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EXHIBIT 4.1
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SUMMIT PROPERTIES INC.
and
FIRST UNION NATIONAL BANK,
as Rights Agent
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Shareholder Rights Agreement
Dated as of December 14, 1998
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TABLE OF CONTENTS
Section Page
1. Certain Definitions ................................................... 1
2. Appointment of Rights Agent ........................................... 7
3. Issue of Right Certificates ........................................... 7
4. Form of Right Certificates ............................................ 10
5. Countersignature and Registration ..................................... 11
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates ............... 12
7. Exercise of Rights; Exercise Price; Expiration Date of Rights ......... 12
8. Cancellation and Destruction of Right Certificates .................... 15
9. Reservation and Availability of Preferred Stock ....................... 15
10. Preferred Stock Record Date ........................................... 16
11. Adjustment of Exercise Price, Number and Kind of
Shares or Number of Rights ............................................ 17
12. Certificate of Adjusted Exercise Price or Number of Shares ............ 26
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power... 26
14. Fractional Rights and Fractional Shares ............................... 29
15. Rights of Action ...................................................... 30
16. Agreement of Right Holders ............................................ 30
17. Right Certificate Holder Not Deemed a Shareholder ..................... 31
18. Concerning the Rights Agent ........................................... 31
19. Merger or Consolidation or Change of Name of Rights Agent ............. 32
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20. Duties of Rights Agent ............................................. 32
21. Change of Rights Agent ............................................. 35
22. Issuance of New Right Certificates ................................. 36
23. Redemption ......................................................... 36
24. Exchange ........................................................... 37
25. Notice of Certain Events ........................................... 39
26. Notices ............................................................ 40
27. Supplements and Amendments ......................................... 41
28. Successors ......................................................... 42
29. Determinations and Actions by the Board of Directors ............... 42
30. Benefits of this Agreement ......................................... 42
31. Severability ....................................................... 42
32. Governing Law ...................................................... 43
33. Counterparts ....................................................... 43
34. Descriptive Headings ............................................... 43
Exhibit A -- Articles Supplementary to the Articles of
Incorporation Classifying and Designating
the Series A Junior Participating
Cumulative Preferred Stock
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of the Rights
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SHAREHOLDER RIGHTS AGREEMENT
Agreement, dated as of December 14, 1998, between Summit Properties
Inc., a Maryland corporation (the "Company"), and First Union National Bank, a
national banking association (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company desires to provide
shareholders of the Company with the opportunity to benefit from the long-term
prospects and value of the Company and to ensure that shareholders of the
Company receive fair and equal treatment in the event of any proposed takeover
of the Company; and
WHEREAS, on December 14, 1998, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as such term is
hereinafter defined) for each outstanding share of Common Stock, par value $0.01
per share, of the Company (the "Common Stock") outstanding as of the close of
business on December 15, 1998 (the "Record Date"), and contemplates the issuance
of one Right for each share of Common Stock of the Company issued (whether
originally issued (including upon the conversion of Excess Stock (as such term
is defined in the Company's Amended and Restated Articles of Incorporation, as
amended) into Common Stock) or sold from the Company's treasury, except in the
case of treasury shares having associated Rights) between the Record Date and
the earlier of the Distribution Date or the Expiration Date (as such terms are
hereinafter defined), each Right initially representing the right to purchase
one one-thousandth of a share of Series A Junior Participating Cumulative
Preferred Stock of the Company having the rights, powers and preferences set
forth on Exhibit A hereto, upon the terms and subject to the conditions
hereinafter set forth (the "Rights"); and
WHEREAS, the Company desires to appoint the Rights Agent to act as
rights agent hereunder, in accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the shares of Common Stock of the
Company then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company, (iii) any
employee benefit plan or compensation
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arrangement of the Company or any Subsidiary of the Company or (iv) any Person
holding shares of Common Stock of the Company organized, appointed or
established by the Company or any Subsidiary of the Company for or pursuant to
the terms of any such employee benefit plan or compensation arrangement (the
Persons described in clauses (i) through (iv) above are referred to herein as
"Exempt Persons"); provided, however, that the term "Acquiring Person" shall
not include any Grandfathered Person, unless such Grandfathered Person at any
time after the Grandfathered Time becomes the Beneficial Owner of more than the
Grandfathered Percentage of the shares of Common Stock of the Company then
outstanding. Any Grandfathered Person who after the Grandfathered Time becomes
the Beneficial Owner of less than 15% of the shares of Common Stock of the
Company then outstanding shall cease to be a Grandfathered Person.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition by the Company of Common Stock of the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% (or in
the case of a Grandfathered Person, the Grandfathered Percentage applicable to
such Grandfathered Person) or more of the shares of Common Stock of the Company
then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% (or in the case of a Grandfathered Person, the
Grandfathered Percentage applicable to such Grandfathered Person) or more of
the shares of 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 (other than pursuant to a
stock split, stock dividend or similar transaction) of Common Stock of the
Company and immediately thereafter be the Beneficial Owner of 15% (or in the
case of a Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person) or more of the shares of Common Stock of the Company then
outstanding, then such Person shall be deemed to be an "Acquiring Person."
In addition, notwithstanding the foregoing, a Person shall not be an
"Acquiring Person" if the Board of Directors of the Company determines that a
Person who would otherwise be an "Acquiring Person," has become such without
intending to become an "Acquiring Person," and such Person divests as promptly
as practicable (or within such period of time as the Board of Directors of the
Company determines is reasonable) a sufficient number of shares of Common Stock
of the Company so that such Person would no longer be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this Section 1(a).
(b) "Adjustment Shares" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations (the "Rules") under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as in effect on the date of this Agreement; provided,
however, that no Person who is a director or officer of the
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Company shall be deemed an Affiliate or an Associate of any other director or
officer of the Company solely as a result of his or her position as director or
officer of the Company.
(d) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, beneficially owns
(as determined pursuant to Rule 13d-3 of the Rules under the Exchange
Act, as in effect on the date of this Agreement);
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has:
(A) the right to acquire (whether such
right is exercisable immediately or only after the passage of
time or upon the satisfaction of any conditions or both)
pursuant to any agreement, arrangement or understanding
(whether or not in writing) (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) or upon
the exercise of conversion rights, exchange rights, rights
(other than 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 or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; (2) securities issuable
upon exercise of these Rights at any time prior to the
occurrence of a Triggering Event; or (3) securities issuable
upon exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such Person
or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Sections 3(a), 11(i) or 22
hereof; 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 revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the Rules of the Exchange Act and (2) is not
also then reportable by such person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(C) the right to dispose of pursuant to
any agreement, arrangement or understanding (whether or not
in writing) (other than customary arrangements with and
between underwriters and selling group members with
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respect to a bona fide public offering of securities); 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) (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause
(B) of Section 1(d)(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 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, as a result of his or her position as director or officer of
the Company, the Beneficial Owner of any securities of the Company that are
beneficially owned by any other director or officer of the Company.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the City of New
York, New York are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean
5:00 P.M., New York, New York time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., New York, New York
time, on the next succeeding Business Day.
(g) "Common Stock" when used in reference to the Company
shall mean the common stock, par value $0.01 per share, of the Company or any
other shares of capital stock of the Company into which such stock shall be
reclassified or changed. "Common Stock" when used with reference to any Person
other than the Company organized in corporate form shall mean (i) the capital
stock or other equity interest of such Person with the greatest voting power,
(ii) the equity securities or other equity interest having power to control or
direct the management of such Person or (iii) if such Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person and which have issued any such outstanding capital
stock, equity securities or equity interest. "Common Stock" when used with
reference to any Person not organized in corporate form shall mean units of
beneficial interest which (x) shall represent the right to participate
generally in the profits and losses of such Person (including without
limitation any flow-through tax benefits resulting from an ownership interest
in such Person) and (y) shall be entitled to exercise the greatest voting power
of such Person or, in the case of a limited partnership, shall have the power
to remove or otherwise replace the general partner or partners.
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(h) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(i) "Depositary Agent" shall have the meaning set forth
in Section 7(c) hereof.
