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EXHIBIT 1
RIGHTS AGREEMENT
Xxxxx Realty Investors, Inc.
and
The Bank of New York
Rights Agent
Rights Agreement
Dated as of January 15, 1999
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TABLE OF CONTENTS
PAGE
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Section 1. Certain Definitions..................................................................... 3
Section 2. Appointment of Rights Agent............................................................. 7
Section 3. Issuance of Right Certificates.......................................................... 7
Section 4 Form of Right Certificates.............................................................. 9
Section 5 Countersignature and Registration....................................................... 9
Section 6 Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates...................................................................... 10
Section 7 Exercise of Rights; Purchase Price of Right;
Expiration Date of Rights............................................................... 11
Section 8 Cancellation of Right Certificates...................................................... 12
Section 9 Reservation and Availability of Preferred Stock......................................... 12
Section 10 Preferred Stock Record Date............................................................. 13
Section 11 Adjustment of Purchase Price, Number of Shares
or Number of Rights..................................................................... 14
Section 12 Certificate of Adjusted Purchase Price or
Number of Shares........................................................................ 22
Section 13 Consolidation, Merger or Sale or Transfer of
Assets or Earning Power................................................................. 22
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Section 14 Fractional Rights and Fractional Shares................................................. 26
Section 15 Rights of Action........................................................................ 27
Section 16 Agreement of Rights Holders............................................................. 27
Section 17 Right Certificate Holder Not Deemed a Shareholder....................................... 28
Section 18 Concerning the Rights Agent............................................................. 28
Section 19 Merger or Consolidation or Change of Name of Rights Agent............................... 29
Section 20 Duties of Rights Agent.................................................................. 29
Section 21 Change of Rights Agent.................................................................. 32
Section 22 Issuance of New Right Certificate....................................................... 32
Section 23 Redemption.............................................................................. 33
Section 24 Exchange ............................................................................... 34
Section 25 Notice of Certain Events................................................................ 35
Section 26 Notices ............................................................................... 36
Section 27 Supplements and Amendments.............................................................. 36
Section 28 Successors.............................................................................. 37
Section 29 Benefits of this Agreement.............................................................. 37
Section 30 Severability............................................................................ 37
Section 31 Governing Law........................................................................... 37
Section 32 Counterparts............................................................................ 37
Section 33 Descriptive Headings.................................................................... 37
Section 34. Determinations and Actions by the Board of Directors.................................... 37
Exhibit A Certificate of Designations, Preferences, and Rights of Series A
Junior Participating Preferred Stock of Xxxxx Realty Investors, Inc..................... 39
Exhibit B Form of Right Certificate............................................................... 45
Exhibit C Summary of Terms of Rights Plan......................................................... 51
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RIGHTS AGREEMENT
This Agreement is entered into as of January 15, 1999 between Xxxxx
Realty Investors, Inc., a Michigan corporation (the "Company"), and The Bank of
New York, a New York banking corporation (the "Rights Agent").
RECITALS
A. The Company's Board of Directors has authorized and declared a
dividend of one Preferred Stock purchase right (a "Right") for each share of
Common Stock of the Company outstanding on January 15, 1999 (the "Record Date").
B. Each Right initially represents the right to purchase, under certain
circumstances, one one-thousandth of a share of Preferred Stock, upon the terms
and subject to the conditions herein set forth.
C. The Company has further authorized and directed the issuance of one
Right with respect to each share of Common Stock that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Common Stock of the Company then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company or any Subsidiary of the
Company, (iv) any entity holding Common Stock for or pursuant to the terms of
any such plan, or (v) any Exempt Person. Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, (including,
without limitation, because (A) such Person was unaware that it beneficially
owned a percentage of Common Stock that would otherwise cause such Person to be
an "Acquiring Person" or (B) such Person was aware of the extent of its
Beneficial Ownership of Common Stock but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement), and without any
intention of changing or influencing control of the Company, and such Person
divests as promptly as practicable a sufficient number of shares of Common Stock
so that such Person would no longer be an Acquiring Person, as defined pursuant
to the foregoing provisions of this Section 1(a), then such Person shall not be
deemed to be or have become an "Acquiring Person" at any time for any purposes
of this Agreement. For all purposes of this Agreement, any calculation of the
number of shares of
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Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
in effect on the date of this Agreement.
(b) "Act" means the Securities Act of 1933, as amended.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms under Rule 12b-2 of the General Rules and
Regulations of the Exchange Act, as in effect on the date of this Agreement.
(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 beneficially owns, directly or indirectly (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement);
(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, compliance with regulatory requirements, fulfillment of a condition or
otherwise) 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,
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, (w) 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, (x) securities which such Person has a right
to acquire upon the exercise of Rights at any time prior to the time that any
Person becomes an Acquiring Person, (y) securities issuable upon the exercise of
Rights from and after the time that any Person becomes an Acquiring Person if
such Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or Section
22 ("Original Rights") or pursuant to Section 11(i) or Section 11(o) with
respect to an adjustment to Original Rights or (z) securities which such Person
or any of such Person's Affiliates or Associates may acquire, does or do acquire
or may be deemed to have the right to acquire, pursuant to any merger or other
acquisition agreement between the Company and such Person (or one or more of his
Affiliates or Associates) if such agreement has been approved by the Board of
Directors of the Company prior to such Person's becoming an Acquiring Person; 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 or consent given to such person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then
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reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) and with
respect to which such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities), whether or not in writing, for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy or consent
as described in the proviso to Section 1(d)(ii)(B)) or disposing of any
securities of the Company.
(e) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in 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 time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York time, on the next succeeding
business Day.
(g) "Common Stock" when used with reference to the Company
shall mean the shares of common stock, par value $.01 per share, of the Company.
"Common Stock" when used with reference to any Person other than the Company
shall mean the stock (or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in
Section 3.
(i) "Exempt Person" shall mean any Person who,
together with all Affiliates and Associates of such Person, (i) is, on the
Record Date, the Beneficial Owner of securities representing 15% or more of the
shares of Common Stock (as determined in good faith by the Company's Board of
Directors) or (ii) becomes the Beneficial Owner of securities representing 15%
or more of the shares of Common Stock then outstanding because of a reduction in
the number of outstanding shares of Common Stock then outstanding as a result of
the purchase by the Company or a Subsidiary of the Company of shares of Common
Stock; provided, however, that any Exempt Person shall no longer be deemed to be
an Exempt Person and shall be deemed an Acquiring Person if such Person,
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner, at any time after the date such Person became the Beneficial
Owner of (and so long as such Person continues to be the Beneficial Owner of)
15% or more of the then outstanding shares of Common Stock, of any additional
securities of the Company by any means whatsoever, except (x) pursuant to the
exercise of options or warrants to purchase Common Stock outstanding and
beneficially owned by such Person as of the date such Person became the
Beneficial Owner of 15% or more of the then outstanding shares of Common Stock
or as a result of an adjustment to the number of shares of Common Stock for
which such options or warrants are exercisable pursuant to the terms thereof, or
(y) as a result of a stock split, stock dividend or the like. A purchaser,
assignee or transferee of
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the shares of Common Stock (or warrants or options exercisable for Common Stock)
from an Exempt Person shall not become or be an Exempt Person.
