Exhibit 4.1
CAROLINA FIRST CORPORATION
and
CAROLINA FIRST BANK,
as Rights Agent
SHAREHOLDER RIGHTS AGREEMENT
November 9, 1993
As Amended and Restated as of December 18, 1996
Table of Contents
Section Page
1. Certain Definitions....................................................................................1
2. Appointment of Rights Agent............................................................................5
3. Issue of Right Certificates............................................................................5
4. Form of Right Certificates.............................................................................7
5. Countersignature and Registration......................................................................8
6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates..............................................................................8
7. Exercise of Rights; Exercise Price; Final Expiration Date of Rights....................................9
8. Cancellation and Destruction of Riqht Certificates....................................................11
9. Reservation and Availability of Common Stock..........................................................11
10. Common Stock Record Date..............................................................................12
11. Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights...........................12
12. Certificate of Adiusted Exercise Price or Number of Shares............................................19
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..................................19
14. Fractional Rights and Fractional Shares...............................................................22
15. Rights of Action......................................................................................22
16. Agreement of Right Holders............................................................................23
17. Right Certificate Holder Not Deemed a Shareholder.....................................................24
18. Concerning the Rights Agent...........................................................................24
19. Merger or Consolidation or Change of Name of Rights Agent.............................................24
20. Duties of Rights Agent................................................................................25
21. Change of Rights Agent................................................................................26
22. Issuance of New Right Certificates....................................................................27
23. Redemption............................................................................................27
24. Exchange..............................................................................................28
25. Notice of Certain Events..............................................................................29
26. Notices...............................................................................................30
27. Supplements and Amendments............................................................................31
28. Successors............................................................................................31
29. Determination and Actions by the Board of Directors...................................................31
30. Benefits of this Agreement............................................................................32
31. Severability..........................................................................................32
32. Governing Law.........................................................................................32
33. Counterparts..........................................................................................32
34. Descriptive Headings..................................................................................32
Exhibit A -- Form of Right Certificate...........................................................................A-1
Exhibit B -- Summary of Rights to Purchase Common Stock..........................................................B-1
AMENDED AND RESTATED SHAREHOLDER RIGHTS AGREEMENT
Shareholder Rights Agreement (as the same may from time to time be
amended or supplemented, this "Agreement"), dated as of November 9, 1993, as
amended and restated December 18, 1996, between Carolina First Corporation, a
South Carolina corporation (the "Company"), and Carolina First Bank, a South
Carolina state-chartered bank (the "Rights Agent", which term shall include any
successor Rights Agent hereunder).
W I T N E S S E T H
WHEREAS, on November 9, 1993 the Board of Directors of the Company
authorized and declared a dividend distribution to stockholders of record at the
Close of Business on November 24, 1993 (the "Record Date") of one Right (as
hereinafter defined) for each outstanding share of Company's $1.00 par value
common stock (the "Common Stock"), and authorizes the issuance of one Right for
each whole share of Common Stock of the Company which is issued or which becomes
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined), each Right initially representing the right to purchase one half of a
share of Common Stock, upon the terms and conditions set forth herein (the
"Rights");
WHEREAS, on December 18, 1996 the Board of Directors of the Company
amended and restated this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall on any date hereafter,
be the Beneficial owner of 20% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company or any of its
Subsidiaries, (iv) any entity or Person holding shares of Common Stock for or
pursuant to the terms of any such plan. The Persons described in clauses (i)
through (iv) above are referred to herein as "Exempt Persons." Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Stock by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Common Stock of the Company then
outstanding; provided, however, that if any Person (other than Exempt Persons)
shall become the Beneficial owner of 20% or more of the Common Stock of the
Company then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner of any
additional shares of Common Stock of
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the Company, then such Person shall be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person", as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "Adjustment Event" shall mean a Section 11(a)(ii) Event or any
Section 13 Event. ----------------
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement; provided, however,
that no Exempt Person shall be deemed an Affiliate or an Associate.
(e) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own" any securities:
(i) which such Person and such Person's Affiliates or
Associates, beneficially own, directly or indirectly (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement) or has the
right to dispose of;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately or after the passage of
time) pursuant to any agreement, arrangement or understanding, upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own" (1) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase
or exchange; (2) securities issuable upon exercise of Rights at any
time prior to the occurrence of an Adjustment Event; or (3) securities
issuable upon exercise of Rights from and after the occurrence of an
Adjustment Event, if such Rights were acquired by such Person or such
Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 or pursuant to Section 11(a)(i)
in connection with an adjustment made with respect to any of the Rights
heretofore specified in this clause (3);] or (B) the right to vote
pursuant to any agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under
this clause (B) if the agreement, arrangement or understanding to vote
such security (1) arises solely from a
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revocable proxy or consent given to such Person or any of such Person's
Affiliates or Associates in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act, or (2) is
made in connection with, or is to otherwise participate in, a proxy or
consent solicitation made or to be made pursuant to, and in accordance
with, the applicable rules and regulations promulgated under the
Exchange Act, in the case of either clause (1) or (2) of this proviso
only if such agreement, arrangement or understanding is not also then
reportable by such person on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in clause (B) of Section i(e)(ii) hereof)
or disposing of any securities of the Company; provided, however, that
(1) no Person engaged in business as an underwriter of securities shall
be deemed the Beneficial owner of any securities acquired through such
Person's participation as an underwriter or selling group member in
good faith in a firm commitment underwriting until the expiration of 40
days after the date of such acquisition and (2) no Person who is a
director or an officer of the Company shall be deemed the Beneficial
Owner of any securities of the Company that are beneficially owned by
any other director or officer of the Company solely as a result of his
or her position as director or officer of the Company.
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 Company, 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.
(f) "Business Day" shall mean any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of South Carolina are
authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M.,
Greenville time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Greenville time, on the next succeeding
Business Day.
(h) "Common Stock" shall mean the Common Stock, par value $1.00 per
share, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock (or equity
interest) with the greatest voting power of such Person, or the equity
securities or other equity interest having power to control or direct the
management of such person or, if such Person is a subsidiary of another Person,
the Person which ultimately controls such first-mentioned Person and which has
issued and outstanding such
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capital stock, equity securities or equity interests.