(j) "Distribution Date" shall have the meaning defined in
Section 3(a) hereof.
(k) "Exempt Person" shall have the meaning set forth in
the definition of "Acquiring Person."
(l) "Exercise Price" shall have the meaning defined in
Section 4(a) hereof.
(m) "Expiration Date" and "Final Expiration Date" shall
have the meanings set forth in Section 7(a) hereof.
(n) "Fair Market Value" of any securities or other
property shall be as determined in accordance with Section 11(d) hereof.
(o) "Grandfathered Percentage" shall mean, with respect
to any Grandfathered Person, the percentage of the outstanding shares of Common
Stock that such Grandfathered Person, together with all Affiliates and
Associates of such Grandfathered Person, beneficially owns as of the
Grandfathered Time plus an additional 1%; provided, however, that, in the event
any Grandfathered Person shall sell, transfer, or otherwise dispose of any
outstanding shares of Common Stock after the Grandfathered Time, the
Grandfathered Percentage shall, subsequent to such sale, transfer or
disposition, mean, with respect to such Grandfathered Person, the lesser of (i)
the Grandfathered Percentage as in effect immediately prior to such sale,
transfer or disposition or (ii) the percentage of outstanding shares of Common
Stock that such Grandfathered Person beneficially owns immediately following
such sale, transfer or disposition plus an additional 1%.
(p) "Grandfathered Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Person, is, as of
the Grandfathered Time, the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding.
(q) "Grandfathered Time" shall mean 5:00 P.M., New York,
New York time, on December 14, 1998.
(r) "Group" shall have the meaning set forth in clause
(b) of the definition of "Person."
(s) "Person" shall mean (a) an individual, a corporation,
a partnership, an
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association, a joint stock company, a trust, a business trust, a government or
political subdivision, any unincorporated organization, or any other
association or entity, and (b) a "group" as that term is used for purposes of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
(t) "Preferred Stock" shall mean shares of Series A
Junior Participating Cumulative Preferred Stock, par value $0.01 per share, of
the Company having the rights and preferences set forth in the form of Articles
Supplementary attached hereto as Exhibit A.
(u) "Preferred Stock Equivalents" shall have the meaning
set forth in Section 11(b) hereof.
(v) "Principal Party" shall have the meaning defined in
Section 13(b) hereof.
(w) "Redemption Price" shall have the meaning defined in
Section 23 hereof.
(x) "Registered Common Stock" shall have the meaning set
forth in Section 13(b) hereof.
(y) "Right Certificates" shall have the meaning set forth
in Section 3(a) hereof.
(z) "Section 11(a)(ii) Event" shall have the meaning
defined in Section 11(a)(ii) hereof.
(aa) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(bb) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(cc) "Section 24(a)(i) Exchange Ratio" shall have the
meaning set forth in Section 24(a)(i) hereof.
(dd) "Section 24(a)(ii) Exchange Ratio" shall have the
meaning set forth in Section 24(a)(ii) hereof.
(ee) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ff) "Stock Acquisition Date" shall mean the date of the
first public announcement (which for purposes of this definition shall include,
without limitation, the issuance of a press release or the filing of a
publicly-available report or other document with the Securities and Exchange
Commission or any other governmental agency) by the Company,
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acting pursuant to a resolution adopted by the Board of Directors of the
Company, or an Acquiring Person that an Acquiring Person has become such.
(gg) "Subsidiary" shall mean, with reference to any
Person, any corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient, in the absence of
contingencies, to elect a majority of the board of directors or other persons
performing similar functions of such corporation or other entity are at the
time directly or indirectly beneficially owned or otherwise controlled by such
Person either alone or together with one or more Affiliates of such Person.
(hh) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(ii) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section
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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 (as hereinafter defined in Section 3(a)) also be the holders
of the Common Stock of the Company) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable. In the event the Company appoints one or more Co-Rights Agents, the
respective duties of the Rights Agent and any Co-Rights Agents shall be as the
Company shall determine. The Company shall give notice to the Rights Agent of
the appointment of one or more Co-Rights Agents and the respective duties of
the Rights Agent and any such Co-Rights Agents.
Section 3. Issue of Right Certificates.
(a) From the date hereof until the earlier of (i) the
Close of Business on the tenth calendar day after the Stock Acquisition Date or
(ii) the Close of Business on the tenth Business Day (or such later calendar
day, if any, as the Board of Directors of the Company may determine in its sole
discretion) after the date a tender or exchange offer by any Person, other than
an Exempt Person, is first published or sent or given within the meaning of
Rule 14d-4(a) of the Exchange Act, or any successor rule, if, upon consummation
thereof, such Person would be the Beneficial Owner of 15% (or in the case of a
Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person) or more of the shares of Common Stock of the Company then
outstanding (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"), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for the Common Stock of the Company registered in the names of the
holders of the Common Stock of the Company (which certificates for Common Stock
of the Company shall be deemed also to be certificates for
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Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock of the Company. As soon as practicable after the Distribution
Date, the Rights Agent will, at the Company's expense send, by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock of the
Company 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 B hereto (the "Right Certificates"),
evidencing one Right for each share of Common Stock of the Company so held,
subject to adjustment as provided herein. In the event that an adjustment in
the number of Rights per share of Common Stock of the Company has been made
pursuant to Section 11(o) hereof, the Company may make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a) hereof) at
the time of distribution of the Right Certificates, so that Right Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of and after the Close of Business on the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) With respect to certificates for the Common Stock of
the Company issued prior to the Close of Business on the Record Date, the
Rights will be evidenced by such certificates for the Common Stock of the
Company on or until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), and the registered holders of the
Common Stock of the Company also shall be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), the transfer of any of the
certificates for the Common Stock of the Company outstanding prior to the date
of this Agreement shall also constitute the transfer of the Rights associated
with the Common Stock of the Company represented by such certificate.
(c) As promptly as practicable following the Record Date,
the Company will send a copy of a summary of the Rights, in a form which may be
appended to certificates that represent shares of Common Stock of the Company,
in substantially the form attached hereto as Exhibit C, to each record holder
of shares of Common Stock of the Company as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company.
(d) Certificates for the Common Stock of the Company
issued after the Record Date, but prior to the earlier of the Distribution Date
or the redemption, expiration or termination of the Rights, shall be deemed
also to be certificates for Rights, and shall bear a legend, substantially in
the form set forth below:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Shareholder
Rights Agreement between Summit Properties Inc. and
First Union National Bank, as Rights Agent, dated as of
December 14, 1998, as amended, restated, renewed or
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extended 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 Summit Properties Inc. and the
stock transfer administration office of the Rights
Agent. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced
by this certificate. Summit Properties Inc. may
redeem the Rights at a redemption price of $0.01 per
Right, subject to adjustment, under the terms of the
Rights Agreement. Summit Properties Inc. 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 or held by 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. The Rights shall not
be exercisable, and shall be void so long as held, by
a holder in any jurisdiction where the requisite
qualification, if any, to the issuance to such holder,
or the exercise by such holder, of the Rights in such
jurisdiction shall not have been obtained or be
obtainable.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock of the Company represented by such
certificates shall be evidenced by such certificates alone until the
Distribution Date (or the earlier redemption, expiration or termination of the
Rights), and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock of the Company
represented by such certificates. In the event that the Company purchases or
acquires any shares of Common Stock of the Company after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Stock of
the Company 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
of the Company which are no longer outstanding. The failure to print the
foregoing legend on any such certificate representing Common Stock of the
Company or any defect therein shall not affect in any manner whatsoever the
application or interpretation of the provisions of Section 7(e) hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, in the event that prior to the earlier of the Distribution Date or
the redemption, expiration or termination of the Rights, any shares of Common
Stock of the Company are retired and canceled in connection with the conversion
of such shares to Excess Stock pursuant to Article III of the
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Company's Amended and Restated Articles of Incorporation, as amended, then the
associated Rights shall be deemed to be similarly retired and canceled.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment and certificate to be printed on the reverse
thereof) shall each be substantially in the form of Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this 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 customary usage. The Right Certificates shall be in a
machine printable format and in a form reasonably satisfactory to the Rights
Agent. Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record Date, shall
show the date of countersignature, and on their face shall entitle the holders
thereof to purchase such number of one one-thousandths of a share of Preferred
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 of any Associate or Affiliate of an
Acquiring Person) 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
(whether or not in writing) regarding the transferred Rights, the shares of
Common Stock of the Company associated with such Rights or the Company 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 Section 7(e) hereof, and any Right Certificate issued pursuant
to Section 6, Section 11 or Section 22 upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
have deleted therefrom the second sentence of the existing legend on such Right
Certificate and in substitution therefor shall contain the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
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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
7(e) of the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after it becomes
aware of the existence and identity of any Acquiring Person or any Associate or
Affiliate thereof. The Company shall instruct the Rights Agent in writing of
the Rights which should be so legended. The failure to print the foregoing
legend on any such Right Certificate or any defect therein shall not affect in
any manner whatsoever the application or interpretation of the provisions of
Section 7(e) hereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of
the Company by its Chairman of the Board of Directors, or its President or any
Vice President and by its Treasurer or any Assistant Treasurer, or by its
Secretary or any Assistant Secretary, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested to by the Secretary or any Assistant Secretary
of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by an authorized signatory of the
Rights Agent and shall not be valid for any purpose unless so countersigned,
and such countersignature upon any Right Certificate shall be conclusive
evidence, and the only evidence, that such Right Certificate has been duly
countersigned as required hereunder. 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 an authorized signatory of 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.