(k) "Person" shall mean any individual, partnership, joint
venture, limited liability company, trust, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
(l) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company having
the rights and preferences set forth in the Certificate of Designations,
Preferences, and Rights of Series A Junior Participating Preferred Stock,
attached to this Agreement as Exhibit A.
(m) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person (which, for purposes
of this definition, shall include, without limitation, the filing of a report
pursuant to Section 13(d) of the Exchange Act or pursuant to a comparable
successor statute) that an Acquiring Person has become such.
(n) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, of record or beneficially, directly or
indirectly, by such Person.
(o) "Trigger Event" shall be deemed to have occurred upon any
Person becoming an Acquiring Person.
(p) The following terms shall have the meanings defined for
such terms in the Sections set forth below:
Term Section
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Adjustment Shares. 11(a)(ii)
common stock equivalent 11(a)(iii)
Company Recitals
Current Market Price 11(d)(i)
Current Value 11(a)(iii)
Equivalent Preferred Stock 11(b)
Exchange Act 1(a)
Exchange Ratio 24(a)
Expiration Date 7(a)
Final Expiration Date 7(a)
NASDAQ 11(d)(i)
Original Rights 1(d)(ii)
Principal Party 13(b)
Purchase Price 4
Record Date Recitals
Redemption Date 7(a)
Redemption Price 23(a)
Right Recitals
Right Certificate 3(a)
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Rights Agent Recitals
Spread 11(a)(iii)
Substitution Period 11(a)(iii)
Summary of Rights 3(b)
Trading Day 11(d)(i)
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and in no event be
liable for, the acts or omissions of any such co-Rights Agent. In the event the
Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agent shall be as the Company shall determine.
Contemporaneously with such appointment, if any, the Company shall notify the
Rights Agent thereof.
SECTION 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Rights Represented by Share Certificates; Separation of
Rights. Until the earlier of (i) the tenth day after the Shares Acquisition Date
or (ii) the tenth Business Day after the date of the commencement of, or first
public announcement of the intent of any Person (other than (w) the Company, (x)
any Subsidiary of the Company, (y) any employee benefit plan of the Company or
any Subsidiary of the Company, or (z) any entity holding Common Stock for or
pursuant to the terms of any such plan) to commence, a tender or exchange offer
the consummation of which would result in any Person (other than (w) the
Company, (x) any Subsidiary of the Company, (y) any employee benefit plan of the
Company or any Subsidiary of the Company, or (z) any entity holding Common Stock
for or pursuant to the terms of any such plan) becoming the Beneficial Owner of
Common Stock aggregating 15% or more of the then outstanding Common Stock of the
Company (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights (unless earlier expired, redeemed or
terminated) will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Stock registered in the names of the holders
thereof (which certificates for Common Stock shall also be deemed to be Right
Certificates) and not by separate certificates, and (y) the Rights (and the
right to receive certificates therefore) will be transferable only in connection
with the transfer of the underlying Common Stock. The Company shall give the
Rights Agent prompt written notice of the Distribution Date. As soon as
practicable after the Distribution Date, and receipt of written notice of the
Distribution Date from the Company, the Company will prepare and execute, the
Rights Agent will countersign, and the Company (or if requested the Rights
Agent, at the Company's expense), will send by first-class, insured,
postage-prepaid mail, to each record holder of Common Stock (other than any
Acquiring Person, or any Associate or Affiliate of an Acquiring Person) 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 for Rights, in
substantially the form of Exhibit B hereto (a "Right Certificate"), evidencing
one Right (subject to adjustment as provided herein) for each share of Common
Stock so held. As of the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
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(b) Mailing of Summary of Rights. On the Record Date, or as
soon as practicable thereafter, the Company will send or cause to be sent a
cover letter and a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form of Exhibit C attached hereto (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder of Common Stock as
of the close of business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for Common Stock
outstanding as of the Record Date, until the Distribution Date (or the earlier
Expiration Date), the Rights will be evidenced by such certificates for Common
Stock and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the Distribution Date (or the
earlier Expiration Date), the surrender for transfer of any certificate for
Common Stock outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the transfer of the Rights associated
with the Common Stock represented thereby.
(c) New Certificates After Record Date. Certificates for
Common Stock which become outstanding (whether upon issuance out of authorized
but unissued Common Stock, treasury stock, or transfer or exchange of
outstanding Common Stock) after the Record Date but prior to the earliest of the
Distribution Date, or the Expiration Date shall be deemed also to be
certificates for Rights, and shall have impressed, printed, stamped, written or
otherwise affixed onto them the following legend:
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in a
Rights Agreement between Xxxxx Realty Investors, Inc.
(the "Company"), and The Bank of New York, as Rights
Agent, dated as of January 15, 1999 as the same may
be amended from time to time (the "Agreement"), the
terms of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal executive office of the Company. Under
certain circumstances, as set forth in the Agreement,
such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of
this certificate a copy of the Agreement without
charge after receipt of a written request therefore.
AS DESCRIBED IN THE AGREEMENT, RIGHTS WHICH ARE OWNED
BY, TRANSFERRED TO OR HAVE BEEN OWNED BY ACQUIRING
PERSONS OR ASSOCIATES OR AFFILIATES THEREOF (AS
DEFINED IN THE AGREEMENT) SHALL BECOME NULL AND VOID
AND WILL NO LONGER BE TRANSFERABLE.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier Expiration Date), the Rights associated with
the Common Stock represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificates,
except as otherwise provided herein, shall
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also constitute the transfer of the Rights associated with the Common Stock
represented thereby. In the event that the Company purchases or acquires any
Common Stock after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Stock shall be deemed cancelled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Stock which are no longer outstanding.
Notwithstanding this Section 3(c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase shares, certification and assignment to be printed
on the reverse thereof) shall be substantially the same as 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 or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. The Right Certificates
shall be in a machine printable format and in a form reasonably satisfactory to
the Rights Agent. Subject to the terms and conditions hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock (or following a Trigger Event,
Common Stock, other securities, cash or other assets, as the case may be) as
shall be set forth therein at the price per one-one-thousandths of a share of
Preferred Stock set forth therein (the "Purchase Price"), but the number of such
one one-thousandths of a share of Preferred Stock and the Purchase Price shall
be subject to adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Company by its Chief Executive Officer, its
President, any of its Vice Presidents, or its Treasurer, either manually or by
facsimile signature, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned manually by an authorized signatory of the
Rights Agent, but it shall not be necessary for the same signatory to
countersign all of the Right Certificates hereunder. No Right Certificate shall
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.
