
and similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall become listed on a national securities exchange, to list
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the Common Stock of
the Principal Party shall not be listed on a national securities exchange, to
cause the Rights and the securities purchased upon exercise of the Rights to be
reported by NYSE or such other system then in use;
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(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been exercised
shall thereafter be exercisable in the manner described in Section 13(a).
(d) Furthermore, in case the Principal Party which is to be a
party to a transaction referred to in this Section 13 has a provision in any of
its authorized securities or in its Certificate of Incorporation or By-laws or
other instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then Current
Market Price per share (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then current market price (other than to holders of
Rights pursuant to this Section 13) or (ii) providing for any special payment,
tax or similar provisions in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provisions of Section 13; then, in such
event, the Company hereby agrees with each holder of Rights that it shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the holders of record of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the then
current market value of a whole Right. For the purposes of this Section 14(a),
the then current market value of a Right shall be determined in the same manner
as the Current Market Price of a share of Common Stock shall be determined
pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred Stock
(other fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock). Fractions of shares of Preferred Stock in integral multiples
of one one-hundredth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depository receipts, pursuant to an appropriate
agreement between the Company and a depository selected by it, provided that
such
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agreement shall provide that the holders of such depository receipts shall have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of the shares of Preferred Stock represented by such
depository receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-hundredth of a share of Preferred Stock, the
Company may pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one one-hundredth of a share of Preferred Stock shall be the Current Market
Price of a share of Common Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Flip-In Event, the Company
shall not be required to issue fractions of shares or units of Common Stock or
Common Stock Equivalents or other securities upon exercise of the Rights or to
distribute certificates which evidence fractional shares of such Common Stock or
Common Stock Equivalents or other securities. In lieu of fractional shares or
units of such Common Stock or Common Stock Equivalents or other securities, the
Company may pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the Current Market Value of a share or unit of such Common Stock or
Common Stock Equivalent or other securities. For purposes of this Section 14(c),
the Current Market Value shall be determined in the manner set forth in Section
11(d) hereof for the Trading Day immediately prior to the date of such exercise
and, if such Common Stock Equivalent is not traded, each such Common Stock
Equivalent shall have the value of one one-hundredth of a share of Preferred
Stock.
(d) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares upon
exercise of a Right.
15. Rights of Action. All rights of action in respect of this Rights
Agreement, other than any rights of action vested in the Rights Agent pursuant
to Sections 18 and 20 below, are vested in the respective holders of record of
the Right Certificates (and, prior to the Distribution Date, the holders of
record of the Common Stock); and any holder of record of any Right Certificate
(or, prior to the Distribution Date, of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the Common Stock), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company or any other Person to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this Rights
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 Rights Agreement
and, accordingly, that they will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Rights Agreement. Holders of
Rights shall be entitled to recover the reasonable costs and expenses, including
attorneys' fees, incurred by them in any action to enforce the provisions of
this Rights Agreement.
16. Agreement of Right Holders. Every holder of a Right by accepting the
same consents and agrees with the Company and the Rights Agent and with every
other holder of a Right that:
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(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, 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 the Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent or the
transfer agent of the Common Stock) 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 Rights 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 Rights Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
17. Right Certificate Holder Not Deemed a Stockholder. No holder of a
Right, as such, shall be entitled to vote, receive dividends in respect of or be
deemed for any purpose to be the holder of Common Stock or any other securities
of the Company which may at any time be issuable upon the exercise of the
Rights, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote in the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends or subscription rights in respect
of any such stock or securities, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all service rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent for any thing done or omitted
to be done by the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including the cost and expenses of
defending against any claim of liability in the premises. The indemnity provided
herein shall survive the expiration of the Rights and the termination
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of this Rights Agreement. Anything in this Rights Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss damage and regardless of the form of action.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon any
Right Certificate, certificate for Common Stock or 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, guaranteed, verified or acknowledged, by the proper Person or
Persons.
19. Merger or Consolidation or Changed Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Rights Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Rights Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver such Right Certificates so countersigned; and
in case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificate shall have the full force provided in the Right Certificates and in
this Rights Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Rights Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted to be taken by it in good faith and in accordance with such
opinion.
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(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "Current Market Price") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by certificate signed by the
President or any Vice President and by the Treasurer or any Assistant Treasurer
or the Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Rights Agreement or in
the Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Sections 11, 13, 23 or 24 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of a
Certificate furnished pursuant to Section 12 describing any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock to
be issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any shares of Common Stock will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, the President or any Vice
President or the Secretary or any Assistant Secretary or 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. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on
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and/or after which such action shall be taken or such omission shall be
effective. Subject to Section 20(c) hereof, the Rights Agent shall not be liable
for any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become peculiarly 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 the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other 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 Rights Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise of transfer without first
consulting with the Company.