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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
7(e) 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 Expiration
Date, any Right Certificate or Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Certificates, entitling
the registered holder to purchase a like number of one one-thousandths of a
share of Preferred Stock (or following a Triggering Event, preferred stock,
cash, property, debt securities, Common Stock of the Company or any combination
thereof) as the Right Certificate or Certificates surrendered then entitled
such holder to purchase and at the same Exercise Price. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or 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 7(e) 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 by the registered
holder of a Right Certificate, 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; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder
of any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office or offices of the Rights Agent
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designated for such purpose, together with payment of the aggregate Exercise
Price for the total number of one one-thousandths of a share of Preferred 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 the tenth anniversary of the date of this Agreement
(the "Final Expiration Date"), (ii) the time at which the Rights are redeemed
as provided in Section 23 hereof or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof (the earlier of (i), (ii) or (iii)
being herein referred to as the "Expiration Date"). Except as set forth in
Section 7(e) 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 of the Company 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 of the Company in accordance with the provisions of this
Agreement, as of the date such Person becomes a record holder of shares of
Common Stock of the Company.
(b) The Exercise Price for each one one-thousandth of a
share of Preferred Stock pursuant to the exercise of a Right shall initially be
$45.00, shall be subject to adjustment from time to time as 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) As promptly as practicable following the Distribution
Date, the Company shall deposit with a corporation, trust, bank or similar
institution in good standing organized under the laws of the United States or
any State of the United States, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by a federal or state authority (such institution is hereinafter
referred to as the "Depositary Agent"), certificates representing the shares of
Preferred Stock that may be acquired upon exercise of the Rights and the
Company shall cause such Depositary Agent to enter into an agreement pursuant
to which the Depositary Agent shall issue receipts representing interests in
the shares of Preferred Stock so deposited. Upon receipt of a 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 to be purchased and an amount equal to any
applicable transfer tax (as determined by the Rights Agent) by certified check
or bank draft payable to the order of the Company or by money order, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
requisition from the Depositary Agent (or make available, if the Rights Agent
is the Depositary Agent) depositary receipts or certificates for the number of
one one-thousandths of a share of Preferred Stock to be purchased and the
Company hereby irrevocably authorizes the Depositary Agent to comply with all
such requests, (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 depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (iv) when
appropriate, after
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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 (including Common Stock) 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. The payment of the Exercise Price may be made by certified or bank
check payable to the order of the Company, or by money order or wire transfer
of immediately available funds to the account of the Company (provided that
notice of such wire transfer shall be given by the holder of the related Right
to the Rights Agent).
(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, from and after the first occurrence of a Section 11(a)(ii) Event or
Section 13 Event, any Rights beneficially owned by (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any Associate or Affiliate of an Acquiring Person) who
becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person (or of any Associate or Affiliate of an
Acquiring Person) 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, the shares of Common Stock of the Company
associated with such Rights or the Company, or (B) a transfer which the Board
of Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall be null and void without any further action and no holder
of such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or any Affiliates or
Associates of an Acquiring Person or any transferee of any of them hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of 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
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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.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the 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.
Section 9. Reservation and Availability of Preferred 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
Preferred Stock or any authorized and issued shares of Preferred Stock held in
its treasury, the number of shares of Preferred Stock that will be sufficient
to permit the exercise in full of all outstanding and exercisable Rights. Upon
the occurrence of any events resulting in an increase in the aggregate number
of shares of Preferred Stock issuable upon exercise of all outstanding Rights
in excess of the number then reserved, the Company shall make appropriate
increases in the number of shares so reserved.
(b) The Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares of Preferred
Stock issued or reserved for issuance to be listed, upon official notice of
issuance, upon the principal national securities exchange, if any, upon which
the Common Stock of the Company is listed or, if the principal market for the
Common Stock of the Company is not on any national securities exchange, to be
eligible for quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or any successor thereto or other
comparable quotation system.
(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 on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, 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
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
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requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities or (B) the
Expiration Date. 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 determined in accordance with the provisions 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,
in each case with prompt written notice to the Rights Agent. 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 may be necessary to ensure that all shares of Preferred
Stock delivered upon the exercise of the Rights shall, at the time of delivery
of the certificates or depositary receipts 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 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 Preferred Stock 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. Preferred Stock Record Date. Each Person in whose name any
certificate for Preferred Stock (including any fraction of a share of Preferred
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 Preferred 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 Preferred 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
Preferred Stock transfer books of the Company are open; and
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further provided, however, that if delivery of shares of Preferred Stock is
delayed pursuant to Section 9(c), such Person shall be deemed to have become
the record holder of such shares of Preferred Stock only when such shares first
become deliverable. 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 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 Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares
or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, 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
capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when
the Preferred Stock transfer books of the Company were open,
such holder 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 a Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of a
Right. If an event occurs which would require an adjustment
under both Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 24 hereof,
in the event any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person
(a "Section 11(a)(ii) Event"), then promptly following any
such occurrence, proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have a right to
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receive, upon exercise thereof at the then current Exercise
Price in accordance with the terms of this Agreement, such
number of shares of Preferred Stock of the Company as shall
equal the result obtained by (x) multiplying the then current
Exercise Price by the then number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section
11(a)(ii) Event, whether or not such Right was then
exercisable, and dividing that product by (y) 50% of the Fair
Market Value per one one-thousandth of a share of the
Preferred Stock (determined pursuant to Section 11(d)) on the
date of the occurrence of a Section 11(a)(ii) Event (such
number of shares being referred to as the "Adjustment
Shares").
(iii) In lieu of issuing any shares of Preferred
Stock in accordance with Section 11(a)(ii) hereof, the
Company, acting by or pursuant to a resolution of the Board
of Directors of the Company, may, and in the event that the
number of shares of Preferred Stock which are authorized by
the Company's Articles of Incorporation 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 the
foregoing subparagraph (ii) of this Section 11(a), the
Company, acting by or pursuant to a resolution of the Board
of Directors of the Company, shall: (A) determine the excess
of (X) the Fair Market Value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value")
over (Y) the Exercise Price attributable to each Right (such
excess being referred to as the "Spread") and (B) with
respect to all or a portion of each Right (subject to Section
7(e) hereof), 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)
Preferred Stock Equivalents which the Board of Directors of
the Company has deemed to have the same value as shares of
Common Stock of the Company, (4) debt securities of the
Company, (5) other assets of the Company or (6) any
combination of the foregoing which, when added to any shares
of Preferred Stock issued upon such exercise, has an
aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of
Directors of the Company; provided, however, that if the
Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right
of redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated
to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Exercise Price, shares of
Preferred Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If the Board of
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Directors of the Company shall determine in good faith that
it is likely that sufficient additional shares of Preferred
Stock could be authorized for issuance upon exercise in full
of the Rights, the 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) Trigger Date, in order
that the Company may seek stockholder approval for the
authorization of such additional shares (such period, as it
may be extended, being referred to herein as the
"Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to
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 and a public
announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of
the Preferred Stock shall be the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per share of the
Preferred Stock on the Section 11(a)(ii) Trigger Date and the
value of any Preferred Stock Equivalent shall be deemed to
have the same value as the Preferred Stock on such date.