In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though the
person who countersigned such
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Right Certificates had not ceased to be such signatory; and any Right
Certificate may be countersigned on behalf of the Rights Agent by any person
who, at the actual date of the countersignature of such Right Certificate, shall
be a proper signatory of the Rights Agent to countersign such Right Certificate,
although at the date of the execution of this Agreement any such person was not
such a signatory.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its designated office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates, the certificate
number of each of the Right Certificates, and the date of each of the Right
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. Subject
to the provisions of Sections 7(e), 11(a)(ii) and 14, 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 Right Certificates
(other than Right Certificates representing Rights that have become void
pursuant to Section 11(a)(ii) or that have been exchanged pursuant to Section
24) may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of one one-thousandths of a share of Preferred Stock as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender, together with any
required form of assignment and certificate duly completed, the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose. 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 or Right Certificates 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 or Right Certificates 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 countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment from the holders of Right Certificates 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.
Subject to the provisions of Section 11(a)(ii), at any time after the
Distribution Date and prior to the Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, 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
make and deliver a new Right Certificate of like tenor to the Rights Agent for
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countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE OF RIGHT; EXPIRATION
DATE OF RIGHTS.
(a) Exercise of Rights. Subject to Section 11(a)(ii) and
except as otherwise provided herein, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby, 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 certification on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase
Price for the total number of one one-thousandths of a share of Preferred Stock
(or shares of Common Stock, other securities, cash or other assets, as the case
may be) as to which the Rights are exercised, at or prior to the time (the
"Expiration Date") that is the earliest of (i) the close of business on January
15, 2009 (the "Final Expiration Date"), or (ii) the time at which such Rights
are exchanged as provided in Section 24 hereof, or (iii) the time at which the
Rights are redeemed as provided in Section 23 (the "Redemption Date").
(b) Purchase Price of Right. The Purchase Price for each one
one-thousandth of a share of Preferred Stock purchasable pursuant to the
exercise of a Right shall initially be $42.00, and shall be subject to
adjustment from time to time as provided in Sections 11 or 13 hereof and shall
be payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Payment Procedures. Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase and
certification duly executed, accompanied by payment of the aggregate Purchase
Price for the total number of one one-thousandths of a share of Preferred Stock
to be purchased and an amount equal to any applicable transfer tax required to
be paid by the holder of such Right Certificate in accordance with Section 9, in
cash or by certified or cashier's check or money order payable to the order of
the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Stock (or make available, if the Rights
Agent is the transfer agent) certificates for the number of shares of Preferred
Stock to be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the Company shall have elected
to deposit the total number of shares of Preferred Stock issuable upon exercise
of the Rights hereunder with a depository agent, requisition from the depositary
agent depositary receipts representing interests in such number of one
one-thousandths of a share of Preferred Stock as are to be purchased (in which
case certificates for the Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of the issuance of fractional shares in accordance with Section 14 or otherwise
in accordance with Section 11(a)(iii), (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 receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Company is obligated to
issue other securities of the Company, pay cash and/or distribute other property
pursuant to Section
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11(a)(iii), the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) Partial Exercise of Right. 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.
(e) Full Information Concerning Owner of Right. Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported exercise as set forth in
this Section 7 unless such registered holder shall have (i) completed and signed
the certificate contained in the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or, Affiliates or Associates thereof or of the holder,
or of any other Person with which such holder or any of such holder's Affiliates
or Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of any
securities of the Company as the Company shall reasonably request.
SECTION 8. CANCELLATION OF RIGHT CERTIFICATES. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The 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
cancelled Right Certificates to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK. The Company
covenants and agrees that from and after the Distribution Date it will cause to
be reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Trigger Event, out of its
authorized and unissued Common Stock or other securities) the number of shares
of Preferred Stock (and, following the occurrence of a Trigger Event, Common
Stock and/or other securities) that will be sufficient to permit the exercise in
full of all outstanding Rights.
So long as the Preferred Stock (and, following the occurrence of a
Trigger Event, Common Stock and/or other securities) issuable upon the exercise
of Rights may be listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed or admitted to
trading on such exchange upon official notice of issuance upon such exercise.
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The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Preferred Stock (and, following
the occurrence of a Trigger Event, Common Stock and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.
From and after such time as the Rights become exercisable, the Company
shall use its best efforts, if then necessary to permit the issuance of shares
of Preferred Stock upon the exercise of Rights, to register and qualify such
shares of Preferred Stock under the Securities Act and any applicable state
securities or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the date as of which the Rights
are no longer exercisable for such securities and the Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement, in each case
with simultaneous written notice to the Rights Agent, stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act (if required) shall have been declared effective. The
Rights Agent may assume that any Right exercised is permitted to be exercised
under applicable law and shall have no liability for acting in reliance upon
such assumption.
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 Preferred Stock (or Common Stock and/or other securities, as the case may
be) upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax which may be payable in respect of any transfer or delivery
of Right Certificates to a person other than, or the issuance or delivery of
certificates for the Preferred Stock (or Common Stock and/or other securities,
as the case may be) in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or
deliver any certificates for Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the 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 (or Common Stock and/or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered
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and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or Common Stock and/or other securities, as the case
may be) transfer books of the Company are closed, such person shall be deemed to
have become the record holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred Stock 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 PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number of shares of Preferred Stock or other
securities or property purchasable upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) Post-Execution Events.
(i) Adjustment of Purchase Price Following Certain
Events. In the event the Company shall at any time after the date of this
Agreement (A) declare and pay a dividend on the Preferred Stock payable in
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares of Preferred Stock
or (D) issue any shares of its stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of 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 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, he would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of stock of the Company issuable upon exercise
of one Right. If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, the
adjustment required pursuant to, Section 11(a)(ii).