21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Rights Agreement
upon 30 days' notice in writing, or such earlier period as shall be agreed to in
writing, mailed to the Company and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent (with or without cause) upon 30 days' notice in writing, or such
earlier period as shall be agreed to 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 Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. Notwithstanding the foregoing provisions of this
Section 21, in no event shall the resignation or removal of a Rights Agent be
effective until a successor Rights Agent shall have been appointed and have
accepted such appointment. If the Company shall fail to make such appointment
within a period of 30 days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by
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the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the incumbent Rights Agent or
the holder of record of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the United States
or any State thereof, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an Affiliate controlled by a corporation described in clause
(a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price per share and the number or kind or class of
shares of stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Rights Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company shall, with respect to shares of Common Stock so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, in each case existing prior to the
Distribution Date, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale; provided, however, that (i)
no such Right Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued, if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
23. Redemption.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (i) the 10th day following the first occurrence
of a Flip-In Event; or (ii) the Close of Business on the Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price of
$0.01 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (or at such later time as the
Board of Directors may establish for the
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effectiveness of such redemption), and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within (10) days after such action of
the Board of Directors ordering the redemption of the Rights (or such later time
as the Board of Directors may establish for the effectiveness of such
redemption), the Company shall mail a notice of redemption to all the holders of
the then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption shall state the
method by which the payment of the Redemption Price will be made. The failure to
give notice required by this Section 23(b) or any defect therein shall not
affect the legality or validity of the action taken by the Company.
(c) Notwithstanding any other provision of this Rights Agreement,
the Rights shall automatically be redeemed without any further action by the
Board of Directors or any other person as follows:
(i) In the event the Company receives an Offer from any
Offeror, the Board of Directors of the Company shall call a special meeting of
stockholders (the "Special Meeting") for the purpose of voting on a resolution
requesting the Board of Directors to redeem the Rights (the "Resolution"). The
Special Meeting shall be noticed at least 25 days in advance and held on a date
selected by the Board of Directors, which date shall not be more than 140 days
after the date such Offer is received by the Company. The Board of Directors
shall set a date for determining the stockholders of record entitled to notice
of and to vote at the Special Meeting in accordance with the Company's Articles
of Incorporation and Bylaws and with applicable law. At the Offeror's request,
the Company shall include in any proxy soliciting material prepared by it in
connection with the Special Meeting proxy soliciting material submitted by the
Offeror; provided, however, that the Offeror shall by written agreement with the
Company contained in or delivered with such request have indemnified the Company
against any and all liabilities resulting from any misstatements, misleading
statements and omissions contained in the Offeror's proxy soliciting material.
Notwithstanding the foregoing, no Special Meeting shall be held from and after
such time as any Person becomes an Acquiring Person, and any Special Meeting
scheduled prior to such time and not theretofore held shall be canceled.
(ii) If at the Special Meeting the Resolution receives the
affirmative vote of (x) sixty percent (60%) of the shares of Common Stock
outstanding, exclusive of any shares of voting stock held by the Offeror and its
Affiliates, as of the record date of the Special Meeting, and (y) two-thirds
(2/3) of the Common Stock present and entitled to vote at the Special Meeting,
then all of the Rights shall be automatically redeemed without any further
action by the Company or any stockholder action at the Redemption Price,
effective immediately prior to the consummation of any tender offer (provided
that such tender offer or any other transaction resulting in the consummation of
an Offer is consummated prior to 60 days after the date of the Special Meeting)
pursuant to which any Person offers to purchase all of the shares of Common
Stock held by Persons other than such Offeror and its Affiliates at a price per
share in cash equal to or greater than the price contained in the Resolution
approved at the Special Meeting; provided, however, that the Rights shall not be
redeemed at any time from and after such time as any Person becomes an Acquiring
Person.
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(iii) Nothing contained in this subsection (c) shall be
deemed to be in derogation of the obligation of the Board of Directors of the
Company to exercise its fiduciary duty. Without limiting the foregoing, nothing
contained herein shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any Offer, or to recommend that
holders of shares of Common Stock reject any tender offer, or to take any other
action (including, without limitation, the commencement, prosecution, defense or
settlement of any litigation and the submission of additional or alternative
Offers or other proposals to the Special Meeting) with respect to any Offer or
any tender offer that the Board of Directors believes is necessary or
appropriate in the exercise of its fiduciary duty.