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within forty-five (45) calendar days
after such record date) to subscribe for or purchase Preferred Stock (or
securities having the same or more favorable rights, privileges and preferences
as the shares of Preferred Stock ("Preferred Stock Equivalents")) or securities
convertible into Preferred Stock or Preferred Stock Equivalents at a price per
share of Preferred Stock or per share of Preferred Stock Equivalents (or having
a conversion price per share, if a security convertible into Preferred Stock or
Preferred Stock Equivalents) less than the Fair Market Value (as determined
pursuant to Section 11(d) hereof) per share of Preferred 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 Preferred Stock outstanding on such record date, plus the number of
shares of Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or Preferred Stock Equivalents to be
offered (and the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Fair Market Value and the
denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of
Preferred Stock and Preferred Stock Equivalents 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
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exercise of a Right be less than the aggregate par value of the shares of stock
of the Company issuable upon exercise of a Right. In case such subscription
price may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be the Fair Market Value
thereof determined in accordance with Section 11(d) hereof. Shares of Preferred
Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such 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 Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend out of the
earnings or retained earnings of the Company), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in stock other
than Preferred Stock) or convertible securities, 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 Fair Market Value (as determined pursuant
to Section 11(d) hereof) per one one-thousandth of a share of Preferred Stock
on such record date, less the Fair Market Value (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 convertible securities,
subscription rights or warrants applicable to one one-thousandth of a share of
Preferred Stock and the denominator of which shall be the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per one one-thousandth of a share
of Preferred Stock; provided, however, that in no event shall the consideration
to be paid upon the exercise of a Right be less than the aggregate par value of
the shares of stock of the Company issuable upon exercise of a Right. Such
adjustments shall be made successively whenever such a record date is fixed;
and in the event that such distribution is not so made, the 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 "Fair Market
Value" of any share of Preferred Stock, 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, the Fair Market Value on any date shall be
deemed to be the average of the daily closing prices per
share of such stock or per unit of such other security for
the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however,
that in the event that the Fair Market Value per share of
any share of stock is determined during a period following
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the announcement by the issuer of such stock of (x) a
dividend or distribution on such stock payable in shares of
such stock or securities convertible into shares of such
stock or (y) any subdivision, combination or reclassification
of such stock, and prior to the expiration of the 30 Trading
Day period 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 Fair Market Value shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the 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 Fair Market Value 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, provided, however, that if at the time of such
determination there is an Acquiring Person, the Fair Market
Value of such security on such date shall be determined by a
nationally recognized investment banking firm selected by the
Board of Directors of the Company, 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, "Fair Market Value" 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, provided, however, that if at the time of such
determination there is an Acquiring Person, the Fair Market
Value of such security on such date shall be determined by a
nationally recognized investment banking firm selected by the
Board of Directors of the
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Company, 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; provided,
however, that for the purposes of making any adjustment
provided for by Section 11(a)(ii) hereof, the Fair Market
Value of a share of Preferred Stock shall not be less than
the product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend
Multiple or Vote Multiple (as both of such terms are defined
in the Articles Supplementary attached as Exhibit A hereto)
applicable to the Preferred Stock and shall not exceed 105%
of the product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend
Multiple or Vote Multiple applicable to the Preferred Stock.
(iii) In the case of property other than
securities, the Fair Market Value thereof shall be determined
reasonably and with utmost good faith to the holders of
Rights by the Board of Directors of the Company, provided,
however, that if at the time of such determination there is
an Acquiring Person, the Fair Market Value of such property
on such date shall be determined by a nationally recognized
investment banking firm selected by the Board of Directors of
the Company, 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 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 hundred-thousandth of a share of Common
Stock of the Company or ten-millionth of a share of Preferred Stock, as the
case may be, or to such other figure as the Board of Directors of the Company
may deem appropriate. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which mandates
such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Section 11(a), (b), (c), (d), (e),
(g) through (k) and (m), inclusive, and the provisions of Sections 7, 9, 10, 13
and 14 hereof with respect to the Preferred Stock shall apply on like terms to
any such other shares.
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(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Exercise Price hereunder shall
evidence the right to purchase, at the adjusted Exercise Price, the number of
one one-thousandths of a share of Preferred Stock (or other securities or
amount of cash or combination thereof) 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
one one-thousandths of a share of Preferred Stock (calculated to the nearest
one ten-millionth) as the Board of Directors of the Company determines is
appropriate to preserve the economic value of the Rights, including, by way of
example, that number obtained by (i) multiplying (x) the number of one
one-thousandths of a share of Preferred Stock for which a Right may be
exercisable 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 Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest hundred-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 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
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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 one one-thousandths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Right Certificates
theretofore 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 without prejudice to any adjustment or change.
(k) Before taking any action that would cause an
adjustment reducing the Exercise Price below the then stated value, if any, of
the number of one one-thousandths of a share of Preferred 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 Preferred
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 one one-thousandths of a share of Preferred Stock or other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of one one-thousandths of a share of Preferred 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 in its good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Stock, issuance wholly for cash
of any shares of Preferred Stock at less than the Fair Market Value, issuance
wholly for cash of shares of Preferred Stock or securities which by their terms
are convertible into or exchangeable for shares of Preferred 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 Preferred
Stock, shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date and so long as the Rights have not been
redeemed pursuant to Section 23 hereof or exchanged pursuant to Section 24
hereof, (i) consolidate with (other than a
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Subsidiary of the Company in a transaction which complies with the proviso at
the end of this sentence), (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 (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with the
proviso at the end of this sentence) 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; provided,
however, that this Section 11(n) shall not affect the ability of any Subsidiary
of the Company to consolidate with, or merge with or into, or sell or transfer
assets or earning power to, any other Subsidiary of the Company. The Company
further 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.
(o) Notwithstanding anything in this Agreement to the
contrary, in the event the Company shall at any time after the date of this
Agreement and prior to the Distribution Date (i) declare or pay any dividend on
the outstanding Common Stock of the Company payable in shares of Common Stock
of the Company or (ii) effect a subdivision, combination or consolidation of
the outstanding shares of Common Stock of the Company (by reclassification or
otherwise than by payment of dividends in shares of Common Stock of the
Company) into a greater or lesser number of shares of Common Stock of the
Company, then in any such case (A) the number of one one-thousandths of a share
of Preferred Stock purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one one-thousandths of a
share of Preferred Stock so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of shares of Common Stock of the
Company outstanding immediately prior to such event and the denominator of
which is the number of shares of Common Stock of the Company outstanding
immediately after such event, and (B) each share of Common Stock of the Company
outstanding immediately after such event shall have issued with respect to it
that number of Rights which each share of Common Stock of the Company
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(o) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
(p) The exercise of Rights under Section 11(a)(ii) shall
only result in the loss of rights under Section 11(a)(ii) to the extent so
exercised and shall not otherwise affect the
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rights of holders of Right Certificates under this Rights Agreement, including
rights to purchase securities of the Principal Party following a Section 13
Event which has occurred or may thereafter occur, as set forth in Section 13
hereof. Upon exercise of a Right Certificate under Section 11(a)(ii), the
Rights Agent shall return such Right Certificate duly marked to indicate that
such exercise has occurred.
