LINCOLN NATIONAL CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
AMENDED AND RESTATED
RIGHTS AGREEMENT
Dated as of November 14, 1996
TABLE OF CONTENTS
Page
Section 1. Certain definitions . . . . . . . . . . . . . . .2
Section 2. Appointment of Rights Agent . . . . . . . . . . .7
Section 3. Issue of Right Certificates . . . . . . . . . . .7
Section 4. Form of Right Certificates. . . . . . . . . . . .9
Section 5. Countersignature and Registration . . . . . . . 10
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates . . . . . . . 11
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . . . . 12
Section 8. Cancellation and Destruction of Right
Certificates. . . . . . . . . . . . . . . . . . 14
Section 9. Availability of Common Shares . . . . . . . . . 14
Section 10. Common Shares Ownership Date. . . . . . . . . . 16
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. . . . . . . . . . . 17
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. . . . . . . . . . . . . . . . 29
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . . 29
Section 14. Fractional Rights and Fractional Shares . . . . 34
Section 15. Rights of Action. . . . . . . . . . . . . . . . 35
Section 16. Agreement of Right Holders. . . . . . . . . . . 36
Section 17. Right Certificate Holder Not Deemed a
Shareholder . . . . . . . . . . . . . . . . . . 37
Section 18. Concerning the Rights Agent . . . . . . . . . . 00
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Xxxxxxx 00. Merger or Consolidation or Change of Name of
Rights Agent. . . . . . . . . . . . . . . . . . 38
Section 20. Duties of Rights Agent. . . . . . . . . . . . . 40
Section 21. Change of Rights Agent. . . . . . . . . . . . . 43
Section 22. Issuance of New Right Certificates. . . . . . . 45
Section 23. Redemption. . . . . . . . . . . . . . . . . . . 45
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . 47
Section 25. Notice of Certain Events. . . . . . . . . . . . 49
Section 26. Notices . . . . . . . . . . . . . . . . . . . . 50
Section 27. Supplements and Amendments. . . . . . . . . . . 52
Section 28. Successors. . . . . . . . . . . . . . . . . . . 53
Section 29. Benefits of this Agreement. . . . . . . . . . . 53
Section 30. Severability. . . . . . . . . . . . . . . . . . 53
Section 31. Governing Law . . . . . . . . . . . . . . . . . 54
Section 32. Counterparts. . . . . . . . . . . . . . . . . . 54
Section 33. Descriptive Headings. . . . . . . . . . . . . . 54
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RIGHTS AGREEMENT
This Agreement, dated as of November 14, 1996, between
Lincoln National Corporation, an Indiana corporation (the
"Corporation"), and The First National Bank of Boston (the
"Rights Agent") amends and totally restates the agreement entered
into between the Corporation and the Rights Agent as of November
7, 1986.
WHEREAS, The Board of Directors of the Corporation
authorized and declared a dividend of one common share purchase
right (a "Right") for each Common Share (as hereinafter defined)
of the Corporation outstanding on November 21, 1986, each Right
representing the right to purchase one share of Common Stock, no
par value, of the Corporation upon the terms and subject to the
conditions therein set forth, and further authorized the issuance
of one Right with respect to each Common Share that was issued
between November 21, and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms
are hereinafter defined).
WHEREAS, The Board of Directors of the Corporation retained
the right to amend and restate the agreement entered into as of
November 7, 1986, to extend its Final Expiration Date, and, so
long as there was no Acquiring Person (as hereinafter defined) to
extend the period during which the Rights could be redeemed.
WHEREAS, The agreement entered into as of November 7, 1986,
unless amended and restated, will expire with shareholders of
the Corporation having neither the right of redemption nor the
ability to exercise the rights. The Board of Directors of the
Corporation, therefore, desires to extend the Final Expiration
Date and to make certain other amendments to, and totally
restate, the agreement entered into as of November 7, 1986.
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Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than
any Exempt Person), who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such
Person, is the Beneficial Owner (as such term is hereinafter
defined) of 15% or more of the Common Shares then outstanding;
provided, however, that the term "Acquiring Person" shall not
include a Person (i) who is the Beneficial Owner of 15% or more
of the Common Shares then outstanding solely as a result of a
reduction in the number of Common Shares outstanding, unless
subsequent to such reduction such Person or any Affiliate or
Associate of such Person shall become the Beneficial Owner of any
additional Common Shares other than as a result of a stock
dividend, stock split or similar transaction effected by the
Corporation in which all shareholders are treated equally or (ii)
who is the Beneficial Owner of 15% or more of the Common Shares
then outstanding but who acquired Beneficial Ownership of Common
Shares without any plan or intention to seek control of the
Corporation, if such Person promptly enters into a firm
commitment to divest, and thereafter promptly divests (without
exercising or retaining any power, including voting, with respect
to such Shares), sufficient Common Shares (or securities
convertible into or exercisable for Common Shares) so that such
Person ceases to be the Beneficial Owner of 15% or more of the
then outstanding Common Shares.
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(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as in effect on the date of this
Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly,
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
group members with respect to a bona fide public
offering of securities), or upon the exercise of
conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or
exchange; or (B) the right to vote or dispose of
pursuant to any agreement, arrangement or
understanding; or
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(iii) which are beneficially owned, directly
or indirectly, by any other Person with which such
Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters
and selling group members with respect to a bona fide
public offering of securities) for the purpose of
acquiring, holding, voting or disposing of any
securities of the Corporation; provided, however, that
a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, any security if such beneficial
ownership arises solely as a result of such Person's
status as a "clearing agency," as defined in Section
3(a)(23) of the Exchange Act.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then
outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Corporation,
shall mean the number of such securities then issued
and outstanding together with the number of such
securities not then actually issued and outstanding
which such Person would be deemed to own beneficially
hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in the
State of Indiana are authorized or obligated by law or executive
order to close.