(iv) Nothing in this subsection (c) shall be construed as
limiting or prohibiting the Company or any Offeror from proposing or engaging,
at any time, in any acquisition, disposition or other transfer of any securities
of the Company, any merger or consolidation involving the Company, any sale or
other transfer of assets of the Company, any liquidation, dissolution or
winding-up of the Company, or any other business combination or other
transaction, or any other action by the Company or such Offeror; provided,
however, that the holders of Rights shall have the rights set forth in this
Rights Agreement with respect to any such acquisition, disposition, transfer,
merger, consolidation, sale, liquidation, dissolution, winding-up, business
combination, transaction or action.
(d) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, or upon effectiveness of the
redemption of the Rights pursuant to subsection (c) of this Section 23, evidence
of which shall have been filed with the Rights Agent and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the Board
of Directors ordering the redemption of the Rights, or promptly following the
redemption of the Rights pursuant to subsection (c) of this Section 23, the
Company shall give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such holders at
each holder's last address as it appears upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the Transfer
Agent for the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made.
24. Exchange of Rights for Common Stock.
(a) The Board of Directors of the Company may, at its option, at
any time after the occurrence of a Flip-In Event, exchange all or part of the
then outstanding and exercisable Rights (which (i) shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii) and (ii) shall
include, without limitation, any Rights issued after the Distribution Date in
accordance with Section 22) for shares of Common Stock at an exchange ratio of
one share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than an Exempt Person),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of shares of Common Stock aggregating 50% or more of the shares
of Common Stock then outstanding. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have not been
exchanged pursuant to this Section 24(a) shall
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thereafter be exercisable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 24(a).
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the shares of 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 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute, and, in the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall substitute to the extent of such insufficiency, for each
share of Common Stock that would otherwise be issuable upon exchange of a Right,
a number of shares of Preferred Stock or fractions thereof (or equivalent
preferred shares, as such term is defined in Section 11(b)) having an aggregate
current per share market price (determined pursuant to Section 11(d) hereof)
equal to the current per share market price of one share of Common Stock
(determined pursuant to Section 11(d) hereof) as of the date of the Flip-In
Event.
(d) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common Stock, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this paragraph (d),
the current market value of a whole share of Common Stock shall be the Current
Market Price of a share of Common Stock (as defined in Section 11(d) hereof for
the purposes of computations made other than pursuant to Section 11(a)(iii)) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
25. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in Section 11(a)(i) or
to pay any dividend to the holders of record of its
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Preferred Stock payable in stock of any class or to make any other distribution
to the holders of record of its Preferred Stock (other than a regular periodic
cash dividend), or (ii) to offer to the holders of record of its Preferred Stock
or options, warrants, or other rights to subscribe for or to purchase shares of
Preferred Stock (including any security convertible into or exchangeable for
Preferred Stock) or shares of stock of any other class or any other securities,
options, warrants, convertible or exchangeable securities or other rights, or
(iii) to effect any reclassification of its Preferred Stock or any
recapitalization or reorganization of the Company, or (iv) to effect any
consolidation or merger with or into, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of record of a Right Certificate, in accordance with Section 26
hereof, notice of such proposed action, which shall specify the record date for
the purposes of such transaction referred to in Section 11(a)(i), or such
dividend or distribution, or the date on which such reclassification,
recapitalization, reorganization, consolidation, merger, sale or transfer of
assets, liquidation, dissolution or winding up is to take place and the record
date for determining participation therein by the holders of record of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of record of the Preferred Stock for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of record of Preferred Stock, whichever
shall be the earlier.
(b) In case any of the transactions referred to in Section
11(a)(ii) or Section 13 of this Rights Agreement are proposed, then, in any such
case, the Company shall give to each holder of Rights, in accordance with
Section 26 hereof, notice of the proposal of such transaction at least 10 days
prior to consummating such transaction, which notice shall specify the proposed
event and the consequences of the event to holders of Rights under Section
11(a)(ii) or Section 13 hereof, as the case may be, and, upon consummating such
transaction, shall similarly give notice thereof to each holder of Rights.
(c) The failure to give notice required by this Section 25 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
26. Notices. Notices or demands authorized by this Rights Agreement to
be given or made by the Rights Agent or by the holder of record of any Right
Certificate or Right to or on behalf of the Company shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
American Residential Investment Trust, Inc.