(ii) Trigger Event; Flip-In Event. Subject to Section
24 of this Agreement, in the event that a Trigger Event occurs, then, from and
after the first occurrence of such event, each holder of a Right, except as
provided below, shall thereafter have a right to receive, upon exercise thereof
at a price per Right equal to the current Purchase Price multiplied by the
number of one one-thousandths of a share of Preferred Stock for which a Right is
then exercisable, in accordance with the terms of this Agreement, and in lieu of
shares of Preferred Stock, such number of shares of Common
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Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-thousandths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the Current Market Price per
share of the shares of the Common Stock (determined pursuant to Section 11(d))
on the first date of the occurrence of the Trigger Event (such number of shares
are hereinafter referred to as the "Adjustment Shares"); provided that the
Purchase Price and the number of Adjustment Shares shall thereafter be subject
to further adjustment, as provided in this Agreement to reflect any events
occurring after the date of such first occurrence. Notwithstanding the
foregoing, upon the occurrence of a Trigger Event, any Rights that are or were
acquired or beneficially owned by (1) any Acquiring Person or any Associate or
Affiliate thereof, (2) a transferee of any Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (3) a transferee of any Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of this Section 11(a)(ii) and
subsequent transferees, shall become void without any further action, and any
holder (whether or not such holder is an Acquiring Person or an Associate or
Affiliate of an Acquiring Person) of such Rights shall thereafter have no right
to exercise such Rights under any provision of this Agreement or otherwise. The
Company shall not enter into any transaction of the type described in this
Section 11(a)(ii) if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any arrangements which, as a
result of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. From and after the
Trigger Event, no Right Certificate shall be issued pursuant to Section 3 or
Section 6 that represents Rights that are or have become void pursuant to the
provisions of this paragraph, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become void pursuant to the
provisions of this paragraph shall be canceled. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to any Acquiring Person or its Affiliates, Associates or transferees
hereunder. From and after the occurrence of an event specified in Section 13(a),
any Rights that theretofore have not been exercised pursuant to this Section
11(a)(ii) shall thereafter be exercisable only in accordance with Section 13 and
not pursuant to this Section 11(a)(ii).
(iii) Insufficient Shares of Common Stock.
The Company may, at its option, substitute for a share of Common Stock issuable
upon the exercise of Rights in accordance with the foregoing Section 11(a)(ii),
a number of shares of Preferred Stock or fraction thereof such that the current
per share market price of one share of Preferred Stock multiplied by such number
or fraction is equal to the current per share market price of one share of
Common Stock. In the event that upon the occurrence of one or more of the events
listed in Section 11(a)(ii) above there shall not be sufficient Common Stock
authorized but unissued to permit the exercise in full of the Rights in
accordance with the foregoing Section 11(a)(ii), the Company shall take all such
action as may be necessary to
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authorize additional shares of Common Stock for issuance upon exercise of the
Rights; provided, however, that if the Company determines that it is unable to
cause the authorization of a sufficient number of additional shares of Common
Stock, then, in the event the Rights become exercisable, the Company, with
respect to each Right and to the extent necessary and permitted by applicable
law and any agreements or instruments in effect on the date hereof to which it
is a party, shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value"), over (2) the
Purchase Price (such excess, the "Spread") and (B) with respect to each Right
(other than Rights which have become void pursuant to Section 11(a)(ii), make
adequate provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Preferred Stocks or other equity securities of the Company (including, without
limitation, shares, or fractions of shares, of preferred stock which, by virtue
of having dividend, voting and liquidation rights substantially comparable to
those of the shares of Common Stock, the Board of Directors of the Company has
deemed in good faith to have substantially the same value as Common Stock) (each
such share of preferred stock or fractions of shares of preferred stock
constituting a "common stock equivalent")), (4) debt securities of the Company,
(5) other assets or (6) any combination of the foregoing having an aggregate
value equal to the Current Value, where such aggregate value has been determined
by the Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected in good faith 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 first occurrence of one of the events listed in
Section 11(a)(ii) above, then the Company shall be obligated to deliver, to the
extent necessary and permitted by applicable law and any agreements or
instruments in effect on the date hereof to which it is a party, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, Common Stock (to the extent available) and then, if necessary, such
number or fractions of Preferred Stocks (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Board of Directors of the Company shall determine in good faith
that it is unlikely that sufficient additional Common Stock could be authorized
for issuance upon exercise in full of the Rights, the thirty (30) day period set
forth above may be extended and re-extended to the extent necessary, but not
more than ninety (90) days following the first occurrence of one of the events
listed in Section 11(a)(ii) above, in order that the Company may seek
shareholder approval for the authorization of such additional shares (such
period as may be extended, the "Substitution Period"). To the extent that the
Company determines that some action need be taken pursuant to the second and/or
third sentences of this Section 11(a)(iii), the Company (x) shall provide 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 as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of a share of Common Stock shall be the current per share market price
(as determined pursuant to Section 11(d) on the date of the occurrence of a
Trigger Event and the value of any "common stock equivalent" shall be deemed to
have the same value as the Common Stock on such date. The Board of
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Directors of the Company may, but shall not be required to, establish procedures
to allocate the right to receive Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(a)(iii). Actions of the
Company pursuant to this Section 11(a)(iii) must be approved by the vote of a
majority of the Board of Directors.
(b) Dilutive Rights Offering. In case 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 45 calendar days
after such record date) to subscribe for or purchase Preferred Stock (or
securities having substantially the same rights, privileges and preferences as
the Preferred Stock ("Equivalent Preferred Stock") or securities convertible
into Preferred Stock or Equivalent Preferred Stock) at a price per share of
Preferred Stock or Equivalent Preferred Stock (or having a conversion or
exercise price per share, if a security convertible into shares of Preferred
Stock or Equivalent Preferred Stock) less than the Current Market Price (as
defined in Section 11(d)) per share of the Preferred Stock or Equivalent
Preferred Stock, as the case may be, on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of shares of Preferred Stock or
Equivalent Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or shares of Equivalent Preferred Stock
to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price and the
denominator of which shall be the number of shares of Preferred Stock and
Equivalent Preferred Stock outstanding on such record date plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose 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. Shares of Preferred Stock and Equivalent Preferred Stock
owned by or held for the account of the Company or any Subsidiary 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, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) Distributions. In case the Company shall fix a record date
for the making of a distribution to all holders of the 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, securities or assets (other than a regular
periodic cash dividend or a dividend payable in Preferred Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then Current Market Price per
share of the Preferred Stock on such
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record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets,
securities or evidences of indebtedness so as to be distributed or of such
subscription rights or warrants applicable to one share of Preferred Stock and
the denominator of which shall be such Current Market Price per share of
Preferred Stock. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d) Current Per Share Market Value. For the purpose of
any computation hereunder, other than computations made pursuant to Section
11(a)(iii),
(i) General. The "Current Market Price"
per share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined in this paragraph
(d)) immediately prior to such date and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the event that the
Current Market Price per share of Common Stock is determined during the period
following the announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights)
or (B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above after the ex-dividend date for such
dividend or distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Market Price shall be
appropriately adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of the Common Stock are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares of the Common Stock are listed or admitted to trading or, if the shares
of the Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the shares
of the Common Stock are not quoted by such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in the Common Stock, the
fair value of such shares on such date shall be as determined in good faith by
the Company's Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
The term "Trading
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Day" shall mean a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading is open for
the transaction of business or, if the shares of the Common Stock are not listed
or admitted to trading on any national securities exchange, a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in the State of New
York are not authorized or obligated by law or executive order to close. If the
Common Stock is not publicly held or not so listed or traded, "Current Market
Price" per share shall mean the fair value per share as determined in good faith
by the Company's Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) Preferred Stock. For the purpose of any
computation hereunder, the "Current Market Price" per share of Preferred Stock
shall be determined in the same manner as set forth above for the Common Stock
in clause (i) of this Section 11(d) (other than the last sentence thereof). If
the Current Market Price per share of Preferred Stock cannot be determined in
the manner provided above or if the Preferred Stock is not publicly held or
listed or traded in any manner described in clause (i) of this Section 11(d),
the "Current Market Price" per share of Preferred Stock shall be conclusively
deemed to be an amount equal to 1000 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the Common Stock. If neither
the Common Stock nor the Preferred Stock is publicly held or so listed or
traded, "Current Market Price" per share of the Preferred Stock shall mean the
fair value per share as determined in good faith by the Company's Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all purposes of this
Agreement, the "Current Market Price" of one one-thousandths of a share of
Preferred Stock shall be equal to the "Current Market Price" of one share of
Preferred Stock divided by 1000.