(i) "Current Per Share Market Price" shall have the meaning set forth
in Section 11(d)(i).
(j) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(k) "Disinterested Director" shall mean (i) any member of the Company's
Board of Directors who is unaffiliated with an Acquiring Person, or an Affiliate
or Associate of any such Person and was a member of the Company's Board of
Directors prior to the time that an Acquiring Person became such, and (ii) any
successor of a Disinterested Director who is unaf filiated with an Acquiring
Person, or any Affiliate or Associate of any such Person and is recommended to
succeed a Disinterested Director by a majority of the Disinterested Directors
then on the Company's Board of Directors.
(1) "Distribution Date" shall have the meaning defined in Section 3(a)
hereof.
(m) "Equivalent Common Stock" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(o) "Exchange Rate" shall have the meaning set forth in Section 24(a)
hereof
(p) "Exercise Price" shall have the meaning set forth in Section 4
hereof.
(q) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(r) "Group" shall mean two or more Persons acting as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of the Common Stock.
(s) "Person" shall mean any individual, firm, corporation, partnership
or other entity or Group, and shall include any successor (by merger or
otherwise) thereof; provided, however, that when two or more Persons act as a
partnership, limited partnership, syndicate or other Group for the purpose of
acquiring, holding disposing of the Common Stock, such partnership, limited
partnership, syndicate or other Group shall be deemed to be a single Person.
(t) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(u) "Record Date" shall have the meaning set forth in the recital
clause of this Agreement.
(v) "Redemption Date" shall have the meaning set forth in Section 7(a).
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(w) "Rights" shall have the meaning set forth in the recital clause of
this Agreement.
(x) "Right Certificate" shall have the meaning set forth in Section
3(a).
(y) "Section 11(a)(ii) Adjustment Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(z) "Section 11(a)(ii) Event" shall mean the event described in Section
11(a)(ii) hereof.
(aa) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(bb) "Share Acquisition Date" shall mean the first date on which there
shall be a public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(cc) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(dd) "Subsidiary" of any Person shall mean any other corporation or
other entity of which a majority of the voting power of the voting equity
securities or voting interests is owned, directly or indirectly, by such Person,
or which is otherwise controlled by such Person.
(ee) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ff) "Summary of Rights" shall have the meaning set forth in Section
3(b).
(gg) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable. In the event the Company appoints one or more Co-Rights Agents, the
respective duties of the Rights Agent and any Co-Rights Agents shall be as the
Company shall determine.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i)
the Close of Business on the 10th calendar day after the Share Acquisition Date,
(ii) the Close of Business on the 10th Business Day (or such later date as may
be determined by action of the Board of Directors of the Company prior to such
time as any Person shall become an Acquiring Person) after the date of (x) the
commencement, by any Person, other than an Exempt Person, of, or (y) the first
public announcement of the intention of any Person (other than an Exempt Person)
to
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commence, a tender or exchange offer if, upon consummation thereof, such Person
would be an Acquiring Person, including any such date which is after the date of
this Agreement and prior to the issuance of the Rights (the earliest of such
dates being herein referred to as the "Distribution Date"), the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by certificates for
the Common Stock registered in the names of the holders of the Common Stock
(which certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and the Rights will be transferable
only in connection with the transfer of the underlying shares of Common Stock.
The Board of Directors of the Company may defer the date set forth in clause
(ii) in the preceding sentence to a specified later date or to an unspecified
later date to be determined, with the concurrence of a majority of the
Disinterested Directors, by action of the Directors of the Company. As soon as
practicable after the Company has notified the Rights Agent of the occurrence of
the Distribution Date, the Rights Agent will send, by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the Close
of Business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more certificates, in substantially the form of
Exhibit A hereto (the "Right Certificates), evidencing one Right for each share
of Common Stock so held, subject to adjustment as provided herein. As of and
after the Close of Business on the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of the Summary of Rights, in substantially the form
attached hereto as Exhibit B, by first-class, postage prepaid mail, to each
record holder of the Common Stock as of the Close of Business on the Record
Date, at the address of such holder shown on the records of the Company. With
respect to certificates for the Common Stock outstanding as of the Record Date,
until the Distribution Date or the earlier of the Redemption Date or the Final
Expiration Date, the Rights will be evidenced by such certificates for the
Common Stock with or without a copy of the Summary of Rights attached thereto,
and the registered holders of the Common Stock shall also be the registered
holders of the associated Rights. Until the Distribution Date (or earlier
redemption, expiration or termination of the Rights), the transfer of any of the
certificates for the Common Stock outstanding on the Record Date, even without a
copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate.
(c) Certificates for the Common Stock issued after the Record Date, but
prior to the earlier of the Distribution Date, the Redemption Date or the Final
Expiration Date, shall be deemed also to be certificates for Rights, and shall
bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Shareholder Rights Agreement
between Carolina First Corporation and Carolina First Bank, as Rights
Agent, dated as of November 9, 1993, as such is amended from time to
time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of Carolina First Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
6
by this certificate. Carolina First Corporation will mail to the holder
of this certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances, Rights issued to
Acquiring Persons or any Affiliates or Associates thereof (as defined
in the Rights Agreement) and any subsequent holder of such Rights may
become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date or the earlier of the Redemption Date or the Final Expiration
Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the transfer of
any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. In the event
that the Company purchases or acquires any shares of Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Stock shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the shares of Common Stock
which are no longer outstanding.