000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxx Xxx, XX 00000
Attention: Xxxx Xxxxxxxxxxxx
Subject to the provisions of Section 20 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
record of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
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American Stock Transfer and Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: _____________
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right Certificate
or Right shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
27. Supplements and Amendments. Except as provided in the penultimate
sentence of this Section 27, for so long as the Rights are then redeemable, the
Company may in its sole and absolute discretion, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Rights
Agreement in any respect without the approval of any holders of the Rights. At
any time when the Rights are no longer redeemable, except as provided in the
penultimate sentence of this Section 27, the Company may, and the Rights Agent
shall, if the Company so directs, supplement or amend this Rights Agreement
without the approval of any holders of Right Certificates in order to (i) cure
any ambiguity, (ii) correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) shorten
or lengthen any time period hereunder, or (iv) change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable; provided that no such supplement or amendment shall adversely affect
the interests of the holders of Rights as such (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person), and no such amendment may
cause the Rights again to become redeemable or cause the Agreement again to
become amendable other than in accordance with this sentence. Notwithstanding
anything contained in this Rights Agreement to the contrary, no supplement or
amendment shall be made which changes the Redemption Price. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
28. Successors. All of the covenants and provisions of this Rights
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.
29. Benefits of this Rights Agreement. Nothing in this Rights Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Rights Agreement; but this Rights Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the
holders of record of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
30. Governing Law. This Rights Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Maryland and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts to be made solely
by residents of such state and performed entirely within such state.
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31. Counterparts. This Rights Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
32. Descriptive Headings. Descriptive headings of the several sections
of this Rights Agreement are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
33. Severability. If any term, provision, covenant or restriction of
this Rights Agreement is held by a court of competent jurisdiction or other
authority to be invalid, illegal or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement
to be duly executed, and their seals affixed and attested, all as of the date
and year first above written.
[SEAL]
ATTEST: AMERICAN RESIDENTIAL
INVESTMENT TRUST, INC.
By: _____________________________ By: _____________________________
Name: Name:
Title: Title:
[SEAL]
ATTEST:
AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By: _____________________________ By: _____________________________
Name: Name:
Title: Title:
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38
EXHIBIT A
AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
ARTICLES SUPPLEMENTARY
American Residential Investment Trust, Inc., a Maryland corporation
having its principal office in Baltimore City, Maryland (the "Corporation"),
hereby certifies to the Maryland State Department of Assessments and Taxation
that:
FIRST: Pursuant to the authority expressly vested in the Board of
Directors of the Corporation by the Charter of the Corporation, the Board of
Directors has duly reclassified 100,000 shares of the Common Stock, par value
$0.01 per share, of the Corporation (the "Common Stock") into 100,000 shares of
a class designated as Series A Preferred Stock, par value $0.01 per share, of
the Corporation (the "Series A Preferred Stock") and has provided for the
issuance of such shares.
SECOND: The reclassification increases the number of shares classified
as Series A Preferred Stock from no shares immediately prior to the
reclassification to 100,000 shares immediately after the reclassification. The
reclassification decreases the number of shares classified as Common Stock from
25,000,000 shares immediately prior to the reclassification to 24,900,000 shares
immediately after the reclassification.
THIRD: The terms of the Series A Preferred Stock as set by the Board of
Directors, including preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption, are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock" (the "Series A Preferred Stock"), $0.01
par value per share, and the number of shares constituting such series shall be
100,000.
Section 2. Dividends and Distributions.
(A) The dividend rate on the shares of Series A Preferred Stock
shall be for each quarterly dividend (hereinafter referred to as a "quarterly
dividend period"), which quarterly dividend periods shall commence on January 1,
April 1, July 1 and October 1 each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date") (or in the case of original issuance,
from the date of original issuance) and shall end on and include the day next
preceding the first date of the next quarterly dividend period, at a rate per
quarterly dividend period (rounded to the nearest cent) equal to the greater of
(a) $7.50 or (b) subject to the provisions for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in cash, based upon the fair market
value at the time the non-cash dividend or other distribution is declared as
determined in good faith by the Board of Directors) of all non-cash dividends or
other distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared (but not withdrawn) on the Common
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Stock, par value $0.01 per share, of the Corporation (the "Common Stock") during
the immediately preceding quarterly dividend period, or, with respect to the
first quarterly dividend period, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event this Company shall
at any time after February 26, 1999 (the "Rights Declaration Date") (i) declare
any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the amount to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 45 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the number of votes per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
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40
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or by law, the holders of shares of Series A Preferred Stock and
the holders of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, in the Certificate of
Incorporation and in the By-laws, holders of Series A Preferred Stock shall have
no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 5. Liquidation, Dissolution or Winding Up.
(A) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the Series A
Preferred Stock shall be entitled to receive the greater of (a) 3,000 per share,
plus accrued dividends to the date of distribution, whether or not earned or
declared, or (b) an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be distributed
per share to holders of Common Stock. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event pursuant to clause
(b) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 6. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the
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preceding sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
Section 8. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series A Preferred Stock. All payments made with respect to fractional shares
hereunder shall be rounded to the nearest whole cent.