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(e) "Close of Business" on any given date shall mean 5:00
P.M., eastern standard time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M.,
eastern standard time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the
Corporation shall mean the shares of common stock, without par
value, of the Corporation; provided, however, that if the
Corporation is the continuing or surviving corporation in a
transaction described in Section 11(a)(ii) or Section 13 hereof,
"Common Shares" when used with reference to the "Corporation"
shall mean the capital stock or equity security with the greatest
aggregate voting power of the Corporation. "Common Shares" when
used with reference to any Person other than the Corporation
(including an Issuer as defined in Section 13 hereof) shall mean
the capital stock or equity security with the greatest voting
power of such other Person.
(g) "Distribution Date" shall mean the earlier of (i) the
Close of Business on the tenth calendar day after a Share
Acquisition Date or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action
of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement
by any Person (other than any Exempt Person) or of the first
public announcement of the intention of any Person (other than
any Exempt Person) to commence a tender or exchange offer, the
consummation of which would result in any Person becoming the
Beneficial Owner of Common Shares aggregating 15% or more of the
then outstanding Common Shares (including any such date which is
after the date of this Agreement and prior to the issuance of the
Rights).
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(h) "Exempt Person" shall mean (i) the Corporation or any
Subsidiary of the Corporation, (ii) any employee benefit or stock
ownership plan of the Corporation or any entity holding Common
Shares for or pursuant to the terms of any such plan, or (iii)
any Person who acquires Common Shares from any other Exempt
Person in one or a series of related transactions, each of which
is approved by the Board of Directors; provided, however, that if
any Person who becomes a Exempt Person solely by virtue of
subsection (iii) above, or any Affiliate or Associate of such
Person, subsequently becomes the Beneficial Owner of any
additional Common Shares in a transaction or transactions not
approved by the Board of Directors, such Person shall no longer
be deemed a "Exempt Person" with respect to all Common Shares of
which it, or any of its Affiliates or Associates, is the
Beneficial Owner."
(i) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, limited liability
partnership or other entity, and shall include any successor (by
merger or otherwise) of any such entity.
(j) "Share Acquisition Date" shall mean the first date of
public announcement by the Corporation or an Acquiring Person
that an Acquiring Person has become such.
(k) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or
indirectly, by such Person.
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Section 2. Appointment of Rights Agent. The Corporation
hereby appoints the Rights Agent to act as agent for the
Corporation and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates.
(a) Until the Distribution Date, (i) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by
the certificates for Common Shares registered in the names of the
holders thereof (which certificates shall also be deemed to be
Right Certificates, as hereinafter defined) and not by separate
Right Certificates, and (ii) the right to receive Right
Certificates will be transferable only in connection with the
transfer of Common Shares. As soon as practicable after the
Distribution Date, the Corporation will prepare and execute, the
Rights Agent will countersign, and the Corporation will send or
cause to be sent (and the Rights Agent will, if requested, send)
by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the
Corporation, a Right Certificate, in substantially the form of
Exhibit A hereto (a "Right Certificate"), evidencing one Right
for each Common Share so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
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(b) As of the date of this Agreement, or as soon as
reasonably practicable thereafter, the Corporation will send a
copy of a Summary of Rights to Purchase Common Shares, in
substantially the form of Exhibit B hereto (the "Summary of
Rights"), in accordance with Section 26 hereof to each record
holder of Common Shares as of the Close of Business on the next
dividend record date. With respect to certificates for Common
Shares outstanding as of the date of this Agreement, until the
Distribution Date the Rights will be evidenced by such
certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights. Until the
Distribution Date (or the earlier of the Redemption Date or the
Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding as of the date of this
Agreement, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred
to in the last sentence of this paragraph (c)) after the date of
this Agreement but prior to the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles
the holder hereof to certain rights as set
forth in a Rights Agreement between Lincoln
National Corporation and First National Bank
of Boston, dated as of November 14, 1996 (the
"Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a
copy of which is on file at the principal
executive offices of Lincoln National
Corporation. Under certain circumstances, as
set forth in the Rights Agreement, such
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Rights will be evidenced by separate
certificates and will no longer be evidenced
by this certificate. Lincoln National
Corporation will mail to the holder of this
certificate a copy of the Rights Agreement
without charge after receipt of a written
request therefor. As described in the Rights
Agreement, Rights issued to any Person who
becomes an Acquiring Person (as defined in
the Rights Agreement) shall become null and
void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for
transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Corporation purchases
or acquires any Common Shares after the date of this Agreement
but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed canceled and retired so that
the Corporation shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Common Shares
and of assignment to be printed on the reverse thereof) may have
such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Corporation may
deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform
to usage. Subject to the provisions of Section 22 hereof, the
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Right Certificates shall entitle the holders thereof to purchase
such number of Common Shares as shall be set forth therein at the
price per Common Share set forth therein (the "Purchase Price"),
but the number of such Common Shares and the Purchase Price shall
be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Corporation by
its Chairman of the Board, its President, any of its Vice
Presidents, or its Treasurer, either manually or by facsimile
signature, shall have affixed thereto the Corporation's seal or a
facsimile thereof, and shall be attested by the Secretary or any
Assistant Secretary of the Corporation, either manually or by
facsimile signature. The Right Certificates shall be manually or
by facsimile countersigned by the Rights Agent and shall not be
valid for any purpose unless countersigned. In case any officer
of the Corporation who shall have signed any of the Right
Certificates shall cease to be such officer of the Corporation
before countersignature by the Rights Agent and issuance and
delivery by the Corporation, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued
and delivered by the Corporation with the same force and effect
as though the person who signed such Right Certificates had not
ceased to be such officer of the Corporation; and any Right
Certificate may be signed on behalf of the Corporation by any
person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Corporation to sign
such Right Certificate, although at the date of the execution of
this Agreement any such person was not such an officer.