Section 4. Form of Right Certificates. (a) The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall each be substantially in the form of Exhibit A hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law, rule or regulation or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Right Certificates, whenever distributed, shall be dated
as of the Record Date, and on their face shall entitle the holders thereof to
Purchase such number of shares of Common Stock as shall be set forth therein at
the price set forth therein (the "Exercise Price"), but the number of such
shares and the Exercise Price shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights beneficially owned by (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person or (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer which the Board of Directors of the Company has deter
mined is part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of Section 11 hereof, and any Right Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this sentence, shall
contain the following legend:
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The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). This Right Certificate and the Rights
represented hereby may become null and void under certain circumstances
as specified in Section 11 of the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after it becomes
aware of the existence an identity of any Acquiring Person or any Associate or
Affiliate thereof.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or any Assistant Secretary of
the Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificates may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at one of its offices designated as the appropriate place for
surrender of Right Certificates upon exercise or transfer, 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. (a)
Subject to the provisions of Section 4(b), Section 11 and 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 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
Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock (or following an Adjustment Event, other securities, cash
or other assets as the case may be) as the Right Certificate or Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights
8
Agent, and shall surrender the Right Certificate or Certificates to be
transferred, split up, combined or exchanged, with the form of assignment and
certificate duly executed, at the office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 11 and
Section 14 hereof, countersign and deliver to the Person entitled thereto a
Right Certificate or Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the Company
will execute and deliver a new Right Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Final Expiration Date of
Rights. (a) Subject to Section 11(a)(ii) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Xxxxxxx 0, Xxxxxxx 00(x)(xxx) and Section 23(a)), 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 and the certificate on
the reverse side thereof duly executed, to the Rights Agent at the office or
offices of the Rights Agent designated for such purpose, together with payment
of the aggregate Exercise Price for the total number of shares of Common Stock
(or other securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercised, at or prior to the earlier of (i) the
Close of Business on December 18, 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 which such Rights are exchanged as provided
in Section 24. Except as set forth in Section 11(a) hereof and notwithstanding
any other provision of this Agreement, any Person who prior to the Distribution
Date becomes a record holder of shares of Common Stock may exercise all of the
rights of a registered holder of a Right Certificate with respect to the Rights
associated with such shares of Common Stock in accordance with the provisions of
this Agreement, as of the date such Person becomes a record holder of shares of
Common Stock.
(b) The Exercise Price for each half share of Common Stock pursuant to
the exercise of a Right shall initially be $30.00 (equivalent to $60.00 for each
share of Common Stock), shall
9
be subject to adjustment from time to time provided in Section 11 and Section 13
hereof and shall be payable in lawful money of the United States of America in
accordance with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate on
the reverse side thereof duly executed, accompanied by payment of the Exercise
Price for the shares (or, following an Adjustment Event, other securities, cash
or other assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax (as determined by the Rights Agent) in cash, or by
certified check or bank draft payment to the order of the Company, the Rights
Agent shall, subject to Section 20(j) hereof, thereupon promptly (i)(A)
requisition from any transfer agent of the shares of Common Stock (or make
available, if the Rights Agent is the transfer agent therefor) certificates for
the number of shares of Common Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests, or
(B) if the Company shall have elected to deposit the total number of shares of
Common Stock issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts representing
such number of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common Stock represented by such receipts shall
be deposited by the transfer agent with the depositary agent) and the Company
will direct the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash, if any, to be paid
in lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) promptly after receipt of such certificates or depository 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 promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate. In the event
that the Company is obligated to issue other securities of the Company, pay cash
or distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(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 and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
Purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial owner (or former Beneficial owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
10
Section 8. Cancellation and Destruction of Riqht Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Common Stock (and,
following the occurrence of an Adjustment Event, other securities or out of its
authorized and issued shares held in its treasury) the number of shares of
Common Stock (and, following the occurrence of an Adjustment Event, other
securities) that, as provided in this Agreement will be sufficient to permit the
exercise in full of all outstanding Rights; provided, that such action need not
be taken with respect to shares of Common Stock (or other securities) issuable
upon occurrence of an Adjustment Event until the occurrence of such event.
(b) If at the time the Rights become exercisable, the then outstanding
shares of Common Stock are listed on any national or regional securities
exchange or are quoted on the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or any successor thereto or other
comparable quotation system, the Company shall use its best ef forts to cause,
from and after such time as the Rights become exercisable, all shares of Common
Stock (and, following the occurrence of an Adjustment Event, other securities)
reserved for issuance upon such exercise to be quoted on such system or listed
on such exchange, as the case may be.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with this
Agreement, or as soon as required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Common Stock or other
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus that at all times meets the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the date of the expiration of
the Rights. The Company will also take such action as may be appropriate under,
and which will ensure compliance with, the securities or blue sky laws of the
various states in connection with the exercisability of the Rights. The Company
may temporarily suspend for a period of time not to exceed ninety (90) days
after the date set forth in clause (i)
11
of the first sentence of this Section 9 (c), the exercisability of the Rights in
order to prepare and file such registration statement and permit it to become
effective. Upon such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect. Notwithstanding any 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.
(d) The Company covenants and agrees that it will take all such action
as maybe necessary to ensure that all shares of Common Stock (and, following the
occurrence of an Adjustment Event, other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly authorized and
issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that, subject to Section
6, 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 certificates for shares of Common Stock (or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than, or in respect of the issuance or delivery of securities in a name other
than that of, the registered holder of the Right Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for securities
in a name other than that of the registered holder upon the exercise of any
Rights until such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for Common Stock is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares of Common
Stock 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 Exercise 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 Stock transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the Common
Stock transfer books of the Company are open. Prior to the exercise of the Right
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a shareholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Exercise Price, Number and Kind of Shares or
Number of Rights. The Exercise Price, the number and kind of shares covered by
each Right and the
12
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding Common
Stock, (C) combine the outstanding Common Stock into a smaller number
of shares or (D) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Exercise 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 Common Stock or capital stock, as the case
may be, issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of Common
Stock or capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the
Common Stock (or other capital stock, as the case may be) transfer
books of the Company were open, he would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; 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 of the shares of the Company issuable
upon the exercise thereof.
(ii) Subject to Section 24, in the event any Person shall
become an Acquiring Person, then each holder of a Right, except as
provided in this paragraph (ii), shall thereafter have a right to
receive, upon exercise thereof at the then current Exercise Price in
accordance with the terms of this Agreement, and in lieu of one half
shares of Common Stock issuable upon exercise of such Rights prior to
such event, such number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then current
Exercise Price by the then number of one half shares of Common Stock
for which a Right was exercisable immediately prior to the occurrence
of a Section 11(a)(ii) Event and (y) dividing that product (which,
following such occurrence, shall thereafter be referred to as the
"Exercise Price" for each Right and for all purposes of this Agreement)
by 50% of the Current Per Share Market Price of the Common Stock
(determined pursuant to Section 11(d)) on the date of the occurrence of
a Section 11(a)(ii) Event (such number of shares is herein called the
"Adjustment Shares").
Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Xx xxxxxxx Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently
13
with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has
any continuing agreement, arrangement or understanding regarding the
transferred Rights, or (B) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
this Section 11(a), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 11(a) and Section 4(b)
hereof are complied with, but shall have no liability to any holder of
Right Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or any
Affiliates and Associates thereof or any trans feree of any of them
hereunder.
(iii) In the event that the number of shares of Common Stock
which are authorized by the Company's articles of organization but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full
of the Rights in accordance with Section 11(a)(ii), the Company shall:
(A) determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value") over (2)
the Exercise Price (such excess is herein called the "Spread"), and (B)
with respect to each Right, make adequate provision to substitute for
the Adjustment Shares, upon payment of the applicable Exercise Price,
(1) cash, (2) a reduction in the Exercise Price, (3) Common Stock or
other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock which the Board has
deemed to have the same value as shares of Common Stock (such shares or
units of shares of preferred stock are herein called "Equivalent Common
Stock")), (4) debt securities of the Company, (5) other assets, or (6)
any combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been determined by
the Board based upon the advice of a competent investment banking firm
selected by the Board; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the occurrence of a Section 11(a)(ii)
Event (the "Section 11(a)(ii) Adjustment Date"), then the Company shall
be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Exercise Price, shares of Common Stock
(to the extent available) and then, if necessary, cash, which shares or
cash have an aggregate value equal to the Spread. If the Board shall
determine in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety (90) days
after the Section 11(a)(ii) Adjustment Date, in order that the Company
may seek stockholder approval for the authorization of such additional
shares (such thirty (30) day period, as it may be extended, is herein
called the "Substitution Period"). To the extent that the Company
determines that some action need
14
be taken pursuant to the first or second sentence of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 11(a)
hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek an authorization
of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. For the purpose of this Section 11(a)(iii), the value of
Adjustment Shares shall be the Current Per Share Market Price of the
Common Stock on the Section 11(a)(ii) Adjustment Date, and the per
share or per unit value of any Equivalent Common Stock shall be deemed
to equal the Current Per Share Market Price of the Common Stock on such
date.
(b) If the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Stock or Equivalent Common Stock or
securities convertible into Common Stock or Equivalent Common Stock at a price
per share of Common Stock or per share of Equivalent Common Stock (or having a
conversion price per share, if a security convertible into Common Stock or
Equiva lent Common Stock) less than the Current Per Share Market Price (as
determined pursuant to Section 11(d) hereof) of the Common Stock on such record
date, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding on such record date, plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common Stock or Equivalent Common Stock to be offered (and the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Per Share Market Price and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of additional shares of Common Stock or Equivalent Common Stock 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 of the shares of the Company issuable upon the exercise
thereof. 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 the Current Per Share Market Price thereof determined in ac cordance
with Section 11(d) hereof. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not so
issued, the Exercise Price shall be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a con solidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
periodic cash dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in Common Stock, but including any
dividend payable in stock other than Common Stock) or options, subscription
rights or warrants (excluding those referred to in Section 11(b)), the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Per Share Market Price (as
determined pursuant to Section 11(d) hereof) of Common Stock on such record
date, less the Current Per Share Market Price (as determined pursuant to Section
11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such options, subscription rights or warrants applicable
to one share of Common Stock and the denominator of which shall be the Current
Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one
share of Common Stock; 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 of the shares of the Company issuable upon the exercise
thereof. 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 Exercise
Price shall again be adjusted to be the Exercise Price which would be in effect
if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Current Per Share Market
Price" of any share of Common Stock or any other stock or any Right or other
security or any other property shall be determined as provided in this Section
11(d).
(i) In the case of a publicly-traded stock or other security
(hereinafter in this Section 11(d)(i) a "Security"), the Current Per
Share Market Price on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that for the purpose
of computations made pursuant to Section 11(a)(iii) hereof, the Current
Per Share Market Price on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the ten (10)
consecutive Trading Days immediately following such date; and provided
further, that in the event that the Current Per Share Market Price of
any Security is determined during a period following the announcement
by the issuer of such Security of (x) a dividend or distribution on
such Security payable in shares of such Security or securities
convertible into shares of such Security (other than the Rights) or (y)
any subdivision, combination or reclassification of such Security, and
prior to the expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, after the ex-dividend date
for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such
case, the Current Per Share Market Price shall be properly adjusted to
take into account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York
15
Stock Exchange or, if the Securities 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 such
Security is listed or admitted to trading; or, if not listed or
admitted to trading on any national securities exchange, the last
quoted price (or, if not so quoted, the average of the last quoted 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 no
bids for such Security are quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional
market maker making a market in such Security selected by the Board of
Directors of the Company. If on any such date no market maker is making
a market in such Security, the Current Per Share Market Price of such
Security on such date shall be determined reasonably and with utmost
good faith to the holders of the Rights by the Board of Directors of
the Company, including, if at the time of such determination there is
an Acquiring Person, a majority of the Disinterested Directors then in
office, or if there are no Disinterested Directors, by a competent
investment banking firm selected by the Board of Directors, which
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the
Rights. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which such Security is listed or
admitted to trading is open for the transaction of business or, if such
Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) If a Security is not publicly held or not so listed or
traded, "Current Per Share Market Price" shall mean the fair value per
share of stock or per other unit of such Security, determined
reasonably and with utmost good faith to the holders of the Rights by
the Board of Directors of the Company, including, if at the time of
such determination there is an Acquiring Person, a majority of the
Disinterested Directors then in office, or if there are no
Disinterested Directors, by a competent investment banking firm
selected by the Board of Directors, which determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights.