Section 9. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
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42
dividend rates and other relative rights and preferences of the
respective series and classes shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 9, purchase or otherwise acquire such shares at such time and in
such manner.
Section 10. Ranking. The Series A Preferred Stock shall be junior to all
other Series of the Corporation's preferred stock as to the payment of dividends
and the distribution of assets, unless the terms of any series shall provide
otherwise.
Section 11. Amendment. The Charter of the Corporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of two-thirds or more
of the outstanding shares of Series A Preferred Stock voting together as a
single class.
IN WITNESS WHEREOF, American Residential Investment Trust, Inc. has
caused these presents to be signed in its name and on its behalf by its Chairman
and Chief Executive Officer and witnessed by its Secretary on February 16, 1999.
WITNESS: AMERICAN RESIDENTIAL INVESTMENT
TRUST, INC.
/s/ Xxxx Xxxxxxxxxxxx /s/ Xxxx X. Xxxxxxx
------------------------------ ------------------------------------
Xxxx Xxxxxxxxxxxx, Secretary Xxxx X. Xxxxxxx, Chairman
and Chief Executive Officer
THE UNDERSIGNED, Xxxx X. Xxxxxxx, the Chairman and Chief Executive
Officer of American Residential Investment Trust, Inc., who executed on behalf
of the Corporation the Articles Supplementary of which this certificate is made
apart, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles Supplementary to be the corporate act of said Corporation and
hereby certifies that the matters and facts set forth herein with respect to the
authorization and approval thereof are true in all material respects under the
penalties of perjury.
/s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx, Chairman
and Chief Executive Officer
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EXHIBIT B
[FORM OF RIGHT CERTIFICATE]
Certificate No. W- __________ Rights
NOT EXERCISABLE AFTER NOVEMBER 14, 2006, OR EARLIER IF REDEEMED OR
EXCHANGED. AT THE OPTION OF THE COMPANY, THE RIGHTS MAY BE REDEEMED AT
$.001 PER RIGHT OR EXCHANGED FOR PREFERRED STOCK ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. IN THE EVENT THAT THE RIGHTS REPRESENTED BY
THIS CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR
CERTAIN TRANSFEREE OF THE RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS, THIS
RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY SHALL BE NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.
RIGHT CERTIFICATE
This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights Plan
dated as of February 2, 1999 ("Rights Plan") between American Residential
Investment Trust, Inc., a Maryland corporation (the "Company"), and American
Stock Transfer and Trust Company (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Plan) and prior to 5:00 p.m. (New York time) on February 2, 2009 at the
principal office of the Rights Agent, or its successors as Rights Agent,
designated for such purposes, one one-hundredth of a fully paid and
nonassessable share of Series A Preferred Stock of the Company ("Preferred
Stock") at a purchase price of $30.00 per one one-hundredth of a share, as the
same may from time to time be adjusted in accordance with the Rights Plan
("Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to such
terms in the Rights Plan.
As provided in the Rights Plan, the Purchase Price and the number of
shares of Preferred Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events and, upon the
happening of certain events, securities other than shares of Preferred Stock, or
other property, may be acquired upon exercise of the Rights evidenced by this
Right Certificate, as provided by the Rights Plan.
Upon the occurrence of a Flip-In Event, if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such
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Acquiring Person, (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights Plan, a
transferee of a person who, after such transfer, became an Acquiring Person, or
any Affiliate or Associate of an Acquiring Person, such Rights shall be null and
void and will no longer be transferable and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such Flip-In
Events.
This Right Certificate is subject to all the terms, provisions and
conditions of the Rights Plan, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights Plan
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities of the Rights Agent, the Company and
the holders of record of the Right Certificates, which limitation of rights
include the temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Plan. Copies of the Rights Plan
are on file at the principal executive office of the Company and are available
upon written request to the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder of record to purchase a like aggregate
number of shares of Preferred Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Plan, at any time prior to the
earlier of (i) the occurrence of a Flip-In Event (as such term is defined in the
Rights Plan) or (ii) the Expiration Date (as such term is defined in the Rights
Plan), the Rights evidenced by this Certificate may be redeemed by the Company
at its option at a redemption price of $0.01 per Right. Subject to the
provisions of the Rights Plan, the Company may, at its option, at any time after
a Flip-In Event, exchange all or part of the Rights evidenced by this
Certificate for shares of the Company's Common Stock or for Preferred Stock (or
shares of a class or series of the Company's preferred stock having the same
rights, privileges and preferences as the Preferred Stock).