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Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office, books for
registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates
and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. Subject to the provisions of Section 14 hereof, at
any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the earlier of the
Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section
24 hereof) may be transferred, split up, combined or exchanged
for another Right Certificate or Right Certificates, entitling
the registered holder to purchase a like number of Common Shares
as the Right Certificate or Right Certificates surrendered then
entitled each holder to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent
designated for such purpose. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so
requested. The Corporation may require payment of a sum
sufficient to cover any tax or governmental charge that may be
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imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
Upon receipt by the Corporation and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Corporation's request,
reimbursement to the Corporation and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Corporation will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with
the form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the
Purchase Price for each Common Share as to which the Rights are
exercised, at or prior to the earliest of (i) the Close of
Business on November 14, 2006 (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date"), or (iii) the time at which
such Rights are exchanged as provided in Section 24 hereof.
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(b) The Purchase Price for each Common Share pursuant to
the exercise of a Right shall initially be $200, shall be subject
to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States
of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of the
Corporation, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Common Shares
certificates for the number of Common Shares to be purchased and
the Corporation hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) requisition from the
depositary agent depositary receipts representing such number of
Common Shares as are to be purchased (in which case certificates
for the Common Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and
the Corporation hereby directs the depositary agent to comply
with such request, (ii) when appropriate, requisition from the
Corporation the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or
names as may be designated by such holder, and (iv) when
appropriate, after receipt, deliver such cash to or upon the
order of the registered holder of such Right Certificate.
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(d) 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.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall,
if surrendered to the Corporation or to any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Corporation shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Right Certificate purchased or acquired by
the Corporation otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates to
the Corporation, or shall, at the written request of the
Corporation, provide the Corporation with a copy thereof and
destroy such cancelled Right Certificates, and deliver a
certificate of destruction thereof to the Corporation.
Section 9. Availability of Common Shares.
(a) If the Common Shares issuable and deliverable upon the
exercise of Rights are listed on any national securities
exchange, the Corporation shall use its reasonable best efforts
to cause, from and after such time as the Rights become
exercisable, all Common Shares reserved for issuance to be listed
on such exchange upon official notice of issuance upon such
exercise.
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(b) The Corporation shall use its reasonable best efforts
to (i) file, as soon as practicable following the later to occur
of an event described in Section 11(a)(ii) or Section 13 hereof
or the Distribution Date, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to
the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing and
(iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act)
until the earliest of (A) the date as of which the Rights are no
longer exercisable for such securities, (B) the Final Expiration
Date and (C) the Redemption Date. The Corporation will also take
such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights; provided,
however, that the Corporation may temporarily suspend the
exercisability of the Rights to prepare and file such
registration statement and permit it to become effective, and
upon any such suspension, the Corporation 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 such provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction
unless the requisite qualification in such jurisdiction shall
have been obtained.
(c) The Corporation covenants and agrees that it will take
all such action as may be necessary to ensure that all Common
Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Common Shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares.
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(d) The Corporation further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any Common
Shares upon the exercise of Rights. The Corporation shall not,
however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates or
depositary receipts for the Common Shares in a name other than
that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Common Shares
upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been
established to the Corporation's reasonable satisfaction that no
such tax is due.
Section 10. Common Shares Ownership Date. Each person in
whose name any certificate for Common Shares is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Common Shares represented
thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Shares
transfer books of the Corporation are closed, such person shall
be deemed to have become the record holder on such succeeding
Business Day on which the Common Shares transfer books of the
Corporation are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Common Shares for which the
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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 Corporation, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares
or Number of Rights. The Purchase Price, the number of Common
Shares covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this
Section 11.
(a)(i) In the event the Corporation shall at
any time after the date of this Agreement (A) declare a
dividend on the Common Shares payable in Common Shares,
(B) subdivide the outstanding Common Shares, (C)
combine the outstanding Common Shares into a smaller
number of Common Shares or (D) issue any shares of its
capital stock in a reclassification of the Common
Shares (including any such reclassification in
connection with a consolidation or merger in which the
Corporation 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
capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the
Common Shares transfer books of the Corporation were
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open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the
aggregate par value, if any, of the shares of capital
stock of the Corporation issuable upon exercise of one
Right.
(ii) Subject to Section 24 of this Agreement, in
the event that a Share Acquisition Date shall occur at
any time after the date of this Agreement, then each
holder of a Right shall thereafter have a right to
receive, upon exercise thereof in accordance with the
terms of this Agreement and in lieu of the number of
Common Shares for which the Right is then exercisable,
such number of Common Shares of the Corporation as
shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of Common
Shares for which a Right is then exercisable and
dividing that product by (y) 50% of the then current
per share market price of the Corporation's Common
Shares (determined pursuant to Section 11(d) hereof as
of the date such Person became an Acquiring Person).
In the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the
Corporation shall not take any action which would
eliminate or diminish the benefits intended to be
afforded by the Rights.
From and after the occurrence of the event described
above, any Rights that are or were acquired or beneficially
owned by such Acquiring Person (or any Associate or
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Affiliate of such Acquiring Person) shall be void and any
holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement.
No Right Certificate shall be issued pursuant to Section 3
that represents Rights beneficially owned by an Acquiring
Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof shall be
canceled.