(iii) In the case of property other than securities, the
Current Per Share Market Price thereof shall be determined reasonably
and with utmost good faith to the holders of Rights by the Board of
Directors of the Company, including, if at the time of such
determination there is an Acquiring Person, a majority of the
Disinterested Directors then in office, or if there are no
Disinterested Directors, by a competent investment banking firm
selected by the Board of Directors, which determination shall be
described in a statement filed with the Rights Agent and shall be
binding upon the Rights Agent and the holders of the Rights.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Exercise Price; provided, however,
that any adjustments which by reason of this
16
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a
share, as the case may be. Notwithstanding the first sentence of this Section 11
(e), any adjustment required by this Section shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which mandates
such adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Exercise Price thereof shall be subject to ad justment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Section 11(a) through
(c), (e), (g) through (k), and (m), inclusive, and the provisions of sections 7,
9, 10, 13 and 14 hereof with respect to the Common Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of shares (or fractions
thereof) of Common Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Exercise Price as a result of the
calculations made in Section 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 Exercise Price, that number of shares of Common Stock
(calculated to the nearest one ten-thousandth) obtained by (i) multiplying (x)
the number of shares covered by a Right immediately prior to this adjustment by
(y) the Exercise Price in effect immediately prior to such adjustment of the
Exercise Price, and (ii) dividing the product so obtained by the Exercise Price
in effect immediately after such adjustment of the Exercise Price.
(i) The Company may elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Exercise Price in effect immediately prior to adjustment of the Exercise
Price by the Exercise Price in effect immediately after adjustment of the
Exercise Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Exercise Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If
17
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates evidencing, subject to Section 14 hereof,
the additional Rights to which such holders shall be entitled as a result of
such adjustment, or at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the option of
the Company, the adjusted Exercise Price) and shall be registered in the names
of the holders of record of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Exercise Price or
the number of shares of Common Stock issuable upon the exercise of the Rights,
the Right Certificates there tofore and thereafter issued may continue to
express the Exercise Price per share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Exercise Price below the then par value, if any, of the number of shares of
Common Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the number of shares of Common Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number of
shares of Common Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Exercise Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Exercise 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 Stock, issuance wholly
for cash of any shares of Common Stock at less than the Current Per Share Market
Price, issuance wholly for cash of shares of Common Stock or securities which by
their terms are convertible into or exchangeable for shares of Common Stock,
stock dividends or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to holders of its
Common Stock, shall not be taxable to such shareholders.
18
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries taken as a whole, to any other Person or Persons if (x) at the time
of or immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments outstanding or agreements or arrangements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale the shareholders of a
Person who constitutes, or would constitute, the "Principal Party" for the
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that after the Distribution Date
it will not, except as permitted by Section 23 or Section 27 hereof, take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
Section 12. Certificate of Adiusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment contained therein and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, on or after the Share Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which is not prohibited by Section 11(n) hereof), and the Company
shall not be the continuing or surviving corporation of such consolidation or
merger; (y) any Person (other than a Subsidiary of the Company in a transaction
which is not prohibited by Section 11(n) hereof) shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property; or (z) the Company shall sell, mortgage or otherwise transfer (or one
or more of its Subsidiaries shall sell, mortgage or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company or any Subsidiary of the Company in one or more transactions each of
which is not prohibited by Section 11(n) hereof), then, and in each such case,
proper provision shall be made
19
so that: (i) each holder of a Right, except as provided otherwise herein, shall
have the right to receive, upon the exercise thereof at the then current
Exercise Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid and nonassessable shares of freely
tradeable Common Stock of the Principal Party (as hereinafter defined in Section
13(b)), free and clear of rights of call or first refusal, liens, encumbrances
or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Exercise Price by the number of one half shares of
Common Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
one half shares of Common Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the Exercise Price
in effect immediately prior to such first occurrence) and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Exercise Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Per Share Market Price (determined pursuant
to Section 11(d) hereof) of the Common Stock of such Principal Party on the date
of consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply to such Principal
Party; and (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common Stock
to permit exercise of all outstanding Rights in accordance with this Section
13(a)) in connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights. The Company shall not enter into any transaction of
the kind set forth in this subsection if at the time of the consummation of such
transaction there are any options, warrants, rights, conversion or exchange
provisions or securities outstanding or any agreements or arrangements in effect
which, as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights. If,
in the case of a transaction of the kind described in clause (z) of the first
sentence of this subsection, the Person or Persons to whom assets or earning
power are sold or otherwise transferred are individuals, then the preceding
sentences of this subsection shall be inapplicable, and the Company shall
require as a condition to such sale or transfer that such Person or Persons pay
to each holder of a Rights Certificate, upon its surrender to the Rights Agent
and in exchange therefor (without requiring payment by such holder), cash in the
amount determined by multiplying the then current Exercise Price by the number
of one half shares of Common Stock for which a Right is then exercisable.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to the
merger or
20
consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; provided,
however, that in any such case, (x) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, "Principal Party"
shall refer to such other Person; and (y) in case such Person is a
Subsidiary, directly or indirectly, or more than one Person, the Common
Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value
of shares outstanding.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto (x) the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and (y) the Company and each Principal Party
and each other Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
Section 13(a) and (b) and further providing that, as soon as practicable after
the date of any consolidation, merger, sale or transfer of assets mentioned in
Section 13(a), the Principal Party at its own expense 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, use its
best efforts to cause such registration statement to become effective
as soon as practicable after such filing and use its best efforts to
cause such registration statement to remain effective (with a
prospectus that at all times meets the requirements of the Securities
Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under
the blue sky laws of such jurisdictions as may be necessary or
appropriate;
(iii) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon exercise of
the Rights on a national securities exchange or to meet the
eligibility requirements for quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates
which comply in all material respects with the requirements for
registration on Form 10 under the Exchange Act.