In the event (i) any person or group becomes an Acquiring Person or (ii)
any of the types of transactions, acquisitions or other events described above
as self-dealing transactions occur, and prior to the acquisition by such person
or group of 50% or more of the outstanding shares of Common Stock, the Board may
require all or any portion of the outstanding Rights (other than Rights owned by
such Acquiring Person which have become void) to be exchanged for Common Stock
on a pro rata basis, at an exchange ratio of one share of Common Stock or one
one-hundredth of a share of Preferred Stock (or of a share of a class or series
of the Company's Preferred Stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
No fractional shares of Preferred Stock shall be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the option of the Company, be evidenced by
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45
depositary receipts), and no fractional shares of Common Stock will be issued
upon the exchange of any Right or Rights evidenced hereby, and in lieu thereof,
as provided in the Rights Plan, fractions of shares of Preferred Stock or Common
Stock shall receive an amount in cash equal to the same fraction of the then
Current Market Price (as such term is defined in the Rights Plan) of a share of
Preferred Stock or Common Stock, as the case may be.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Common Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Plan or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote in 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 (other than certain actions specified in
the Rights Plan) or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised or exchanged as provided in the Rights Plan.
This Right 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 February __, 1999.
ATTEST: AMERICAN RESIDENTIAL INVESTMENT
TRUST, INC.
_________________________________ By: _________________________________
Secretary
Title: ______________________________
COUNTERSIGNED: AMERICAN STOCK TRANSFER AND
TRUST COMPANY
As Rights Agent
By: _________________________________
Authorized Officer
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46
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer any or all of the Rights
represented by this Right Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
________________________________________________________________________________
(Name, address and social security or other
identifying number of transferee)
___________________________________ (_______________) of the Rights represented
by this Right Certificate, together with all right, title and interest in and to
said Rights, and hereby irrevocably constitutes and appoints
_________________________ attorney to transfer said Rights on the books of the
within-named Company with full power of substitution.
Dated:________________________ __________________________________
(Signature)
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person (as such capitalized terms are defined in the Rights Plan);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated:________________________ __________________________________
(Signature)
Signature Guaranteed:
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Form of Reverse Side of Right Certificate
(continued)
NOTICE
The signatures to the foregoing Assignment and the foregoing
Certificate, if applicable, must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a participant in a
Securities Transfer Association ("STA") recognized signature program.
In the event that the foregoing Certificate is not duly executed, with
signature guaranteed, the Company may deem the Rights represented by this Right
Certificate to be Beneficially Owned by an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such capitalized terms are defined in the
Rights Plan), and not issue any Right Certificate or Right Certificates in
exchange for this Right Certificate.
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48
Form of Reverse of Right Certificate
(continued)
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise any or all of the Rights
represented by this Right Certificate)
To:
The undersigned hereby irrevocably elects to exercise __________________
(__________) of the Rights represented by this Right Certificate to purchase the
shares of the Common Stock of the Company, or other securities or property
issuable upon the exercise of said number of Rights pursuant to the Rights Plan.
The undersigned hereby requests that a certificate for any such
securities and any such property be issued in the name of and delivered to:
________________________________________________________________________________
________________________________________________________________________________
(Name, address and social security or other
identifying number of issuee)
The undersigned hereby further requests that if said number of Rights
shall not be all the Rights represented by this Right Certificate, a new Right
Certificate for the remaining balance of such Rights be issued in the name of
and delivered to:
________________________________________________________________________________
(Name, address and social security or other
identifying number of issuee)
Dated:________________________ __________________________________
(Signature)
Signature Guaranteed:
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Form of Reverse Side of Right Certificate
(continued)
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined pursuant to
the Rights Plan);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated:________________________ __________________________________
(Signature)
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and the foregoing
Certificate, if applicable, must correspond to the name as written upon the face
of the this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a member firm of
a registered national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
In the event that the foregoing Certificate is not executed, with
signature guaranteed, the Company may deem the Rights represented by this Right
Certificate to be Beneficially Owned by an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such capitalized terms are defined in the
Rights Plan), and not issue any Right Certificate or Right Certificates in
exchange for this Right Certificate.
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50
EXHIBIT C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED
TO, BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) OR AN ASSOCIATE OR
AFFILIATE (AS DEFINED IN THE RIGHTS AGREEMENT) THEREOF AND CERTAIN TRANSFEREES
THEREOF WILL BE NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
American Residential Investment Trust, Inc.
SUMMARY OF TERMS OF
RIGHTS PLAN
NATURE OF RIGHT: When exercisable, each Right (a "Right")
will initially entitle the holder to
purchase one one-hundredth of a share of
Series A Preferred Stock ("Preferred
Stock") of American Residential Investment
Trust, Inc. (the "Company").
MEANS OF DISTRIBUTION: The Rights will be distributed to holders
of the Company's outstanding Common Stock
as a dividend of one Right for each share
of Common Stock. The Rights will also be
attached to all future issuances of Common
Stock prior to the Distribution Date (as
defined below).