(iii) In the event that there shall not be
sufficient Common Shares authorized and unissued to
permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii), the Corporation
shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon
exercise of the Rights. However, if the Corporation is
unable to cause the authorization of additional Common
Shares within 90 calendar days after the occurrence of
an event in Section 11(a)(ii), then, notwithstanding
anything in this Agreement to the contrary, the
Corporation shall determine the excess of the value, as
determined by the Board of Directors in good faith, of
the Common Shares issuable upon the exercise of a Right
over the Purchase Price (such excess being hereinafter
-20-
referred to as the "Spread") and shall be obligated to
deliver, upon the surrender of such Right and without
requiring payment of the Purchase Price, Common Shares
(to the extent available) and cash (to the extent
permitted by applicable law and any agreements or
instruments to which the Corporation is a party in
effect immediately prior to the first occurrence of an
event in Section 11(a)(ii)) in an amount equal to the
Spread. To the extent that any legal or contractual
restrictions prevent the Corporation from paying the
full amount of cash payable in accordance with the
foregoing sentence, the Corporation shall pay to
holders of the Rights as to which such payments are
payable all amounts which are not then restricted on a
pro rata basis and shall continue to make payments on a
pro rata basis as funds become available until the full
amount due to each such Right holder has been paid.
(b) In case the Corporation shall fix a record date for the
issuance of rights, options or warrants to all holders of Common
Shares entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Common
Shares (or shares having the same rights, privileges and
preferences as the Common Shares ("equivalent common shares")) or
securities convertible into Common Shares or equivalent common
shares at a price per Common Share or equivalent common share (or
having a conversion price per share, if a security convertible
into Common Shares or equivalent common shares) less than the
then current per share market price of the Common Shares (as
defined in Section 11(d)) 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
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such record date by a fraction, the numerator of which shall be
the number of Common Shares outstanding on such record date plus
the number of Common Shares which the aggregate offering price of
the total number of Common Shares and/or equivalent common shares
so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at
such current market price and the denominator of which shall be
the number of Common Shares outstanding on such record date plus
the number of additional Common Shares and/or equivalent common
shares to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the aggregate par value, if any, of the shares of capital
stock of the Corporation issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration part
or all of which shall be in a form other than cash, the value of
such consideration shall be as determined in good faith by the
Board of Directors of the Corporation, whose determination shall
be described in a statement filed with the Rights Agent. Common
Shares owned by or held for the account of the Corporation 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 rights,
options or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Corporation shall fix a record date for the
making of a distribution to all holders of the Common Shares
(including any such distribution made in connection with a
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consolidation or merger in which the Corporation is the
continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Shares) 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 then current per share market
price of the Common Shares on such record date less the fair
market value (as determined in good faith by the Board of
Directors of the Corporation, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to one Common Share and the denominator of which shall be such
current per share market price of the Common Shares; provided,
however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value,
if any, of the shares of capital stock of the Corporation to be
issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder,
the "current per share market price" of any Security (a
"Security" for the purpose of this Section 11(d)(i)
shall mean capital stock or equity security) on any
date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30
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consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided,
however, that in the event that the current per share
market price of the Security is determined during a
period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such
Security payable in shares of such Security or
securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such
Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination of reclassification, then, and in each such
case, the current per share market price shall be
appropriately adjusted to reflect the current market
price per share equivalent of such Security. The
closing price for each day shall be the last sale
price, regular way, or, 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
Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect
to securities listed on the principal national
securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed
or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated
-24-
Quotations System ("NASDAQ") or such other system then
in use, or, if on any such date the Security is not
quoted by any such organization, the average of the
closing bid and asked prices as furnished by a
professional market maker making a market in the
Security selected by the Board of Directors of the
Corporation. The term "Trading Day" shall mean a day
on which the principal national securities exchange on
which the Security is listed or admitted to trading is
open for the transaction of business or, if the
Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Common
Shares shall be determined in accordance with the
method set forth in Section 11(d)(i). If the Common
Shares are not publicly held or so listed or traded,
"current per share market price" shall mean the fair
value per share as determined in good faith by the
Board of Directors of the Corporation, whose
determination shall be described in a statement filed
with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of
at least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
-25-
nearest one ten-thousandth of a Common Share or one ten-thousandth
of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of
the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital
stock of the Corporation other than Common Shares, thereafter the
number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Shares contained in Section
11(a) through (c), inclusive, and the provisions of Sections 7,
9, 10 and 13 with respect to the Common Shares shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Corporation
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of Common Shares purchasable from time to time
hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Corporation 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
-26-
Common Shares (calculated to the nearest one ten-thousandth of a
Common Share) obtained by (i) multiplying (x) the number of
Common Shares 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 Corporation may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights
in substitution for any adjustment in the number of Common Shares
purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall
be exercisable for the number of Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Corporation shall make a public announcement
of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Corporation 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
-27-
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 Corporation, 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
Corporation, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of Common Shares issuable upon the
exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and
the number of Common Shares which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of
the Common Shares issuable upon exercise of the Rights, the
Corporation shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and
nonassessable Common Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Corporation may elect to
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defer until the occurrence of such event issuing to the holder of
any Right exercised after such record date the Common Shares and
other capital stock or securities of the Corporation, if any,
issuable upon such exercise over and above the Common Shares and
other capital stock or securities of the Corporation, if any,
issuable on the basis of the Purchase Price in effect prior to
such adjustment; provided, however, that the Corporation shall
deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Corporation shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the
Common Shares, issuance wholly for cash or any Common Shares at
less than the current market price, issuance wholly for cash or
Common Shares or securities which by their terms are convertible
into or exchangeable for Common Shares, dividends on Common
Shares payable in Common Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made
by the Corporation to holders of its Common Shares shall not be
taxable to such shareholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Corporation
shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in