Section 12. Certificate of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock of the Company a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate (or,
if prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock of the Company) in accordance with Section 26 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, following the Stock 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 the proviso at the end of the first sentence of
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 of the Company 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 the proviso at the end of the first sentence of
Section 11(n) hereof), then, and in each such case, proper provision shall be
made so that: (i) each holder of a Right, except as provided in Section 7(e)
hereof, shall 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, transfer restrictions or other adverse claims, as shall be equal
to the result obtained by (1)
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multiplying the then current Exercise Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event, and dividing
that product by (2) 50% of the Fair Market Value (determined pursuant to
Section 11(d) hereof) per share 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, mortgage 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) and the making of payments in cash and/or
other securities in accordance with Section 11(a)(iii) hereof) 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.
(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, or, if
there is more than one such issuer, the issuer of Common Stock that
has the highest aggregate Fair Market Value (determined pursuant to
Section 11(d)), and if no securities are so issued, the Person that is
the other party to the merger or consolidation, or, if there is more
than one such Person, the Person the Common Stock of which has the
highest aggregate Fair Market Value (determined pursuant to Section
11(d)); 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, or, if
each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power transferred
pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the highest
aggregate Fair Market Value (determined pursuant to Section 11(d));
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act ("Registered
Common Stock"), or such Person is not a corporation, and such Person is a
direct or indirect Subsidiary or Affiliate of another Person who has Registered
Common Stock outstanding, "Principal Party" shall refer to such other
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Person; (2) if the Common Stock of such Person is not Registered Common Stock
or such Person is not a corporation, and such Person is a direct or indirect
Subsidiary of another Person but is not a direct or indirect Subsidiary of
another Person which has Registered Common Stock outstanding, "Principal Party"
shall refer to the ultimate parent entity of such first-mentioned Person; (3)
if the Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and one or more of such other Persons has
Registered Common Stock outstanding, "Principal Party" shall refer to whichever
of such other Persons is the issuer of the Registered Common Stock having the
highest aggregate Fair Market Value (determined pursuant to Section 11(d)); and
(4) if the Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and none of such other Persons has
Registered Common Stock outstanding, "Principal Party" shall refer to whichever
ultimate parent entity is the corporation having the greatest stockholders'
equity or, if no such ultimate parent entity is a corporation, "Principal
Party" shall refer to whichever ultimate parent entity is the entity having the
greatest net assets.
(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, cause
such registration statement to become effective as soon as practicable
after such filing and cause such registration statement to remain
effective (with a prospectus that at all times meets the requirements
of the Securities Act) until the Expiration Date;
(ii) 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) 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
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(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) In case the Principal Party which is to be a party to
a transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or
other instrument governing its affairs, which provision would have the effect
of (i) causing such Principal Party to issue (other than to holders of Rights
pursuant to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then current Fair Market Value
(determined pursuant to Section 11(d)) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less than such Fair
Market Value, or (ii) providing for any special payment, tax or similar
provisions in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of this Section 13, then, in such
event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived or amended,
or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in Section 11(o)
hereof, or to distribute Right Certificates which evidence fractional Rights.
If the Company elects not to issue such fractional Rights, the Company shall
pay, in lieu of such fractional Rights, 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 Fair Market Value
of a whole Right, as determined pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions
of shares of Preferred Stock (other than fractions which are integral multiples
of one one-thousandth of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-thousandth of a
share of Preferred Stock, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the
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Fair Market Value of one one-thousandth of a share of Preferred Stock. For
purposes of this Section 14(b), the Fair Market Value of one one-thousandth of
a share of Preferred Stock shall be 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 rights of action vested in the Rights Agent pursuant to
Sections 18 and 20 hereof, are vested in the respective registered holders of
the Right Certificates (or, prior to the Distribution Date, the registered
holders of the Common Stock of the Company); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the Common Stock of
the Company), 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 of the Company), may, in such registered holder's own behalf and for such
registered holder's 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 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 of the Company;
(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(a) and 7(f), 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 associated certificate
representing Common Stock of the Company) is registered as
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the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificates or the
associated certificate representing Common Stock of the Company made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and,
subject to the last sentence of Section 7(e), 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
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 Preferred
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 such
compensation as shall be agreed to in writing between the Company and the Rights
Agent 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, its directors,
officers, employees and agents for, and to hold each of them harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent or such other indemnified party in connection with the
acceptance and administration of this Agreement, or the performance of the
Rights Agent's duties hereunder, including the costs and expenses of defending
against any claim of liability arising therefrom, directly or indirectly. The
provisions of this Section 18(a) shall survive the expiration of the Rights and
the termination of this Agreement.
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(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 or the performance of the
Rights Agent's duties hereunder in reliance upon any Right Certificate or
certificate representing Common Stock of the Company, Preferred Stock, or other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it in good faith
to be genuine and to be signed and executed by the proper Person or Persons.
(c) The Rights Agent shall not be liable for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
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 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 expressly 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:
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(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and the advice or
opinion of such counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
and the determination of "Fair Market Value") 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 shall be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by a person believed by the Rights Agent to be the Chairman
of the Board of Directors, a Vice Chairman of the Board of Directors, the
President, a Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company and delivered to the Rights
Agent. Any such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this 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 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 7(e) hereof) or any adjustment required under the provisions of
Sections 11, 13 or 23(c) 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 the Fair Market Value of the Rights or Preferred 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
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reservation of any shares of Common Stock of the Company or Preferred Stock to
be issued pursuant to this Agreement or any Right Certificate or as to whether
any shares of Common Stock of the Company or Preferred Stock will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all 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 person
believed by the Rights Agent to be the Chairman of the Board of Directors, any
Vice Chairman of the Board of Directors, the President, a Vice President, the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer 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 or for any delay in acting while awaiting
instructions. 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 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 receives such application, unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the 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 hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct as long as the Rights Agent was not grossly
negligent in the selection thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend
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or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate 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 by first class
mail. The Company may remove the Rights Agent or any successor Rights Agent
(with or without cause), effective immediately or on a specified date, by
written notice given to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock of the Company and
Preferred Stock, and by giving notice to the holders of the Right Certificates
by any means reasonably determined by the Company to inform such holders of
such removal (including, without limitation, by including such information in
one or more of the Company's reports to shareholders or reports or filings with
the Securities and Exchange Commission). If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (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 New York (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 New York), in good standing, which is authorized under such laws to
exercise stock transfer 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
$100,000,000 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
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Rights Agent and each transfer agent of the Common Stock of the Company and the
Preferred 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 the Board of Directors of the Company to reflect any
adjustment or change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock of
the Company 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 of the Company so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities 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 be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate 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, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, appropriately adjusted to reflect any
dividend declared or paid on the Common Stock of the Company in shares of
Common Stock of the Company or any subdivision or combination of the
outstanding shares of Common Stock of the Company or similar event occurring
after the date of this Agreement (such redemption price, as adjusted from time
to time, being hereinafter referred to as the "Redemption Price"). The Rights
may be redeemed only until the earliest to occur of (i) the time at which any
Person becomes an Acquiring Person or (ii) the Final Expiration Date.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights in accordance with Section
23 hereof, 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 of the Company
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ordering the redemption of the Rights, in accordance with Section 23 hereof,
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 of the Company. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. The Company promptly shall mail
a notice of any such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other than
that specifically set forth in this Section 23 or Section 24 hereof or in
connection with the purchase of shares of Common Stock of the Company prior to
the Distribution Date.
(c) The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock of the Company (based on the Fair Market
Value of the Common Stock of the Company as of the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors of the
Company.
Section 24. Exchange.
(a) (i) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock of the Company at an
exchange ratio of one share of Common Stock of the Company
per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the
date hereof (such exchange ratio being hereinafter referred
to as the "Section 24(a)(i) Exchange Ratio"). Notwithstanding
the foregoing, the Board of Directors of the Company shall
not be empowered to effect such exchange at any time after
any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock of the
Company.
(ii) Notwithstanding the foregoing, the Board of
Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or
part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to
the provisions of Section 7(e) hereof) for shares of Common
Stock of the Company at an exchange ratio specified in the
following sentence, as appropriately adjusted to
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reflect any stock split, stock dividend or similar
transaction occurring after the date of this Agreement.