EXERCISABILITY: Rights become exercisable on the earlier
of: (i) the date of public announcement by
the Company or by any person or group (an
"Acquiring Person") that such person or
group has acquired beneficial ownership of
15% or more of the Company's outstanding
Common Stock, or (ii) following the
commencement, or announcement of an
intention to commence, by any person or
group of a tender or exchange offer which
would result in such person owning 15% or
more of the outstanding Common Stock of
the Company (the earlier of such dates
being referred to as the "Distribution
Date"), provided that an Acquiring Person
does not include an Exempt Person (as such
term is defined in the Rights Plan).
Rights will trade separately from the
Common Stock once the Rights become
exercisable.
EXERCISE PRICE: $30.00 per share, which is the amount that
in the judgment of the Board represents
the long-term value of the Common Stock
over the term of the Rights Plan (the
"Exercise Price").
TERM: The Rights will expire upon the earlier of
(i) ten years after the date of issuance,
or February 2, 2009 or (ii) redemption or
exchange by the Company as described
below.
REDEMPTION OF RIGHTS: Rights are redeemable at a price of $0.01
per Right, by the vote of the Board or by
a vote of the stockholders pursuant to a
special meeting at any time until 10 days
after the occurrence of a Flip-In Event
(defined below).
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SHAREHOLDER REFERENDUM PROVISION: If the Board rejects a potential offer,
and the potential acquiror meets certain
conditions, then such potential acquiror
will be permitted to call a special
stockholder meeting to present the
proposal for stockholder approval and to
have the Rights redeemed.
WINDOW PERIOD: The Board has 10 days after a Triggering
Event to redeem the Rights. This 10 day
period provides the Board additional time
and flexibility to respond to any take
over threat.
PREFERRED STOCK: The Preferred Stock purchasable upon
exercise of the Rights will be
nonredeemable and junior to any other
series of preferred stock the Company may
issue (unless otherwise provided in the
terms of such other series). Each share of
Preferred Stock will have a preferential
cumulative quarterly dividend in an amount
equal to the greater of (a) $75.00 or b)
100 times the dividend declared on each
share of Common Stock. In the event of
liquidation, the holders of Preferred
Stock will receive a preferred liquidation
payment equal to the greater of (a) $3,000
per share, plus accrued dividends to the
date of distribution whether or not earned
or declared, or (b) an amount per share
equal to 100 times the aggregate payment
to be distributed per share of Common
Stock. Each share of Preferred Stock will
have 100 votes, voting together with the
shares of Common Stock. In the event of
any merger, consolidation or other
transaction in which shares of Common
Stock are exchanged for or changed into
other securities, cash and/or other
property, each share of Preferred Stock
will be entitled to receive 100 times the
amount and type of consideration received
per share of Common Stock. The rights of
the Preferred Stock as to dividends,
liquidation and voting, and in the event
of mergers and consolidations, are
protected by customary anti-dilution
provisions. Fractional shares (in integral
multiples of one one-hundredth) of
Preferred Stock will be issuable; however,
the Company may elect to distribute
depository receipts in lieu of such
fractional shares. In lieu of fractional
shares other than fractions that are
multiples of one one-hundredth of a share,
an adjustment in cash will be made based
on the market price of the Preferred Stock
on the last trading date prior to the date
of exercise. Because of the nature of the
Preferred Stock's dividend, liquidation
and voting rights, the value of one
one-hundredth of a share of Preferred
Stock purchasable upon exercise of each
Right should approximate the value of one
share of Common Stock.
RIGHTS IN EVENT OF SELF-DEALING In the event that the Company engages in
TRANSACTION OR ACQUISITION OF certain self dealing transactions with an
SUBSTANTIAL AMOUNT OF COMMON STOCK: Acquiring Person ("Flip-In Events"), a
holder of a Right thereafter has the right
to purchase, upon payment of the then
current Exercise Price, in lieu of one
one-hundredth of a share of Preferred
Stock, such number of shares of Common
Stock having a market value at the time of
the transaction equal to the Exercise
Price divided by one-half the Current
Market Price (as defined in the Rights
Plan) of the Common Stock. Notwithstanding
the foregoing, Rights held by the
Acquiring Person or any Associate or
Affiliate thereof or certain transferees
will be null and void and no longer be
transferable.