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Common Shares) into a greater or lessor number of Common Shares,
then in any such case (y) the number of Common Shares purchasable
after such event upon proper exercise of each Right shall be
determined by multiplying the number of Common Shares so
purchasable immediately prior to such event by a fraction, the
numerator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event,
and (z) each Common Share outstanding immediately after such
event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such
event had issued with respect to it. The adjustments provided
for in this Section 11(n) shall be made successively whenever
such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Sections 11 and 13 hereof, the Corporation shall promptly (a)
prepare a certificate setting forth such adjustment, and a brief
statement of the facts accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the Common
Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with
Section 25 hereof. The Rights Agent shall be fully protected in
relying on such certificate and shall not be deemed to have
knowledge of any adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. In the event, directly or indirectly,
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(a) the Corporation shall consolidate with, or merge with
and into, any other Person and shall not be the continuing or
surviving corporation of such merger or consolidation;
(b) any Person shall consolidate with the Corporation, or
merge with and into the Corporation and the Corporation shall be
the continuing or surviving corporation of such merger or
consolidation and, in connection with such merger or
consolidation, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other
Person (or the Corporation) or cash or any other property; or
(c) the Corporation shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power
(including without limitation securities creating any obligation
on the part of the Corporation and/or any of its Subsidiaries)
aggregating 50% or more of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to any Person
other than the Corporation or one or more of its wholly-owned
Subsidiaries,
then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the
exercise thereof in accordance with the terms of this Agreement
and in lieu of Common Shares of the Corporation, such number of
validly authorized and issued, fully paid, nonassessable and
freely tradeable Common Shares of such Person (including the
Corporation as successor thereto or as the surviving
corporation), free and clear of any liens, encumbrances and other
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adverse claims and not subject to any rights of call or first
refusal, as shall be equal to the result obtained by (A)
multiplying the then current Purchase Price by the number of
Common Shares for which a Right is then exercisable (without
taking into account any adjustment previously made pursuant to
Section 11(a)(ii) hereof) and dividing that product by (B) 50% of
the then current per share market price of the Common Shares of
such other Person (determined pursuant to Section 11(d) hereof)
on the date of consummation of such consolidation, merger, sale
or transfer; (ii) the Issuer of such Common Shares shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and
duties of the Corporation pursuant to this Agreement; (iii) the
term "Corporation" shall thereafter be deemed to refer to such
Issuer; and (iv) such Issuer shall take such steps (including,
but not limited to, the reservation of a sufficient number of its
Common Shares) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the
Rights. For purposes of this Section 13, "Issuer" shall mean (x)
in the case of any event described in Sections 13(a) or (b)
above, the Person that is the continuing, surviving, resulting or
acquiring Person (including the Corporation as the continuing or
surviving corporation of a transaction described in Section 13(b)
above), and (y) in the case of any event described in Section
13(c) above, the Person that is the party receiving the greatest
portion of the assets or earning power (including without
limitation securities creating any obligation on the part of the
Corporation and/or any of its Subsidiaries) transferred pursuant
to such transaction or transactions; provided, however, that, in
any such case, (A) if (1) no class of equity security of such
Person is, at the time of such merger, consolidation or
transaction and has been continuously over the preceding 12-month
-32-
period, registered pursuant to Section 12 of the Exchange Act and
(2) such Person is a Subsidiary, directly or indirectly, of
another Person, a class of equity security of which is and has
been so registered, the term "Issuer" shall mean such other
Person; and (B), in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, a class of equity security
of two or more of which are and have been so registered, the term
"Issuer" shall mean whichever of such Persons is the issuer of
the equity security having the greatest aggregate market value.
Notwithstanding the foregoing, if the Issuer in any of the events
listed above is not a corporation or other legal entity having
outstanding equity securities, then, and in each such case, (i)
if the Issuer is directly or indirectly wholly owned by a
corporation or other legal entity having outstanding equity
securities, then all references to Common Shares of the Issuer
shall be deemed to be references to the Common Shares of the
corporation or other legal entity having outstanding equity
securities which ultimately controls the Issuer, and (ii) if
there is no such corporation or other legal entity having
outstanding equity securities, (Y) proper provision shall be made
so that the Issuer shall create or otherwise make available for
purposes of the exercise of the Rights in accordance with the
terms of this Agreement, a type or types of security or
securities having a fair market value at least equal to the
economic value of the Common Shares which each holder of a Right
would have been entitled to receive if the Issuer had been a
corporation or other legal entity having outstanding equity
securities; and (Z) all other provisions of this Agreement shall
apply to the Issuer of such securities as if such securities were
Common Shares. The Corporation shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Issuer shall have a sufficient number of authorized Common Shares
(or other securities as contemplated above) which have not been
issued or reserved for issuance to permit the exercise in full of
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the Rights in accordance with this Section 13 and unless prior to
such consummation the Corporation and such Issuer shall have
executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in this Section 13
and further providing that as soon as practicable after the
consummation of any such consolidation, merger, sale or transfer,
the Issuer will
(i) prepare and file a registration statement
under the Securities Act, with respect to the Rights
and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A)
become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at
all times meeting the requirements of the Act) until
the earlier of the Expiration Date or the Redemption
Date; and
(ii) deliver to holders of the Rights historical
financial statements for the Issuer and each of its
Affiliates which comply in all respects with the
requirements for registration on Form 10 under the
Exchange Act.
The Corporation shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result
of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by
the Rights. The provisions of this Section 13 shall similarly
-34-
apply to successive mergers or consolidations or sales or other
transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
-35-
by the Board of Directors of the Corporation. If on any such
date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Corporation shall be used.
(b) The Corporation shall not be required to issue
fractions of Common Shares upon exercise of the Rights or to
distribute certificates which evidence fractional Common Shares.
In lieu of fractional Common Shares, the Corporation shall pay to
the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one Common
Share. For the purposes of this Section 14(b), the current
market value of a Common Share shall be the closing price of a
Common Share (as determined pursuant to Section 11(d) hereof) for
the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right (except as
provided above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given
to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder
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of any other Right Certificate (or, prior to the Distribution
Date, of the Common Shares), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Corporation to enforce, or
otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject
to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the
Corporation and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares:
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer; and
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(c) the Corporation and the Rights Agent may deem and treat
the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Corporation or the
Rights Agent) for all purposes whatsoever, and neither the
Corporation nor the Rights Agent shall be affected by any notice
to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the Common Shares, or any other securities
of the Corporation which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of
the rights of a shareholder of the Corporation or any right to
vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in
Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with
the provisions hereof.