(e) Insignificant Changes; Purchase Price Adjustments.
Anything herein to the contrary notwithstanding, no adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest one-millionth of a share of Preferred Stock or ten-thousandth of a
share of Common Stock or any other security as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from the
date of the transaction which requires such adjustment or (ii) the Expiration
Date.
(f) Shares Other Than Preferred Stock. If as a result of an
adjustment made pursuant to Section 11(a) or Section 13(a), the holder of any
Right thereafter exercised shall become entitled to receive any shares of stock
of the Company other than shares of Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any Right and the Purchase
Price thereof shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the Preferred Stock contained in Sections 11(a) through (o), inclusive, and
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the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) Rights Issued Prior to Adjustment. All Rights originally
issued by the Company subsequent to any adjustment made to the Purchase Price
hereunder shall include the right to purchase, at the adjusted Purchase Price,
the number of one one-thousandths of a share of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Effect of Adjustments. Unless the Company shall have
exercised its election as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b) and (c),
each Right outstanding immediately prior to the making of such adjustment shall
thereafter include the right to purchase, at the adjusted Purchase Price, that
number of shares (calculated to the nearest one-millionth) obtained by (i)
multiplying (x) the number of shares covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) Adjustment in Number of Rights. The Company may elect on
or after the date of any adjustment of the Purchase Price to adjust the number
of Rights, in substitution for any adjustment in the number of shares of
Preferred Stock issuable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of shares of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 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
may, 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 to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Right Certificates on the record date specified in
the public announcement.
(j) Right Certificates Unchanged. Irrespective of any
adjustment or change in the Purchase Price or the number of shares of Preferred
Stock issuable upon the
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exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Right Certificates issued hereunder.
(k) Par Value Limitations. Before taking any action that would
cause an adjustment reducing the Purchase Price below one one-thousandths of the
then par value, if any, of a share of Preferred Stock or other shares of 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 Preferred
Stock or other such shares at such adjusted Purchase Price.
(l) Deferred Issuance. In any case in which this Section 11
shall require that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised after
such record date of that number of shares of Preferred Stock and shares of other
stock or securities of the Company, if any, issuable upon such exercise over and
above the shares of Preferred Stock and shares of other stock or other
securities, assets or cash of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Reduction in Purchase Price. Anything in this Section 11
to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that the Board of Directors of
the Company shall determine to be advisable in order that any consolidation or
subdivision of shares of Preferred Stock, issuance wholly for cash of any of the
Preferred Stock at less than the current market price, issuance wholly for cash
of Preferred Stock or securities which by their terms are convertible into or
exchangeable for Preferred Stock, dividends on Preferred Stock payable in
Preferred Stock 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) Company Not to Diminish Benefits of Rights. The Company
covenants and agrees that after the earlier of the Shares Acquisition Date or
Distribution Date it will not, except as permitted by Section 23, 26 or 27, 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) Adjustment of Rights Associated with Common Stock.
Notwithstanding anything in this Agreement to the contrary, in the event that at
any time after the date of this Agreement and prior to the Distribution Date,
the Company shall (i) declare or pay any dividend on the outstanding Common
Stock payable in Common Stock, (ii) effect a subdivision or consolidation of the
outstanding Common Stock (by reclassification or otherwise than by the payment
of dividends payable in Common Stock), or (iii) combine the outstanding shares
of Common Stock into a greater or lesser number of
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shares of Common Stock, then in any such case, the number of Rights associated
with each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date or in accordance with Section 22
shall be proportionately adjusted so that the number of Rights thereafter
associated with each Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with each share
of Common Stock immediately prior to such event by a fraction, the numerator of
which is the total number of shares of Common Stock outstanding immediately
before such event and the denominator of which is the total number of shares of
Common Stock outstanding immediately after such event. The adjustments provided
for in this Section 11(n) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or consolidation is
effected.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 or 13, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Stock or the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) Flip-Over Event. In the event that, from and after the
first occurrence of a Trigger Event, directly or indirectly, (a) the Company
shall consolidate with, or merge with and into, any other Person, and the
Company shall not be the continuing or surviving corporation, (b) any Person
shall consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of the Company or any other
Person or cash or any other property, or (c) the Company shall sell, exchange,
mortgage, or otherwise transfer (or one or more of its Subsidiaries shall sell,
exchange, mortgage or otherwise transfer), in one or more 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 one or more wholly-owned Subsidiaries of the Company)
in one or more transactions each of which complies with Section 11(n), then, and
in each such case, proper provision shall be made so that (i) each holder of a
Right (other than Rights which have become void pursuant to Section 11(a)(ii))
shall thereafter have the right to receive, upon the exercise thereof at a price
per Right equal to the then current Purchase Price multiplied by the 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 Trigger Event (as
subsequently adjusted pursuant to Sections 11(a)(i), 11(b), 11(c), 11(h), 11(i)
and 11(l), in accordance with the terms of this Agreement and in lieu of shares
of Preferred Stock or Common Stock, such number of validly authorized and
issued, fully paid, non-assessable and freely tradable shares of Common Stock of
the Principal Party (as such term is hereinafter defined) not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (x) multiplying the then current Purchase
Price by the number of one one-thousandths of a
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share of Preferred Stock for which a Right was exercisable immediately prior to
the first occurrence of a Trigger Event (as subsequently adjusted pursuant to
Sections 11(a), 11(b), 11(c), 11(h), 11(i) and 11(l)) and dividing that product
by (y) 50% of the then Current Market Price per share of the Common Stock of
such Principal Party (determined pursuant to Section 11(d)) on the date of
consummation of such consolidation, merger, sale or transfer; provided, that the
price per Right so payable and the number of shares of Common Stock of such
Principal Party so receivable upon exercise of a Right shall thereafter be
subject to further adjustment as appropriate in accordance with Section 11(f) to
reflect any events covered thereby occurring in respect of the Common Stock of
such Principal Party after the occurrence of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party; and (iv)
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of Common Stock in accordance
with Section 9) 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 Common Stock thereafter deliverable upon
the exercise of the Rights; provided that, upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Purchase Price as provided in this Section 13(a), such cash, shares, rights,