Subject to the adjustment described in the foregoing
sentence, each Right may be exchanged for that number of
shares of Common Stock of the Company obtained by dividing
the Spread (as defined in Section 11(a)(iii)) by the then
Fair Market Value per one one-thousandth of a share of
Preferred Stock on the earlier of (x) the date on which any
person becomes an Acquiring Person or (y) the date on which a
tender or exchange offer by any Person (other than an Exempt
Person) is first published or sent or given within the
meaning of Rule 14d-4(a) of the Exchange Act or any successor
rule, if upon consummation thereof such Person would be the
Beneficial Owner of 15% or more of the shares of Common Stock
of the Company then outstanding (such exchange ratio being
referred to herein as the "Section 24(a)(ii) Exchange
Ratio"). Notwithstanding the foregoing, the Board of
Directors of the Company shall not be empowered to effect
such exchange at any time after any Person (other than an
Exempt Person), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more
of the Common Stock of the Company.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to subsection (a)
of this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of shares of Common
Stock of the Company equal to the number of such Rights held by such holder
multiplied by the Section 24(a)(i) Exchange Ratio or the Section 24(a)(ii)
Exchange Ratio, as applicable. The Company shall promptly give notice of any
such exchange in accordance with Section 26 hereof and shall mail a notice of
any such exchange to all of the holders of such Rights at their last addresses
as they appear upon the registry books of the Rights Agent; provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
shares of Common Stock of the Company for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or Preferred Stock
Equivalent, as such term is defined in Section 11(b) hereof) for Common Stock
of the Company exchangeable for Rights, at the initial rate of one
one-thousandth of a share of Preferred Stock (or Preferred Stock Equivalents)
for each share of Common Stock of the Company, as appropriately adjusted to
reflect adjustments in the voting rights of the Preferred Stock pursuant to the
terms thereof, so that the fraction of a share of Preferred Stock delivered in
lieu of each share of Common
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Stock of the Company shall have the same voting rights as one share of Common
Stock of the Company.
(d) In the event that there shall not be sufficient
shares of Common Stock of the Company or Preferred Stock (or Preferred Stock
Equivalent) issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock of the Company or Preferred Stock (or Preferred Stock
Equivalent) for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions
of Common Stock of the Company or to distribute certificates which evidence
fractional shares of Common Stock of the Company. If the Company elects not to
issue such fractional shares of Common Stock of the Company, the Company shall
pay, in lieu of such fractional shares of Common Stock of the Company, to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock of the Company would otherwise be issuable,
an amount in cash equal to the same fraction of the Fair Market Value of a
whole share of Common Stock of the Company. For the purposes of this paragraph
(e), the Fair Market Value of a whole share of Common Stock of the Company
shall be the closing price of a share of Common Stock of the Company (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the holders
of Preferred Stock (other than a regular periodic cash dividend out of earnings
or retained earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred 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 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 the proviso at the end of the first sentence of Section 11(n)
hereof), (v) to effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Common Stock of the
Company payable in Common Stock of the Company or to effect a subdivision,
combination or consolidation of the Common Stock of the Company (by
reclassification or otherwise than by payment of dividends in Common Stock of
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the Company) then in each such case, the Company shall give to each holder of a
Right Certificate and to the Rights Agent, 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 of the
Company and/or Preferred Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least twenty (20) days prior to the record date for determining
holders of the shares of Preferred Stock for purposes of such action, and in
the case of any such other action, at least twenty (20) days prior to the date
of the taking of such proposed action or the date of participation therein by
the holders of the shares of Common Stock of the Company and/or Preferred
Stock, whichever shall be the earlier; provided, however, no such notice shall
be required pursuant to this Section 25 if any Subsidiary of the Company
effects a consolidation or merger with or into, or effects a sale or other
transfer of assets or earnings power to, any other Subsidiary of the Company in
a manner not inconsistent with the provisions of this Agreement.
(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 Certificate and to the Rights Agent,
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, facsimile transmission or by nationally recognized
overnight courier addressed (until another address is filed in writing with the
Rights Agent) as follows:
Summit Properties Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: General Counsel
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, by facsimile transmission or by
nationally-recognized overnight courier addressed (until another address is
filed in writing with the Company) as follows:
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First Union National Bank
0000 Xxxx X.X. Xxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Shareholder Services Group
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior
to the Distribution Date, to the holder of any certificate representing shares
of Common Stock of the Company) 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.
Section 27. Supplements and Amendments. Prior to the time at which any
Person becomes an Acquiring Person, the Company may, and the Rights Agent shall,
if the Company so directs, supplement or amend any provision of this Agreement
as the Board of Directors of the Company may deem necessary or desirable without
the approval of any holders of certificates representing shares of Common Stock
of the Company. From and after the time at which any Person becomes an Acquiring
Person, the Company may, 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 hereof in any manner which the
Board of Directors of the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or any Affiliate or Associate of an Acquiring
Person); provided, however, that from and after the time at which any Person
becomes an Acquiring Person, this Agreement may not be supplemented or amended
to lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and the benefits
to, the holders of Rights (other than an Acquiring Person or any Affiliate or
Associate of an Acquiring Person). 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 threshold set forth in Section 1(a) to not
less than the greater of (i) the sum of .001% and the largest percentage of the
outstanding Common Stock of the Company then known by the Company to be
beneficially owned by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Stock of the Company for or pursuant to
the terms of any such plan) 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. Prior to the time at
which any Person becomes an Acquiring Person, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock of the Company. Notwithstanding any other provision hereof, the Rights
Agent's consent must be obtained regarding any amendment or supplement pursuant
to this Section 27 which alters the Rights Agent's rights or duties.
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Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock of the Company outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of the Company 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
Rules under the Exchange Act as in effect on the date hereof. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including without
limitation, the right and power 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 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 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 of the Company) 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 of the Company).
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 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
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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 Maryland and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and to be performed entirely within Maryland.
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 Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as an instrument under seal and attested, all as of the day and
year first above written.
ATTEST: SUMMIT PROPERTIES INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
and General Counsel
ATTEST: FIRST UNION NATIONAL BANK,
as Rights Agent
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
48
EXHIBIT A
FORM OF
ARTICLES SUPPLEMENTARY
CLASSIFYING AND DESIGNATING A SERIES OF PREFERRED STOCK
AS
SERIES A JUNIOR PARTICIPATING CUMULATIVE PREFERRED STOCK
OF
SUMMIT PROPERTIES INC.
Pursuant to Section 2-201 of the General Corporation Law
of the State of Maryland
We, Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, being the Senior Vice
President and the Assistant Secretary, respectively, of SUMMIT PROPERTIES INC.,
a corporation organized and existing under the General Corporation Law of the
State of Maryland (the "Corporation"), in accordance with the provisions of
Section 1-301 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Amended and Restated Articles of Incorporation of the Corporation, on
December 14, 1998 the Board of Directors adopted the following resolution
creating a series of 350,000 shares of Preferred Stock designated as "Series A
Junior Participating Cumulative Preferred Stock":
"RESOLVED, that pursuant to the authority vested in
the Board of Directors of the Corporation in accordance with
the provisions of its Amended and Restated Articles of
Incorporation, as amended, a series of Preferred Stock, par
value $.01 per share, of the Corporation be, and it hereby is,
created, with such voting powers, preferences and relative,
participating, optional or other special rights, and such
qualifications, limitations or restrictions thereof, as
follows:
Section 1. Designation and Amount. There shall be a series of Preferred
Stock of the Corporation which shall be designated as "Series A Junior
Participating Cumulative Preferred Stock," par value $.01 per share (hereinafter
called "Series A Preferred Stock"), and the number of shares constituting such
series shall be 350,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors and by the filing of articles supplementary
pursuant to the provisions of the General Corporation Law of the State of
49
Maryland stating that such increase or reduction has been so authorized;
provided, however, that no decrease shall reduce the number of shares of Series
A Preferred Stock to a number less than that of the shares then outstanding plus
the number of shares of Series A Preferred Stock issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
Section 2. Dividends and Distributions.