Section 18. Concerning the Rights Agent. The Corporation
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on
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demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of
its duties hereunder. The Corporation also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense incurred, in the absence of negligence, bad
faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of
liability in the premises.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate
for the Common Shares or for other securities of the Corporation,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20
hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
-39-
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement any
of the Right Certificates shall have been countersigned but not
delivered, 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 Agreement.
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 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 Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
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Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Corporation and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel, and
the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the
Corporation prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the
Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Corporation and delivered to
the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Corporation and any other Person only for its own negligence, bad
faith or willful misconduct.
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(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Corporation of any covenant
or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the
terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice that
such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as
to whether any Common Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
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instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the
President, any Vice President, the Secretary or the Treasurer of
the Corporation, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the Corporation
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 Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such
application (which date shall not be less than five Business Days
after the date any such officer of the Corporation actually
receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking
any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Corporation or become
-43-
pecuniarily interested in any transaction in which the
Corporation may be interested, or contract with or lend money to
the Corporation or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for
the Corporation or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Corporation resulting from any such
act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing
mailed to the Corporation and to each transfer agent of the
Common Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Corporation
may remove the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of
the Common Shares 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 Corporation shall appoint a successor to
the Rights Agent. If the Corporation shall fail to make such
appointment within a period of 30 days after giving notice of
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such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate who shall,
with such notice, submit his Right Certificate for inspection by
the Corporation, then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Corporation or by such a court,
shall be (i) a corporation organized and doing business under the
laws of the United States (or of any state of the United States
so long as such corporation is authorized to do business as a
banking institution), validly existing and in good standing, if
applicable, 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 $100 million or (ii) a
subsidiary of a corporation described in clause (i) 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 Corporation shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
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Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Corporation may, at its option, issue
new Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Corporation may, at its
option, at any time prior to the earlier of (i) the Final
Expiration Date and (ii) the tenth calendar day following the
Share Acquisition Date, or such later date as may be specified by
a majority of the Board of Directors prior to the time the right
to redeem would otherwise expire pursuant to this (ii) hereof,
redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The
redemption of the Rights by the Board of Directors may be made
effective at such time on such basis and with such conditions as
the Board of Directors in its sole discretion may establish.
(b) If, following the occurrence of a Share Acquisition
Date and following the expiration of the right of redemption
hereunder but prior to the occurrence of an event described in
Section 13 ("Triggering Event") each of the following shall have
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occurred and remain in effect: (i) a Person who is an Acquiring
Person shall have transferred or otherwise disposed of a number
of Common Shares in a transaction, or series of transactions,
which did not result in the occurrence of any Triggering Event
such that such Person is thereafter a Beneficial Owner of less
than 10% of the outstanding Common Shares, (ii) there are no
other Persons, immediately following the occurrence of the event
described in clause (i), who are Acquiring Persons, and (iii) the
transfer or other disposition described in clause (i) above was
other than pursuant to a transaction, or series of transactions,
which directly or indirectly involved the Corporation or any of
its Subsidiaries, then the right of redemption set forth in
Section 23(a) shall be reinstated and thereafter be subject to
the provisions of this Section; provided however, that such
Person shall for all purposes of this Agreement continue to be an
Acquiring Person.
(c) Immediately upon the action of the Board of Directors
of the Corporation ordering the redemption of the Rights pursuant
to paragraph (a) of this Section 23, 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 Corporation
may, at its option, pay the Redemption Price in cash, Common
Shares (based upon the current per share market price of the
Common Shares (determined pursuant to Section 11(d) hereof) at
the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors. The Corporation 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
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redemption of the Rights pursuant to paragraph (a), the
Corporation shall mail a notice of redemption to all the holders
of the then outstanding Rights in accordance with Section 26
hereof. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither
the Corporation nor any of its Subsidiaries, Affiliates or
Associates may redeem, acquire or purchase for value any Rights
at any time in any manner other than that specifically set forth
in this Section 23 or in Section 24 hereof, and other than in
connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Corporation may, at its
option, at any time after a Share Acquisition Date, exchange all
or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not
be empowered to effect such exchange at any time after any Person
(other than the Corporation, any Subsidiary of the Corporation,
any employee benefit plan of the Corporation or any such
Subsidiary, or any entity holding Common Shares for or pursuant
to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
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(b) Immediately upon the action of the Board of Directors
of the Corporation ordering the exchange of any Rights pursuant
to paragraph (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 Common Shares equal to
the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Corporation 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 Corporation promptly shall mail a
notice of any such exchange to all of the holders of such Rights
in accordance with Section 26 hereof. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Shares
for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any
partial exchange shall be 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
Corporation, at its option, may substitute equivalent common
shares, as such term is defined in Section 11(b) hereof, for
Common Shares exchangeable for Rights, as appropriately adjusted
to reflect adjustments in the voting rights of the Common Shares
pursuant to the terms thereof, so that the fraction of an
equivalent common share delivered in lieu of each Common Share
shall have the same voting rights as one Common Share.
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(d) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with
this Section 24, the Corporation shall take all such action as
may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights.
(e) In any exchange pursuant to this Section 24, the
Corporation shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional
Common Shares. In lieu of such fractional Common Shares, the
Corporation shall pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Common Share.
For the purposes of this paragraph (e), the current market value
of a whole Common Share shall be the closing price of a Common
Share (as determined pursuant to Section 11(d) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to
this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Corporation shall propose (i) to pay any
dividend payable in stock of any class to the holders of its
Common Shares or to make any other distribution to the holders of
its Common Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Common Shares rights or
warrants to subscribe for or to purchase any additional Common
Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its
Common Shares, (iv) to effect any consolidation or merger into or
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with, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more of the
assets or earning power of the Corporation and its Subsidiaries
(taken as a whole) to, any other Person, or (v) to effect the
liquidation, dissolution or winding up of the Corporation, then,
in each such case, the Corporation shall give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice
of such proposed action, which shall specify the record date for
the purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution,
or winding up is to take place and the date of participation
therein by the holders of the Common Shares, if any such date is
to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior
to the record date for determining holders of the Common Shares
for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of the Common Shares, whichever shall be the earlier.