warrants and other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the Common Stock
of the Principal Party receivable upon the exercise of a Right pursuant to this
Section 13(a), and such Principal Party shall take such steps (including, but
not limited to, reservation of shares of stock) as may be necessary to permit
the subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property. The Company shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement confirming that the requirements of this
Section 13(a) and Section 13(b) shall promptly be performed in accordance with
their terms and that such consolidation, merger, sale or transfer of assets
shall not result in a default by the Principal Party under this Agreement as the
same shall have been assumed by the Principal Party pursuant to this Section
13(a) and Section 13(b) and providing that, as soon as practicable after
executing such agreement pursuant to this Section 13, the Principal Party, at
its own expense, shall:
(1) Certain Transactions. Prepare and file a registration
statement under the Securities Act, if necessary, with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate form,
use its best efforts to cause such registration statement to become effective as
soon as practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date and
similarly comply with applicable state securities laws;
(2) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York Stock
Exchange or on another national securities exchange, to list or admit to trading
(or continue the listing of) the
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Rights and the securities purchasable upon exercise of the Rights on the New
York Stock Exchange or such securities exchange, or, if the Common Stock of the
Principal Party shall not be listed or admitted to trading on the New York Stock
Exchange or a national securities exchange, to cause the Rights and the
securities receivable upon exercise of the Rights to be authorized for quotation
on Nasdaq or on such other system then in use;
(3) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(4) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
In case the Principal Party has provision in any of its authorized
securities or in its charter or by-laws or other instrument governing its
corporate 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, Common Stock or common stock
equivalents of such Principal Party at less than the then current market price
per share thereof (determined pursuant to Section 11(d)) or securities
exercisable for, or convertible into, Common Stock or common stock equivalents
of such Principal Party at less than such then current market price (other than
to holders of Rights pursuant to this Section 13), or (ii) providing for any
special payment, taxes or similar provision in connection with the issuance of
the Common Stock of such Principal Party pursuant to the provision of Section
13, then, in such event, the Company hereby agrees with each holder of Rights
that it shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
The Company covenants and agrees that it shall not, at any time after
the Trigger Event, enter into any transaction of the type described in clauses
(A) through (C) of this Section 13(a) if (i) at the time of or immediately after
such consolidation, merger, sale, transfer or other transaction there are any
rights, warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (ii) prior to, simultaneously with or
immediately after such consolidation, merger, sale, transfer or other
transaction, the shareholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of Section 13(b) shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights. The
provisions of this Section 13 shall similarly apply to successive transactions
of the type described in clauses (A) through (C) of this Section 13(a).
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(b) Principal Party. "Principal Party" shall mean:
(i) in the case of any transaction described in (A) or
(B) of the first sentence of Section 13(a): (i) the Person that is the issuer of
the securities into which the shares of Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
of the shares of Common Stock which have the greatest outstanding aggregate
market value, or (ii) if no securities are so issued, (x) the Person that is the
other party to the merger, if such Person survives said merger, or, if there is
more than one such Person, the Person the Common Stock of which have the
greatest aggregate market value of shares outstanding or (y) if the Person that
is the other party to the merger does not survive the merger, the Person that
does survive the merger (including the Company if it survives) or (z) the Person
resulting from the consolidation; and
(ii) in the case of any transaction described in (C) of
the first sentence in 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 so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons is the
issuer of Common Stock having the greatest aggregate market value of shares
outstanding; provided, however, that in any such case described in the foregoing
clause (A) or (B) of this Section 13(b), if the shares of Common Stock of such
Person are not at such time or have not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, then (1) if
such Person is a direct or indirect Subsidiary of another Person the Common
Stock of which are and have been so registered, the term "Principal Party" shall
refer to such other Person, or (2) if such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stock of all of which are and
have been so registered, the term "Principal Party" shall refer to whichever of
such Persons is the issuer of Common Stock having the greatest aggregate market
value of shares outstanding, or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth in clauses (1)
and (2) above shall apply to each of the owners having an interest in the
venture as if the Person owned by the joint venture was a Subsidiary of both or
all of such joint venturers, and the Principal Party in each such case shall
bear the obligations set forth in this Section 13 in the same ratio as its
interest in such Person bears to the total of such interests.
(c) In no event shall the Rights Agent have any liability in
respect of any such Principal Party transactions, including, without limitation,
the propriety thereof. The Rights Agent may rely and be fully protected in
relying upon a certificate of the Company stating that the provisions of this
Section 13 have been fulfilled. Notwithstanding anything in this Agreement to
the contrary, the prior written consent of the Rights Agent must be obtained in
connection with any supplemental agreement which alters the rights or duties of
the Rights Agent.
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SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) Cash In Lieu of Fractional Rights. The Company shall not
be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Right Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right. For the purposes
of this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted. to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the current market
value of the Rights on such date shall be the fair value of the Rights as
determined in good faith by the Board of Directors of the Company.
(b) Cash in Lieu of Fractional Preferred Stock. 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 or exchange of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one ten-thousandth of a share of
Preferred Stock). Interests in fractions of shares of Preferred Stock in
integral multiples of one one-thousandth of a share of Preferred Stock may, at
the election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. 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 shall pay to the registered holders of Right Certificates at the time
such Rights are exercised or exchanged as herein provided an amount in cash
equal to the same fraction of the current per share market price of one share of
Preferred Stock as determined in accordance with Section 14(a) for the Trading
Day immediately prior to the date of such exercise or exchange.
(c) Cash in Lieu of Fractional Common Stock. The Company shall
not be required to issue fractions of shares of Common Stock or to distribute
certificates which represent fractional shares of Common Stock upon the exercise
or exchange of Rights. In
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lieu of such fractional shares of Common Stock, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock (as determined in accordance with Section 14(a) for the Trading Day
immediately prior to the date of such exercise or exchange.
(d) Waiver of Right to Receive Fractional Rights or Shares.
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 or
exchange of a Right (except as permitted by this Section 14).