(A) (i) Subject to the rights of the holders of any shares of any
series of preferred stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of shares of common stock
and of any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provisions for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of common stock or a subdivision of the outstanding shares of
common stock (by reclassification or otherwise), declared on the common stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. The multiple of
cash and non-cash dividends declared on the common stock to which holders of the
Series A Preferred Stock are entitled, which shall be 1,000 initially but which
shall be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Dividend Multiple." In the event the Corporation shall at
any time after December 14, 1998 (the "Rights Declaration Date") (i) declare or
pay any dividend on common stock payable in shares of common stock, or (ii)
effect a subdivision or combination or consolidation of the outstanding shares
of common stock (by reclassification or otherwise than by payment of a dividend
in shares of common stock) into a greater or lesser number of shares of common
stock, then in each such case the Dividend Multiple thereafter applicable to the
determination of the amount of dividends which holders of shares of Series A
Preferred Stock shall be entitled to receive shall be the Dividend Multiple
applicable immediately prior to such event multiplied by a fraction, the
numerator of which is the number of shares of common stock outstanding
immediately after such event and the denominator of which is the number of
shares of common stock that were outstanding immediately prior to such event.
(ii) Notwithstanding anything else contained in this paragraph (A),
the Corporation shall, out of funds legally available for that purpose, declare
a
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dividend or distribution on the Series A Preferred Stock as provided in this
paragraph (A) immediately after it declares a dividend or distribution on the
shares of common stock (other than a dividend payable in shares of common
stock); provided that, in the event no dividend or distribution shall have been
declared on the shares of common stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Series A Preferred Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.
(B) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix in accordance with applicable law a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than such number of days prior to the date fixed for the
payment thereof as may be allowed by applicable law.
Section 3. Voting Rights. In addition to any other voting rights
required by law, the holders of shares of Series A Preferred Stock shall have
the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the Corporation.
The number of votes which a holder of a share of Series A Preferred Stock is
entitled to cast, which shall initially be 1,000 but which may be adjusted from
time to time as hereinafter provided, is hereinafter referred to as the "Vote
Multiple." In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare or pay any dividend on shares of common stock
payable in shares of common stock, or (ii) effect a subdivision or combination
or consolidation of the outstanding shares of common stock (by reclassification
or otherwise than by payment of a dividend in shares of common stock) into a
greater or lesser number of shares of common stock, then in each such case the
Vote Multiple thereafter applicable to the determination of the number of votes
per share to which holders of shares of Series A Preferred Stock shall be
entitled shall be the Vote Multiple immediately prior to such event multiplied
by a fraction, the numerator of which is the number of shares of common stock
outstanding immediately after such event and the denominator of which is the
number of shares of common stock that were outstanding immediately prior to such
event.
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(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of common stock and
the holders of shares of any other capital stock of this Corporation having
general voting rights, shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) Whenever, at any time or times, dividends payable on
any shares of Series A Preferred Stock shall be in arrears in an amount equal to
at least two full quarter dividends (whether or not declared and whether or not
consecutive), the holders of record of the outstanding shares of Series A
Preferred Stock shall have the exclusive right, voting separately as a single
class, to elect two directors of the Corporation at a special meeting of
shareholders of the Corporation or at the Corporation's next annual meeting of
shareholders, and at each subsequent annual meeting of shareholders, as provided
below. At elections for such directors, each Series A Preferred Share shall
entitle the holder thereof to 1,000 votes in such elections.
(ii) Upon the vesting of such right of the holders of
shares of Series A Preferred Stock, the maximum authorized number of members of
the Board of Directors shall automatically be increased by two and the two
vacancies so created shall be filled by vote of the holders of the outstanding
shares of Series A Preferred Stock as hereinafter set forth. A special meeting
of the shareholders of the Corporation then entitled to vote shall be called by
the Chairman of the Board of Directors or the President or the Secretary of the
Corporation, if requested in writing by the holders of record of not less than
15% of the shares of Series A Preferred Stock then outstanding. At such special
meeting, or, if no such special meeting shall have been called, then at the next
annual meeting of shareholders of the Corporation, the holders of the shares of
Series A Preferred Stock shall elect, voting as above provided, two directors of
the Corporation to fill the aforesaid vacancies created by the automatic
increase in the number of members of the Board of Directors. At any and all such
meetings for such election, the holders of a majority of the outstanding shares
of Series A Preferred Stock shall be necessary to constitute a quorum for such
election, whether present in person or proxy, and such two directors shall be
elected by the vote of at least a majority of the shares of Series A Preferred
Stock held by such shareholders present or represented at the meeting. Any
director elected by holders of shares of Series A Preferred Stock pursuant to
this Section may be removed at any annual or special meeting, by vote of a
majority of the shareholders voting as a class who elected such director, with
or without cause. In case any vacancy shall occur among the directors elected by
the holders of shares of Series A Preferred Stock pursuant to this Section, such
vacancy may be filled by the remaining director so elected, or his successor
then in office, and the director so elected to fill such vacancy shall serve
until the next meeting of shareholders for the election of directors. After the
holders of shares of Series A Preferred Stock shall have exercised their right
to elect directors in any default period and during the continuance of such
period, the number of directors shall not be further increased or decreased
except by vote of the holders of shares of
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Series A Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Series A Preferred
Stock.
(iii) The right of the holders of shares of Series A Preferred
Stock, voting separately as a class, to elect two members of the Board of
Directors of the Corporation as aforesaid shall continue until, and only until,
such time as all arrears in dividends (whether or not declared) on the Series A
Preferred Stock shall have been paid or declared and set apart for payment, at
which time such right shall terminate, except as herein or by law expressly
provided subject to revesting in the event of each and every subsequent default
of the character above-mentioned. Upon any termination of the right of the
holders of the Series A Preferred Stock as a class to vote for directors as
herein provided, the term of office of all directors then in office elected by
the holders of shares of Series A Preferred Stock pursuant to this Section shall
terminate immediately. Whenever the term of office of the directors elected by
the holders of shares of Series A Preferred Stock pursuant to this Section shall
terminate and the special voting powers vested in the holders of the Series A
Preferred Stock pursuant to this Section shall have expired, the maximum number
of members of this Board of Directors of the Corporation shall be such number as
may be provided for in the By-laws of the Corporation, irrespective of any
increase made pursuant to the provisions of this Section.
(D) Except as otherwise required by applicable law or as set forth
herein, holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled
to vote with holders of common stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except dividends paid ratably on
the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
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53
(iii) except as permitted in subsection 4(A)(iv) below, redeem,
purchase or otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of any stock ranking
on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under subsection (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made (x) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (1) $1,000.00 per share or
(2) an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount to be
distributed per share to holders of shares of common stock, or (y) to the
holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all other
such parity stock in proportion to the
6
54
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare or pay any dividend on
shares of common stock payable in shares of common stock, or (ii) effect a
subdivision or combination or consolidation of the outstanding shares of common
stock (by reclassification or otherwise than by payment of a dividend in shares
of common stock) into a greater or lesser number of shares of common stock, then
in each such case the aggregate amount per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under
clause (x) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of common
stock outstanding immediately after such event and the denominator of which is
the number of shares of common stock that were outstanding immediately prior to
such event.
Neither the consolidation of nor merging of the Corporation with or
into any other corporation or corporations, nor the sale or other transfer of
all or substantially all of the assets of the Corporation, shall be deemed to be
a liquidation, dissolution or winding up of the Corporation within the meaning
of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of common stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of common stock is changed or exchanged,
plus accrued and unpaid dividends, if any, payable with respect to the Series A
Preferred Stock. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare or pay any dividend on shares of common stock
payable in shares of common stock, or (ii) effect a subdivision or combination
or consolidation of the outstanding shares of common stock (by reclassification
or otherwise than by payment of a dividend in shares of common stock) into a
greater or lesser number of shares of common stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
common stock outstanding immediately after such event and the denominator of
which is the number of shares of common stock that were outstanding immediately
prior to such event.