(b) In case a Share Acquisition Date shall occur, then the
Corporation shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to
holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate to or on the Corporation shall be
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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:
Lincoln National Corporation
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxx 00000
Attention: General Counsel
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Corporation or by the holder of any Right Certificate to or on
the Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Corporation) as follows:
The First National Bank of Boston
c/o Boston EquiServe
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Shareholder Services Division
Notices or demands authorized by this Agreement to be given or
made by the Corporation or the Rights Agent to the holder of any
Right Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the
transfer agent for the Common Shares prior to issuance of Right
Certificates; otherwise, at the address of such holder as shown
on the registry books of the Rights Agent.
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Section 27. Supplements and Amendments. Prior to the
Distribution Date, if the Corporation so directs, the Corporation
and the Rights Agent shall supplement or amend any provision of
this Agreement in any manner which the Corporation may deem
desirable without the approval of any holders of Rights or
certificates representing Common Shares. From and after the
Distribution Date, the Corporation, upon approval by the Board of
Directors, and the Rights Agent may supplement or amend this
Agreement without the approval of any holders of Rights or
Certificates representing Common Shares in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions
hereunder in any manner which the Corporation, upon such
approval, may deem desirable, including without limitation the
addition of other events requiring adjustment to the Rights under
Sections 11 or 13 or procedures relating to the redemption of the
Rights, which change, amendment or supplement shall not adversely
affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of any such
Person); provided, however, that this Agreement may not be
supplemented or amended pursuant to this sentence to lengthen,
pursuant to clause (iii) of this sentence, any time period unless
such lengthening is specifically contemplated hereby or is for
the purpose of protecting, enhancing or clarifying the rights of,
or the benefits to, the holders of Rights. Upon the delivery of a
certificate from the President or any Vice President of the
Corporation which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the
Rights Agent shall execute such supplement or amendment;
provided, however, that the failure or refusal of the Rights
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Agent to execute such supplement or amendment shall not affect
the validity or effective date of any supplement or amendment
adopted by the Corporation. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment shall be
made which decreases the stated Redemption Price or the period of
time remaining until the Final Expiration Date.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Corporation or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person or corporation
other than the Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Corporation, the Rights Agent
and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
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Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Indiana and for all purposes
shall be governed by and construed in accordance with the laws of
such State applicable to contracts to be made and performed
entirely within such State.
Section 32. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and
year first above written.
LINCOLN NATIONAL CORPORATION
By:
Attest:
By:
____________________, [Title]
THE FIRST NATIONAL BANK OF BOSTON
By:
_________________
Attest:
By:
______________________
EXHIBIT A
Form of Right Certificate
Certificate No. Rights
NOT EXERCISABLE AFTER NOVEMBER 14, 2006 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
Lincoln National Corporation
This certifies that , or registered
assigns, is the registered owner of the number of rights set
forth above, each of which entitles the owner thereof, subject to
the terms, provisions and conditions of the Rights Agreement,
dated as of November 14, 1996 (the "Rights Agreement"), between
Lincoln National Corporation, an Indiana corporation (the
"Corporation"), and First National Bank of Boston (the "Rights
Agent"), to purchase from the Corporation at any time after the
Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., eastern standard time, on
November 14, 2006 at the office of the Rights Agent designated
for such purpose, or at the office of its successor as Rights
Agent, one fully paid nonassessable share of the Common Stock,
without par value, of the Corporation (the "Common Shares"), at a
purchase price of $200 per Common Share (the "Purchase Price"),
upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of
Common Shares which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of November 14, 1996, based on the
Common Shares as constituted at such date. As provided in the
Rights Agreement, the Purchase Price and the number of Common
Shares which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are incorporated herein by this
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations of the Corporation and of the
holders of the Right Certificates. Copies of the Rights
Agreement are on file at the principal executive offices of the
Corporation and the above-mentioned offices of the Rights Agent.
-2-
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 to purchase a like aggregate number of
Common Shares as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of
whole Rights not exercised. In no event will certificates for
fractional Rights be issued.
Subject to the provisions of the Rights Agreement and Board
action, the Rights evidenced by this Certificate (i) may be
redeemed in whole, but not in part, by the Corporation at a
redemption price of $.01 per Right or (ii) may be exchanged in
whole or in part for an equal number of Common Shares.
No fractional Common Shares will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of the Common Shares or of any other securities of the
Corporation which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such,
any of the rights of a shareholder of the Corporation or any
right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purchase until it shall have been countersigned by the Rights
Agent.
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WITNESS the facsimile signature of the proper officers of
the Corporation, and its corporate seal. Dated as of November 14, 1996.
ATTEST: Lincoln National Corporation
By:----------------------- Secretary
Countersigned:
The First National Bank of Boston
By:
Authorized Signature
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns
and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint , Attorney, to transfer the within Right
Certificate on the books of the within-named Corporation, with
full power of substitution.
Dated: ,
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced
by this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate hereof (as defined
in the Rights Agreement).
Signature
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Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Lincoln National Corporation:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to
purchase the Common Shares issuable upon the exercise of such
Rights and requests that certificates for such Common Shares be
issued in the name of:
Please insert social security
or other identifying number:
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number:
(Please print name and address)
Dated: ,
Signature
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Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
Form of Reverse Side of Right Certificate -- continued
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced
by this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as defined
in the Rights Agreement).