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Section
18, are vested in the respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of the Common
Stock); and any registered holder of any Right Certificate (or prior to the
Distribution Date, of the Common Stock), without the consent of the Rights Agent
or of the holder of any other Right Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own benefit,
enforce this Agreement, and may institute and maintain any suit, action or
proceeding against the Company to enforce this Agreement, or otherwise enforce
or act in respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person (including, without limitation, the Company) subject to, 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, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) as of and after the Distribution Date, the Right
Certificates are transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer with all required certifications completed;
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
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(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided 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 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. 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 in
accordance with a fee schedule to be mutually agreed upon and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including, without limitation, the costs and expenses of defending
against any claim (whether asserted by the Company, a holder or any other
Person) of liability arising therefrom, directly or indirectly, including
reasonable attorney's fees and expenses.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Stock or the Common Stock or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, instruction, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed and executed by the proper Person or Persons.
The provisions of this Section 18 shall survive the expiration of the
Rights and the termination of this Agreement.
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SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to all or substantially
all of the stock transfer or corporate trust powers 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 Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, (and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent) upon the following terms and conditions, by all of which the Company and
the holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) Legal Counsel. The Rights Agent may consult with legal
counsel selected by it (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Certificates as to Facts or Matters. Whenever in the
performance of its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
any one of the Chief Executive Officer, the President, any Vice President, the
Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
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(c) Standard of Care. The Rights Agent shall be liable
hereunder only for its own gross negligence, bad faith or willful misconduct.
(d) Reliance on Agreement and Right Certificates. 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 as to
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) No Responsibility as to Certain Matters. 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 11(a)(ii)) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3, 11,
13, 23 or 27, or the ascertaining of the existence of facts that would require
any such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after the Rights Agent's receipt of actual
notice of any such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Stock or other securities to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Stock will, when issued, be validly authorized and issued, fully paid
and nonassessable; nor shall the Rights Agent be responsible for the legality of
the terms hereof in its capacity as an administrative agent.
(f) Further Assurances by Company. 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) Authorized Company Officers. The Rights Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from any one of the Chief Executive Officer, the
President, any Vice President, the Secretary, the Treasurer or any Assistant
Treasurer or Assistant Secretary of the Company, and to apply to such officers
for advice or instructions in connection with its duties under this Agreement,
and it shall not be liable for any action taken or suffered by it in good faith
in accordance with instructions of any such officer or for any delay in acting
while waiting for these 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 and/or after which such action shall
be taken or such omission shall be effective. The Rights Agent shall not be
liable for any action taken by, or omission of, the Rights Agent in accordance
with a proposal included in such application on or after the date specified in
such application (which date shall not be less than three Business Days after
the date any officer of the Company actually receives such application, unless
any such officer shall
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have consented in writing to any 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) Freedom to Trade in Company Securities. 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 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) Reliance on Attorneys and Agents by Rights Agent. 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 or any such attorneys or agents or for any
loss to the Company resulting from any such act, omission, default, neglect or
misconduct, provided that reasonable care was exercised in the selection and
continued employment thereof.
(j) Incomplete Certificate. If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise or transfer, the
certificate contained in the form of assignment or the form of election to
purchase set forth on the reverse thereof, as the case may be, has not been
completed to certify that the holder is not an Acquiring Person (or an Affiliate
or Associate thereof), the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company.
(k) Rights Holders List. At any time and from time to time
after the Distribution Date, upon the request of the Company, the Rights Agent
shall promptly deliver to the Company a list, as of the most recent practicable
date (or as of such earlier date as may be specified by the Company), of the
holders of record of Rights.
(l) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(m) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement if such
acts or omissions are in reliance upon (i) the proper execution of the
certification concerning beneficial ownership appended to the form of assignment
and the form of election to purchase attached hereto unless the Rights Agent
shall have actual knowledge that, as executed, such certification is untrue, or
(ii) the non-execution of such certification including, without limitation, any
refusal to honor any otherwise permissible assignment or election by reason of
such non-execution.
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(n) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership which would prohibit the exercise or transfer
of the Right Certificates.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company. Following the
Distribution Date, the Company shall promptly notify the holders of the Right
Certificates by first-class mail of any such resignation. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock and/or Preferred Stock, as applicable,
by registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the Rights Agent or any registered holder of any Right Certificate may, at
the expense of the Company, 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 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, having an office in the State of New York, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. 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 or any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and/or Preferred Stock, as applicable, and, following the
Distribution Date, mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind of class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
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In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon exercise, conversion or exchange of
securities hereinafter 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 adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION.
(a) Right to Redeem. The Board of Directors of the Company
may, at its option, at any time prior to a Trigger Event, redeem all but not
less than all of the then outstanding Rights at a redemption price of $.001 per
Right, appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price"), and
the Company may, at its option, pay the Redemption Price either in shares of its
Common Stock (valued at their Current Market Price as defined in Section 11(d)
on the date of redemption), cash or any other form of consideration deemed
appropriate by the Board of Directors. The redemption of the Rights by the Board
of Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(b) Redemption Procedures. Immediately upon the action of the
Board of Directors of the Company ordering the redemption of the Rights (or at
such later time as the Board of Directors may establish for the effectiveness of
such redemption), and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right. The
Company shall promptly give public notice, with simultaneous written notice to
the Rights Agent, of any redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of such
redemption. The Company shall promptly give, or cause the Rights Agent to give,
notice of such redemption to all such holders of the then outstanding Rights by
making such notice at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of 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 in Section 24 hereof, and other than in connection with the
purchase, acquisition or redemption of Common Stock prior to the Distribution
Date.
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SECTION 24. EXCHANGE.
(a) Exchange of Common Stock for Rights after a Trigger Event.
The Board of Directors of the Company may, at its option, at any time after the
occurrence of a Trigger Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii), for shares of Common Stock at
an exchange ratio of one share of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the company, any employee benefit plan of
the Company or any such subsidiary, or any entity holding Common Stock for or
pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(b) Exchange Procedures. Immediately upon the action of the
Board of Directors of the Company ordering the exchange of any Rights pursuant
to paragraph (a) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 11(a)(ii)), held by each holder of Rights.
(c) Substitution of Preferred Stock for Common Stock. In any
exchange pursuant to this Section 24, the Company, at its option, may substitute
shares of Preferred Stock (or Equivalent Preferred Stock, as such term is
defined in Section 11(b) hereof) for shares of Common Stock exchangeable for the
Rights, at the initial rate of one one-thousandth of a share of Preferred Stock
(or Equivalent Preferred Stock) for each share of Common Stock, as appropriately
adjusted to reflect adjustments in the dividend rights of the Preferred Stock
pursuant to the terms thereof.
(d) Insufficient Shares. In the event that there shall not be
sufficient shares of Common Stock or Preferred Stock issued, but not
outstanding, (e.g., treasury stock) or authorized but unissued, to permit any
exchange of Rights as contemplated in accordance with this Section 24 or that
any regulatory actions or approvals are required in connection therewith, the
Company shall take all such action as may be necessary to authorize additional
Common Stock or Preferred Stock for issuance upon exchange of the Rights.