Section 8. Redemption. The shares of Series A Preferred Stock shall not
be redeemable; provided, however, that the foregoing shall not limit the ability
of the Corporation to purchase or otherwise deal in such shares to the extent
otherwise permitted hereby and by law.
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Section 9. Ranking. Unless otherwise expressly provided in the Amended
and Restated Articles of Incorporation or Articles Supplementary relating to any
other series of preferred stock of the Corporation, the Series A Preferred Stock
shall rank junior to every other series of the Corporation's preferred stock
previously or hereafter authorized, as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up and shall rank
senior to the common stock.
Section 10. Amendment. Neither these Articles Supplementary nor the
Amended and Restated Articles of Incorporation of the Corporation may be amended
in any manner which would materially alter or change the powers, preferences or
special rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Preferred Stock may be issued
in whole shares or in any fraction of a share that is one one-thousandth
(1/1,000th) of a share or any integral multiple of such fraction, which shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of shares of Series A Preferred
Stock. In lieu of fractional shares, the Corporation may elect to make a cash
payment as provided in the Rights Agreement for fractions of a share other than
one one-thousandth (1/1,000th) of a share or any integral multiple thereof."
The undersigned Vice President of the Corporation acknowledges these
Articles Supplementary to be the corporate act of the Corporation and, as to all
matters and facts required to be verified under oath, states that, to the best
of his knowledge, information and belief and under penalties of perjury, the
matters and facts set forth herein are true in all material respects.
8
56
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER DECEMBER 14, 2008 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF SUMMIT PROPERTIES
INC., AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS
AGREEMENT BETWEEN SUMMIT PROPERTIES INC. AND FIRST UNION NATIONAL BANK, AS
RIGHTS AGENT, DATED AS OF DECEMBER 14, 1998 (THE "RIGHTS AGREEMENT"). UNDER
CERTAIN CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
SUMMIT PROPERTIES INC.
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 December 14, 1998 (the "Rights Agreement") between
SUMMIT PROPERTIES INC. (the "Company") and FIRST UNION NATIONAL BANK, as Rights
Agent (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 14, 2008 at the office or offices of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, non-assessable share of the Series A Junior
Participating Cumulative Preferred Stock (the "Preferred Stock") of the Company,
at a purchase price of $_______ per one one-thousandth of a share (the "Exercise
Price"), 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 ________,
57
based on the Preferred 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 the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, 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
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Exercise Price and the number
of shares of Preferred Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
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 office of the
Company and the designated office of 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 Preferred 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. If this Right
Certificate shall be exercised in whole or in part pursuant to Section 11(a)(ii)
of the Rights Agreement, the holder shall be entitled to receive this Right
Certificate duly marked to indicate that such exercise has occurred as set forth
in the Rights Agreement.
Under certain circumstances, subject to the provisions of the Rights
Agreement, the Board of Directors of the Company at its option may exchange all
or any part of the Rights evidenced by this Certificate for shares of the
Company's Common Stock or Preferred Stock at an exchange ratio (subject to
adjustment) specified in the Rights Agreement.
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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 $0.01 per Right (payable in cash, Common
Stock or other consideration deemed appropriate by the Board of Directors).
The Company is not obligated to issue fractional shares of stock upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-thousandth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary receipts).
If the Company elects not to issue such fractional shares, in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock, 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 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 an authorized signatory of the Rights
Agent.
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WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
[Corporate Seal] SUMMIT PROPERTIES INC.
Attested: By:
----------------------------------
Name:
By: Title: [Chairman, Vice
---------------------------------- Chairman, President or
[Secretary or Assistant Secretary] Vice President]
Countersigned:
[ ],
-----------------------------------
as Rights Agent
-----------------------------------
Authorized Signatory
Date of countersignature:
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________ hereby sells, assigns and transfers unto
__________________________ (Please print name and address of transferee)
__________________________ this Right Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
_____________ Attorney, to transfer the within Right Certificate on the books of
the within-named Company, with full power of substitution.
Dated:
-------------------------
-----------------------------------
Signature
Signature Guaranteed:
--------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ___ are ___ are
not being 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); and
(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 Certificate from any Person who is, was or
became an Acquiring Person or an Affiliate or Associate of any such Person.
Dated:
--------------------- -----------------------------------
Signature
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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.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To SUMMIT PROPERTIES INC.:
The undersigned hereby irrevocably elects to exercise _______ Rights
represented by this Right Certificate to purchase the shares of Preferred 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 insert social security
or other identifying taxpayer number:
----------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate or if the Rights are being exercised pursuant to Section
11(a)(ii) of the Rights Agreement, a new Right Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying taxpayer number:
----------
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(Please print name and address)
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Dated:
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Signature
Signature Guaranteed:
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7
63
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ___ are ___ are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement); and
(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 Certificate from any Person who is, was or
became an Acquiring Person or an Affiliate or Associate of any such Person.
Dated:
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Signature
8
64
NOTICE
The signature to the foregoing Election to Purchase 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.
9
65
EXHIBIT C
SUMMARY OF SUMMIT PROPERTIES INC.
SHAREHOLDER RIGHTS AGREEMENT
On December 14, 1998, the Board of Directors of Summit Properties Inc.
(the "Company") adopted a Shareholder Rights Agreement (the "Rights Agreement").
The following description of the terms of the Rights Agreement does not purport
to be complete and is qualified in its entirety by reference to the copy of the
Rights Agreement which has been filed as an exhibit in the Company's public
reports filed with the Securities and Exchange Commission and is incorporated
herein by reference.
Pursuant to the terms of the Rights Agreement, the Board of Directors
declared a dividend distribution of one Preferred Stock Purchase Right (a
"Right") for each outstanding share of Common Stock of the Company (the "Common
Stock") to stockholders of record as of the close of business on December 15,
1998 (the "Record Date"). In addition, one Right will automatically attach to
each share of Common Stock issued between the Record Date and the Distribution
Date (as hereinafter defined). Each Right entitles the registered holder thereof
to purchase from the Company a unit consisting of one one-thousandth of a share
(a "Unit") of Series A Junior Participating Cumulative Preferred Stock, par
value $0.01 per share, at a cash exercise price of $45.00 per Unit, subject to
adjustment.
Initially, the Rights are not exercisable and are attached to and trade
with all shares of Common Stock outstanding as of, and issued subsequent to, the
Record Date. The Rights will separate from the Common Stock and will become
exercisable upon the earlier of (i) the close of business on the tenth calendar
day following the first public announcement that a person or group of affiliated
or associated persons has acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock (an "Acquiring Person"), or (ii) the close of
business on the tenth business day (or such later day as the Board of Directors
may determine) following the commencement of a tender offer or exchange offer
that would result upon its consummation in a person or group becoming the
beneficial owner of 15% or more of the outstanding shares of Common Stock (the
earlier of such dates being herein referred to as the "Distribution Date").
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 14, 2008 (the "Expiration Date"),
unless previously redeemed or exchanged by the Company as described below.
The Rights may be redeemed in whole, but not in part, at a price of
$0.01 per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors) by the Board of Directors only until the
earlier of (i) the time at which any person becomes an Acquiring Person, or (ii)
the expiration date of the Rights Agreement. 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.
66
The Rights Agreement may be amended by the Board of Directors in its
sole discretion until the time at which any person becomes an Acquiring Person.
After such time the Board of Directors may, subject to certain limitations set
forth in the Rights Agreement, amend the Rights Agreement only to cure any
ambiguity, defect or inconsistency, to shorten or lengthen any time period, or
to make changes that do not adversely affect the interests of Rights holders
(excluding the interests of an Acquiring Person or its associates or
affiliates). In addition, the Board of Directors may at any time prior to the
time at which any person becomes an Acquiring Person amend the Rights Agreement
to lower the threshold at which a person becomes an Acquiring Person to not less
than the greater of (i) the sum of .001% and the largest percentage of the
outstanding Common Stock then owned by any person and (ii) 10%.
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 Units, other securities of the Company, other
consideration or for common stock of an acquiring company.
2