Signature
NOTICE
The signature in the foregoing Forms of Assignment and
Election must conform to the name as written upon the face of
this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form
of Assignment or the Form of Election to Purchase, as the case
may be, is not completed, the Corporation and the Rights Agent
will deem the beneficial owner of the Rights evidenced by this
Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On November 6, 1986, the Board of Directors of Lincoln
National Corporation (the "Corporation") declared a dividend of
one common share purchase right (a "Right" or "Rights") for each
outstanding share of the Corporation's common stock, without par
value (the "Common Shares"), of the Corporation and entered into
a rights agreement.Pursuant to the terms of that rights
agreement, the Board of Directors of the Corporation retained the
right to amend it and extend its expiration date in certain
circumstances. On November 14, 1996, the Board amended and
totally restated the rights agreement, and extended its
expiration date to November 14, 2006. This Summary of Rights
replaces the summary of rights that was sent to shareholders of
record following the initial rights dividend in 1986. If and
when the Rights become exercisable, each Right will entitle the
registered holder to purchase from the Corporation one Common
Share at a purchase price of $200 (the "Purchase Price"),
although the price may be adjusted as described below. The
description and terms of the Rights are set forth in an Amended
and Restated Rights Agreement (the "Rights Agreement") between
the Corporation and The First National Bank of Boston, as Rights
Agent (the "Rights Agent").
TRADING AND DISTRIBUTION OF RIGHTS
Shareholders did not receive a separate certificate for the
Rights. The Rights were represented by the outstanding Common
Share certificates with a copy of the summary of rights that was
mailed in 1986 attached thereto, and will now be represented by
the outstanding Common Share certificates with a copy of this
Summary of Rights attached thereto. The Rights cannot be bought,
sold or otherwise traded separately from the Common Shares.
Certificates for Common Shares issued after the date of the
Rights Agreement carry a notation that indicates that Rights are
attached to the Common Shares and that the terms of the Rights
Agreement are incorporated therein.
Separate certificates representing the Rights will be
distributed as soon as practicable after the "Distribution Date,"
which is the earliest to occur of:
(1) 10 calendar days following a public
announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding
Common Shares, or
(2) 10 business days (or such later date as may
be determined by action of the Board of Directors prior
to the time any person or group becomes an Acquiring
Person) following the commencement or announcement of
an intention to make a tender offer or exchange offer
the consummation of which would result in the
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beneficial ownership by a person or group of 15% or
more of such outstanding Common Shares.
Until the Distribution Date (or earlier exchange, redemption
or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the date of the
Rights Agreement, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the
Distribution Date and, thereafter, such separate Right
Certificates alone will evidence the Rights.
EXERCISABILITY AND EXPIRATION
The holders of the Rights are not required to take any
action until the Rights become exercisable. As described above,
the Rights are not exercisable until the Distribution Date.
Holders of the Rights will be notified that the Rights have
become exercisable when the Rights Agent mails the Rights
Certificates. The Rights will expire on November 14, 2006 (the
"Final Expiration Date"), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed by the
Corporation, in each case, as described below.
ADJUSTMENTS
To protect the value of the Rights to the holders, the
Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time (1) in the event of a
stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (2) upon the grant to
holders of the Common Shares of certain rights or warrants to
subscribe for or purchase Common Shares at a price, or securities
convertible into Common Shares with a conversion price, less than
the then current market price of Common Shares, or (3) upon the
distribution to holders of the Common Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in
Common Shares) or of subscription rights or warrants, other than
those referred to above.
These adjustments are called anti-dilution provisions and
are intended to ensure that a holder of Rights will not be
adversely affected by the occurrence of such events. With
certain exceptions, the Corporation is not required to adjust the
Purchase Price until cumulative adjustments require a change of
at least 1% in the Purchase Price. No fractional Common Shares
will be issued and in lieu thereof, an adjustment in cash will be
made based on the market price of the Common Shares on the last
trading day prior to the date of exercise.
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FLIP-OVER EVENTS AND FLIP-IN EVENTS
In the event that (1) the Corporation is acquired in a
merger or other business combination transaction and the
Corporation is not the surviving corporation, or (2) any person
consolidates or merges with the Corporation and all or part of
the Corporation's Common Shares are exchanged for securities,
cash or property of any other person, or (3) 50% or more of the
Corporation's consolidated assets or earning power are sold
(collectively, "Flip-Over Events"), proper provision will be made
so that each holder of a Right, other than the Acquiring Person,
will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring corporation
which at the time of such transaction will have a market value of
two times the exercise price of the Right. In the event that a
person acquires 15% or more of the outstanding Common Shares, (a
"Flip-In Event"), proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common
Shares having a market value of two times the exercise price of
the Right.
EXCHANGE OPTION
At any time after a person becomes an Acquiring Person, and
prior to the acquisition by such Acquiring Person of 50% or more
of the outstanding Common Shares, the Board of Directors of the
Corporation may exchange the Rights (other than Rights owned by
such person or group which have become void), in whole or in
part, at an exchange ratio of one Common Share per Right (subject
to adjustment).
REDEMPTION
At any time prior to the tenth calendar day following the
date of a public announcement that a person or group has become
an Acquiring Person, the Board of Directors of the Corporation
may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion
may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption
Price.
If the Board of Directors' ability to redeem the Rights
pursuant to the Rights Agreement has expired, but a Flip-Over
Event or certain Flip-In Events have not yet occurred, the
redemption right will be reinstated if the Acquiring Person
disposes of a sufficient number of the Corporation's Common
Shares so that such person then owns less than 10% of the
outstanding Corporation's Common Shares and if certain other
conditions are met.
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The terms of the Rights may be amended by the Board of
Directors of the Corporation without the consent of the holders
of the Rights, except that from and after such time as any person
becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Corporation,
including, without limitation, the right to vote or to receive
dividends.
A copy of the Rights Agreement is available from the
Corporation at no charge upon written request. This summary
description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by this reference.