Self-dealing transactions are defined to
include a consolidation, merger or other
combination of an Acquiring Person with
the Company in which the Company is the
surviving corporation, the transfer of
assets to the
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52
Company in exchange for securities of the
Company, the acquisition of securities of
the Company (other than in a pro rata
distribution to all stockholders), the
sale, purchase, transfer, distribution,
lease, mortgage, pledge or acquisition of
assets by the Acquiring Person to, from or
with the Company on other than an arm's
length basis, compensation to an Acquiring
Person for services (other than for
employment as a regular or part-time
employee or director on a basis consistent
with the Company's past practice), a loan
or provision of other financial assistance
(except proportionately as a stockholder)
to an Acquiring Person or the licensing,
sale or other transfer of proprietary
technology or know-how from the Company to
the Acquiring Person on terms not approved
by the Board or a reclassification,
recapitalization or other transaction with
the effect of increasing by more than 1%
the Acquiring Person's proportionate share
of any class of securities of the Company.
RIGHTS IN EVENT OF BUSINESS If, following the occurrence of a Flip-In
COMBINATION: Event, the Company is acquired by any
person in a merger or other business
combination transaction in which the
Common Stock is exchanged or converted or
in which the Company is not the surviving
corporation, or 50% or more of its assets
or earnings power are sold to any person,
each holder of a Right (other than an
Acquiring Person, or Affiliates or
Associates thereof) shall thereafter have
the right to purchase, upon payment of the
then current Exercise Price, such number
of shares of common stock of the acquiring
company having a current market value
equal to the Exercise Price divided by
one-half the Current Market Price of such
common stock.
EXCHANGE OPTION: In the event (i) any person or group
becomes an Acquiring Person or (ii) any of
the types of transactions, acquisitions or
other events described above as
self-dealing transactions occur, and prior
to the acquisition by such person or group
of 50% or more of the outstanding shares
of Common Stock, the Board may require all
or any portion of the outstanding Rights
(other than Rights owned by such Acquiring
Person which have become void) to be
exchanged for Common Stock on a pro rata
basis, at an exchange ratio of one share
of Common Stock or one one-hundredth of a
share of Preferred Stock (or of a share of
a class or series of the Company's
Preferred Stock having equivalent rights,
preferences and privileges), per Right
(subject to adjustment).
FRACTIONAL SHARES: No fractional shares of Common Stock will
be issued upon exercise of the Rights and,
in lieu thereof, a payment in cash will be
made to the holder of such Rights equal to
the same fraction of the current market
value of a share of Common Stock.
ADJUSTMENT: The Exercise Price payable, and the number
of shares of Preferred Stock or other
securities or property issuable, upon
exercise of the Rights are subject to
adjustment from time to time to prevent
dilution (i) in the event of a stock
dividend on, or a subdivision, combination
or reclassification of the Preferred
Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or
warrants to subscribe for Preferred Stock
or convertible securities at less than the
current market price of the Preferred
Stock or (iii) upon the distribution to
holders of the Preferred Stock of
evidences of indebtedness or assets
(excluding dividends payable in Preferred
Stock) or of subscription rights or
warrants (other than those referred to
above). The number of Rights associated
with each share of
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53
Common Stock is also subject to adjustment
in the event of a stock split of the
Common Stock or a stock dividend on the
Common Stock payable in Common Stock or
subdivisions, consolidations or
combinations of the Common Stock
occurring, in any such case, prior to the
Distribution Date.
RIGHTS AS STOCKHOLDER: The Rights themselves do not entitle the
holder thereof to any rights as a
stockholder, including, without
limitation, voting rights or to receive
dividends.
AMENDMENT OF RIGHTS: Until the Rights become nonredeemable, the
Company may, except with respect to the
redemption price, amend the Rights Plan in
any manner. After the Rights become
nonredeemable, the Company may amend the
Rights Plan to cure any ambiguity, to
correct or supplement any provision which
may be defective or inconsistent with any
other provisions, to shorten or lengthen
any time period under the Rights Plan, or
to change or supplement any provision in
any manner the Company may deem necessary
or desirable, provided that no such
amendment may adversely affect the
interests of the holders of the Rights
(other than the Acquiring Person or its
Affiliates or Associates) or cause the
Rights to again be redeemable or the
Rights Plan to again be freely amendable.
A COPY OF THE RIGHTS PLAN IS AVAILABLE, FREE OF CHARGE, FROM THE
COMPANY, AMERICAN RESIDENTIAL INVESTMENT TRUST, INC., 000 XXXXXX XXXX
XXXXXX, XXXXX 000 XXX XXX, XXXXXXXXXX 2014, ATTENTION: SECRETARY. THIS
SUMMARY DESCRIPTION OF THE RIGHTS PLAN DOES NOT PURPORT TO BE COMPLETE
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS PLAN, AS
AMENDED FROM TIME TO TIME, WHICH IS INCORPORATED IN THIS SUMMARY
DESCRIPTION BY REFERENCE.
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