21
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. If any Section 13 Event shall occur
at any time after the occurrence of a Section 11(a)(ii) Event, the Rights which
have not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights, or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there may be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For purposes of this Section 14(a), the current market value of one Right
shall be the closing price per Right for the Trading Day immediately prior to
such date on which fractional Rights would have been otherwise issuable. The
closing price for any Trading Day shall be the last sale price, regular way, or,
in case no such sale takes place on such Trading 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 not listed or admitted to trading on any
national securities exchange, the last quoted price (or, if not so quoted, the
average of the last quoted 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 Trading Day no bids for the Rights are quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no market maker is making a market
in the Rights the current market value of the Rights on such Trading Day shall
be determined reasonably and with utmost good faith to the holders of the Rights
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of 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 per share of
Common Stock. For purposes of this Section 14(b), the current market value per
share of Common Stock shall be the closing price per share of Common Stock
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 Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than
22
rights of action vested in the Rights Agent pursuant to 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 Stock); and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Stock), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the
Common Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Right
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Holders of Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred by them in any action to enforce
the provisions of this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and with the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, each Right will be transferable
only simultaneously and together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
(c) subject to Sections 6 and 11, the Company and the Rights Agent may
deem and treat the person in whose name a Right Certificate (or, prior to the
Distribution Date, the as sociated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificates or the
associated Common Stock certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as the result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligations; provided, however, that the Company must use
its best efforts to have any such order, decree or ruling
23
lifted or otherwise overturned as soon as possible.
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 shares of Common Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in 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. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Right Certificate
or certificate for Common Stock or other securities of the Company, instrument
of assignment or transfer, power of attorney, en dorsement, 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 in reliance upon
the advice of counsel as set forth in Section 20.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust or shareholder services business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided 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
24
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 or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
(b) 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.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authori zation 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
(including, without limitation, the identity of any Acquiring Person and the
determination of Current Per Share Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
any duly authorized officer of the Company and delivered to the Rights Agent;
and such certificate shall be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good faith in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the
25
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a) hereof) or any adjustment required under the
provisions of Sections 3, 11, 13, 23 or 24 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of a
certificate describing any such adjustment furnished in accordance with Section
12 hereof), nor shall it be responsible for any determination by the Board of
Directors of the Company of current market value of the Rights or Common Stock
pursuant to the provisions of Section 14 hereof; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Agreement or any Right Certificate or as to whether any shares of Common
Stock will, when so issued, be validly authorized and issued, fully paid and
nonassessable; nor shall it be under any obligation to institute any action,
suit or legal proceeding or to take any other action likely to involve expense
unless the Company or one or more of the registered holders of the Rights
Certificates shall furnish the Rights Agent with security and indemnity to its
satisfaction for any costs and expenses which may be incurred; nor shall it be
liable for any failure to perform any duties except as specifically set forth
herein and no implied covenants or obligations shall be read into this Agreement
against the Rights Agent, whose duties and obligations shall be determined
solely by the express provisions hereof.
(f) The Company agrees that it will inform the Rights Agent promptly
upon the Company's determination that a Person has become an Acquiring Person,
and the Rights Agent will not be responsible for making such determination prior
to such notice by the Company. The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be per formed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any duly authorized
officer of the Company, and is authorized to apply to such officers for advice
or instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this 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 such application on or after the date specified in
such application (which date shall not be less than five Business Days after the
date any officer of the Company actually receive such application, unless any
such officer shall have consented in writing to an earlier date) un less, 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 Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers vested in it or perform any of its duties hereunder either directly 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 attorney
or agent or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided the Rights Agent exercised reasonable care in
the selection or continued employment of such agent.
(j) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause (1) or clause (2)
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent (with or without cause) upon
thirty (30) days notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
by registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the incumbent Rights Agent or the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of the State of North Carolina
or the State of South Carolina (or of any other state of the United States so
long as such corporation is authorized to do business as a banking institution
in the State of North Carolina or the State of South Carolina), in good
standing, which is authorized under such
26
laws to exercise shareholder services or corporate trust powers and is subject
to supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an Affiliate of a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Exercise Price and the number or kind or class of shares of stock or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or ar rangement, or upon
the exercise, conversion or exchange of securities hereafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustments shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption. (a) The Board of Directors of the Company may,
at its option, at any time prior to such time as a Person becomes an Acquiring
Person, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.001 per Right, as such amount may be appropriately
adjusted, as determined by the Board of Directors, to reflect any transaction of
the kind described in clauses (A) through (D) of Section 11(a)(i) occurring
after the date hereof (such redemption price being hereinafter referred to as
the "Redemption Price"). In considering whether to redeem the Rights, the Board
of Directors of the Company may consider the best long-term and short-term
interests of the Company, including, without limitation, the effects of the
redemption of the Rights upon employees, suppliers and customers of the Company
or any Subsidiary of the Company and communities in which offices or other
27
establishments of the Company or any Subsidiary of the Company are located and
all other pertinent factors. The redemption of the Rights by the Board of
Directors may be effective at such time, on such basis and with such conditions
as such Board of Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the Board
of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to the Rights Agent and to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of is
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, or in connection with the purchase, acquisition or
redemption of shares of Common Stock prior to the Distribution Date.
(c) The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Per Share Market Price of the
Common Stock as of the time of redemption) or any other form of consideration
deemed appropriate by the Board.
Section 24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time after any Person shall have become an Acquiring Person,
exchange all or any part of the then outstanding and exercisable Rights (which
shall not include Rights which have become void pursuant to the provisions of
Section 11(a)(ii)) for Common Stock of the Company at an exchange rate of one
share of Common Stock per Right, appropriately adjusted to reflect any
transaction specified in clauses (A) through (D), inclusive, of Section 11(a)
(i) occurring after the date hereof (such exchange rate being hereinafter called
the "Exchange Rate"); provided, however, that the Board of Directors shall not
be empowered to effect such an exchange at any time after any Person (other than
an Exempt Person), together with all Affiliates and Associates of such Person,
shall have become the Beneficial Owner of 50% or more of the Common Stock of the
Company then outstanding.
(b) Immediately after any action by the Board of Directors of the
Company directing the exchange of any Rights pursuant to subsection (a) of this
Section 24, notice of which shall be filed with the Rights Agent, and without
any further action and without any notice, the right to exercise such Rights
shall terminate and each registered holder of such Rights shall thereafter be
entitled to receive only the number of shares of Common Stock which shall equal
the number of Rights held by such registered holder multiplied by the Exchange
Rate. The Company shall give prompt public notice of any exchange directed
pursuant to such subsection (a); provided,
28
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such exchange. Within 10 days after action by such Board
of Directors directing the exchange of such Rights, the Company shall mail a
notice of exchange to all registered holders of such Rights at their last
addresses appearing upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not received by the registered holder to whom sent; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of any such exchange. Each such notice shall state the
method by which the exchange of Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata among the registered holders of
the Rights based upon the number of Rights held (excluding Rights which have
become void pursuant to the provisions of Section 11(a)(ii)); and in such case,
a new Rights Certificate evidencing the Rights not being exchanged shall be
prepared and executed by the Company and countersigned and delivered by the
Rights Agent to the registered holder of such Rights subject to the provisions
of Section 14.
(c) In the event that there shall be an insufficient number of shares
of Common Stock authorized but unissued or issued and held in the treasury of
the Company to permit an exchange of Rights directed by the Board of Directors
of the Company, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon such exchange of
the Rights. In any such exchange, the Company may, at its option, substitute
Equivalent Common Stock for some or all of the Common Stock otherwise
exchangeable for the Rights.
(d) The Company shall not be required to issue fractional shares of
Common Stock in exchange for Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common Stock,
the Company shall pay to the registered holders of the Rights with respect to
which such fractional Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the Current Per Share Market value of Common Stock
(as determined as provided in Section 11(d)) for the Trading Day immediately
prior to the date of such exchange.
Section 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Common Stock or to make any
other distribution to the holders of Common Stock (other than a regular periodic
cash dividend out of earnings or retained earnings of the Company), or (ii) to
offer to the holders of Common Stock rights or warrants to subscribe for or to
purchase any additional shares of Common Stock or shares of stock of any class
or any other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification involving
only the subdivision of outstanding shares of Common Stock), or (iv) to effect
any consolidation or merger into or with, or to effect any sale, mortgage or
other transfer (or to permit one or more of its Subsidiaries to effect any sale,
mortgage or other transfer), in one transaction or a series of related
transactions, of 50% or more of the assets or earning power
29
of the Company and its Subsidiaries (taken as a whole) to, any other person
(other than a Subsidiary of the Company in one or more transactions each of
which is not prohibited by Section 11(n) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a 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, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Common Stock, if
any such date is to be fixed, and such notice shall be so given, in the case of
any action covered by clause (i) or (ii) above, at least ten (10) days prior to
the record date for determining holders of the shares of Common Stock for
purposes of such action, and in the case of any such other action, at least ten
(10) days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock, whichever
shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each
registered holder of a Right Cer tificate, in accordance with Section 26 hereof,
a notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof.
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 company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Carolina First Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Carolina First Bank
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Notices or demands authorized by this Agreement to be given or made by the
company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, to the holder of any certificate representing shares of
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
30
Section 27. Supplements and Amendments. Prior to the Distribution Date,
the Company and the Rights Agent shall, if so directed by the Company,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holder
of Right Certificates 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 Company may deem necessary or desirable and which shall not adversely
affect, as determined solely by the Company, the interests of the holders of the
Rights or the Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, however, that this
Agreement may not be supplemented or amended pursuant to clause (iii) of this
sentence (A) to lengthen any time period unless (1) approved by a majority of
the Disinterested Directors then in office and (2) such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, registered holders of the Rights, or (B) to lengthen any time
period relating to when the Rights may be redeemed if at such time the Rights
are not then redeemable. Without limiting the foregoing, the Company may at any
time prior to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the thresholds set forth in Sections 1(a) and 3(a) to not
less than the greater of (i) the sum of .001% and the largest percentage of the
outstanding Common Shares then known by the Company to be beneficially owned by
any Person (other than an Exempt Person) and (ii) 10%. Upon the delivery of such
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made on or after the Distribution Date which changes the Redemption
Price, the Final Expiration Date, the Exercise Price or the number of shares (or
portions thereof) of Common Stock for which a Right is exercisable prior to the
Dis tribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determination and Actions by the Board of Directors. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company (with, where
specifically provided for herein, the approval of a majority of the
Disinterested Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the approval
of
31
a majority of the Disinterested Directors) or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors (or, where specifically provided for herein, by a majority of the
Disinterested Directors) in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject any member of the Board of Directors or any
of the Disinterested Directors to any liability to the holders of the Rights or
to any other person.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
Provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company (including, if at the time of such determination, there
is an Acquiring Person, a majority of the Disinterested Directors then in
office) determines in its good faith judgment that severing the invalid language
from the Agreement would adversely affect the purpose or effect of the
Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the Close of Business on the tenth day
following the date of such determination by the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of South Carolina 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 to be performed entirely within South Carolina.
Section 33. 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 34. Descriptive Headings. Descriptive headings of the several
Sections of this
32
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ATTEST: CAROLINA FIRST CORPORATION
By:______________________ By:_____________________________
Xxxxxxx X. Hummers III Xxxx X. Xxxxxxx, Xx.
Secretary President and CEO
ATTEST: CAROLINA FIRST BANK
By:_________________________ By:____________________________
Xxxxxxx X. Hummers III Xxxxx X. Xxxxx, Xx.
Cashier President
33
Exhibit A
[Form of Right Certificate]
Certificate No. R-_______________ ____________________ Rights
NOT EXERCISABLE AFTER DECEMBER 18, 2006 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.] [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME VOID UNDER CERTAIN CIRCUMSTANCES AS SPECIFIED IN SECTION 11(a) OF THE
RIGHTS AGREEMENT.]
RIGHT CERTIFICATE
CAROLINA FIRST 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 Shareholder Rights Agreement dated as of November 9, 1993, as amended and
restated as of December 18, 1996 (the "Rights Agreement") between Carolina First
Corporation (the "Company"), and Carolina First Bank (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to the Close of Business on
December 18, 2006, at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one half of a fully paid and
nonassessable share of common stock, par value $1.00 per share (the "Common
Stock"), of the Company, at an exercise price of $30.00 per half share (the
"Exercise Price") equivalent to $60.00 for each share), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase and
the related Certificate duly executed. The number of Rights evidenced by this
Right Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above and the Exercise Price per share set forth above, are
the number and Exercise Price as of _______________ based on the Common Stock as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in
A-2
the Rights Agreement), (ii) a transferee of any such Acquiring Person, Affiliate
or Associate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a Person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Right shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Exercise Price and the number
of shares of Common Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal offices of the
Company and the Rights Agent and are also available upon written request to the
Company or the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced by the Right
Certificate or 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
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Board of Directors of the Company at
its option at a redemption price of $.001 per Right (payable in cash, Common
Stock or other consideration deemed appropriate by the Board of Directors), or
may be exchanged, in whole or in part, for Common Stock.
No fractional shares of Common Stock 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, as such, of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of Common
Stock or any other securities of the Company 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 stockholder of the Company or any right to vote for the election of
A-3
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or 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 purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _________, 19__.
ATTEST: CAROLINA FIRST CORPORATION
By:______________________ By:___________________________
Secretary President
Countersigned:
CAROLINA FIRST BANK, as Rights Agent
---------------------------
President
A-3
[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 Company, with full
power of substitution.
Dated: ____________ 19__ ______________________________
Signature
Signature Guaranteed:___________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ______ are ________
are not being transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned did ____ did not ____ directly or indirectly acquire the Rights
evidenced by this Right Cer tificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: ____________ 19__ __________________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-4
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights represented by the Right Certificate.)
To: Carolina First Corporation:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the shares of Common Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
----------------------------------------------------------------
(Please print name and address)
---------------------------------
(Please insert social security
or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:
----------------------------------------------------------------
(Please print name and address)
----------------------------------
(Please insert social security
or other identifying number)
-----------------------------------
Signature
Signature Guaranteed:_______________________________
A-5
Exhibit B
CAROLINA FIRST CORPORATION
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On November 9, 1993, the Board of Directors of Carolina First
Corporation (the "Company") declared a dividend distribution to stockholders of
record at the close of business on November 24, 1993 of one Common Stock
Purchase Right for each outstanding share of Company's Common Stock. Each Right
entitles the registered holder to purchase from the Company one half share of
Common Stock, par value $1.00 per share (the "Common Stock"), at a cash exercise
price of $18.00), subject to adjustment. The description and terms of the Rights
are set forth in a Shareholder Rights Agreement between the Company and Carolina
First Bank, as Rights Agent.
Initially, the Rights will not be exercisable and will be attached to
all outstanding shares of Common Stock. No separate Right Certificates will be
distributed. The Rights will separate from the Common Stock and a Distribution
Date will occur upon the earliest of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 20% or more of the outstanding
shares of Common Stock (the date of said announcement being referred to as the
"Share Acquisition Date") and (ii) 10 business days following the commencement
of a tender offer or exchange offer that would result in a Person or group
owning 20% or more of the outstanding shares of Common Stock.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (a) the Rights will be evidenced by the Common Stock certificates and
will be transferred with and only with such Common Stock certificates, (b) new
Common Stock certificates issued after November 24, 1993 will contain a notation
incorporating the Shareholder Rights Agreement by reference, and (c) the
surrender for transfer of any certificates for Common Stock will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on November 24, 2003, unless previously redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of Common Stock as of the close of business
on the Distribution Date and, thereafter, the separate Right Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
ln the event that (i) a Person acquires beneficial ownership of 20% or
more of the Company's Common Stock, (ii) the Company is the surviving
corporation in a merger with an Acquiring Person or any Affiliate or Associate
and the Common Stock is not changed or exchanged, (iii) an Acquiring Person
engages in one of a number of self-dealing transactions specified in the
Shareholder Rights Agreement, or (iv) an event occurs which results in an
Acquiring Person's ownership interest being increased by more than 1% (e.g., a
reverse stock split), proper provision will be made so that each holder of a
Right will thereafter have the right to receive upon exercise thereof at the
then current exercise price, that number of shares of Common Stock (or in
certain circumstances, cash, property, or other securities of the Company)
having a market value of two times such exercise price. However, the Rights are
not
B-1
exercisable following the occurrence of any of the events set forth above until
such time as the Rights are no longer redeemable as set forth below.
Notwithstanding any of the foregoing, rights that are or were beneficially owned
by an Acquiring Person shall become null and void.
In the event that, at any time following the Share Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction or (ii) 50% or more of the Company's assets or earning power is
sold, each holder of a Right shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a market value equal to
two times the exercise price of the Right.
At any time after any person becomes an Acquiring Person and prior to such
the time such Person, together with its Affiliates and Associates, becomes the
Beneficial Owner of 50% or more of the outstanding Common Stock, the Board of
Directors of the Company may exchange the Rights (other than Rights which have
become void), in whole or in part, at the exchange rate of one share of Common
Stock per Right, subject to adjustment as provided in the Rights Agreement.
The exercise price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or securities convertible into Common
Stock at less than the current market price of the Common Stock, or (iii) upon
the distribution to holders of the Common Stock of evidence of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the exercise price will be
required until cumulative adjustments amount to at least 1% of the exercise
price. No fractional shares of Common Stock will be issued and, in lieu thereof,
an adjustment, in cash will be made based on the fair market value of the Common
Stock on the last trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of
$.001 per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors) by the Board of Directors at any time
prior to the close of business on the tenth day after the Share Acquisition Date
or the final expiration Date of the Rights (whichever is earlier); provided that
under certain circumstances, the Rights may not be redeemed unless there are
Disinterested Directors in office and such redemption is approved by a majority
of such Disinterested Directors. After the redemption period has expired, the
Company's right of redemption may be reinstated upon the approval of the Board
of Directors if an Acquiring Person reduces his beneficial ownership to 15% or
less of the outstanding shares of Common Stock in transaction or series of
transactions not involving the Company and there are no other Acquiring Persons.
Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and thereafter the only right of the holders
of Rights will be to receive the redemption price.
Until a Right is exercised, the holder will have no rights as a
stockholder of the Company (beyond those as an existing stockholder), including
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of an
B-1
acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement, other than those
relating to the principal economic terms of the Rights, may be amended by the
Board to cure any ambiguity, defect or inconsistency, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement. Amendments adjusting time periods may, under certain
circumstances, require the approval of a majority of Disinterested Directors, or
otherwise be limited.
A copy of the Shareholder Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on Form 8-K
dated November 9, 1993. A copy of the Shareholder Rights Agreement is available
free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Shareholder Rights Agreement.
B-1