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(e) No Fractional Shares. The Company shall not be required to
issue fractional shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of Common Stock would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of this
paragraph 24(e), the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock (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), (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, (iii) to effect any reclassification of Preferred Stock (other than a
reclassification involving only the subdivision of outstanding Preferred Stock),
(iv) to effect any consolidation or merger into or with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(n)), or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of 50% or more of the assets or earning power of the 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 Section 11(n), hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to the Rights Agent and to each holder of a Right, in accordance with
Section 26, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or Rights,
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 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 20 days prior to the record date
for determining holders of the Preferred Stock for purposes of such action, and
in the case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Preferred Stock, whichever shall be the earlier.
(b) In case any event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give to
the Rights Agent and to each holder of a Right, to the extent feasible and in
accordance with Section 26, a notice of the occurrence of such event, which
notice shall describe the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) and all references in the preceding paragraph to
Preferred Stock shall be deemed to hereafter refer to Common Stock and/or other
securities, as the case may be.
Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date a filing by the Company with the Securities and Exchange
Commission shall
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constitute sufficient notice to the holders of securities of the Company,
including the Rights, for purposes of this Agreement and no other notice need be
given.
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, or overnight courier service addressed (until another
address is filed in writing with the Rights Agent) as follows:
Xxxxx Realty Investors, Inc.
00000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
Subject to the provisions of Section 21 hereof, 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, or overnight courier service
addressed (until another address is filed in writing with the Company) as
follows:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Stock Transfer Administration
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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid, or
overnight courier service addressed to such holder at the address of such holder
as shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. For so long as the Rights are
redeemable, the Company may from time to time, in its sole and absolute
discretion, supplement or amend this Agreement without the approval of any
holders of Rights or Common Stock. From and after the date that the Rights are
no longer redeemable, the Company may, and the Rights Agent shall, if the
Company so directs, from time to time, supplement or amend this Agreement
without the approval of any holders of Rights (i) to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or (ii) to make any other changes
or provisions with respect to the Rights which the Company may deem necessary or
desirable, any such supplement or amendment to be evidenced by a writing signed
by the Company and the Rights Agent; provided, however, that from and after the
occurrence of a Trigger Event, this Agreement shall not be amended in any manner
which would adversely affect the interests of the holders of Rights. Without
limiting the foregoing, the Company may at any time prior to the occurrence of a
Trigger Event amend this Agreement to lower the thresholds set forth in Sections
1(a) and 3(a) to not less than the greater of (i) any percentage greater than
the largest percentage of the outstanding Common Stock then known by the Company
to be beneficially owned by any Person (other than (a) the Company, (b) any
Subsidiary of the Company, (c) any employee benefit plan of
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the Company or any Subsidiary of the Company, (d) any entity holding Common
Stock for or pursuant to the terms of any such plan, or (e) any Exempt Person)
and (ii) 10%. Upon the delivery of a 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, the Rights Agent shall execute such
supplement or amendment. 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.
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. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, registered holders of the Common Stock).
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
SECTION 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Michigan and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State, provided, however, that the rights and
obligations of the Rights Agent shall be governed by and construed in accordance
with the laws of the State of New York.
SECTION 32. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. 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 (i) to interpret the
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provisions of this Agreement, and (ii) to make all determinations deemed
necessary or advisable for the administration of this 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 of the Company 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 the Board of
Directors of the Company or any member thereof to any liability to the holders
of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
Xxxxx Realty Investors, Inc.
By
---------------------------
Title:
--------------
The Bank of New York, as Rights Agent
By
---------------------------
Title:
--------------
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EXHIBIT A
CERTIFICATE OF DESIGNATIONS, PREFERENCES, AND RIGHTS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
Xxxxx Realty Investors, Inc.
(Pursuant to Section 302(4) of the
Michigan Business Corporation Act)
---------------------------
Xxxxx Realty Investors, Inc., a Michigan corporation (the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation pursuant to Section 302(4) of the
Michigan Business Corporation Act at a meeting duly called and held on January
15, 1999:
RESOLVED, that pursuant to the authority granted and vested in the
Board of Directors of the Corporation in accordance with the Corporation's
Amended and Restated Articles of Incorporation, the Board of Directors hereby
creates a series of Preferred Stock, par value $.01 per share, of the
Corporation and hereby states the designation and number of shares, and hereby
fixes the voting powers, preferences and relative, participating, optional and
other special rights thereof and the qualifications, limitations or restrictions
thereof (in addition to the provisions set forth in the Amended and Restated
Articles of Incorporation of the Corporation which are also applicable to all
classes and series of the Preferred Stock), in the form set forth below.
Series A Junior Participating Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 20,000, and such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS. (A) 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
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Series A Preferred Stock, in preference to the holders of Common Stock, par
value $.01 per share (the "Common Stock") of the Corporation, and of any other
stock ranking junior to the Series A Preferred 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 date of
each quarterly payment of a dividend with respect to the Common Stock or if no
such dividend is paid in any quarter 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 provision for adjustment
hereinafter set forth, 1000 times the aggregate per share amount of all cash
dividends, and 1000 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. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or 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 to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the 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 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.
(C) 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, 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
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such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 1000 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or 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) then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, 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 quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on 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, 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
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on the Series A Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (both as to dividends and upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock; except in accordance with
a purchase offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 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 cancelled 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
subject to the conditions and restrictions on issuance set forth herein, in the
Company's Amended and Restated Articles of Incorporation, or in any other
Certificate of Designations creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
liquidation, dissolution or winding up of the Corporation, voluntary or
otherwise, no distribution shall be made (1) 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 per share
(the "Series A Liquidation Preference") equal to $1000 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive, if greater than $1000 per
share, an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of 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 distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon
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such liquidation, dissolution or winding up. In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or 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 to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) 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 are
outstanding immediately prior to such event.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other classes and series of stock of the
Corporation, if any, that rank on a parity with the Series A Preferred Stock in
respect thereof, then the assets available for such distribution shall be
distributed ratably to the holders of the Series A Preferred Stock and the
holders of such parity shares in proportion to their respective liquidation
preferences.
(C) Neither the merger or consolidation of the Corporation into or with
another corporation nor the merger or consolidation of any other corporation
into or with 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 each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or 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. NO REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable by the Company.
SECTION 9. RANK. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding
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up, junior to all series of any other class of the Corporation's Preferred Stock
unless the terms of any such series shall provide otherwise.
SECTION 10. AMENDMENT. At any time any shares of Series A Preferred
Stock are outstanding, the Amended and Restated Articles of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred
Stock, as set forth herein, so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of Series A Preferred Stock, voting together as a single class.
SECTION 11. FRACTIONAL SHARES. Series A Preferred Stock may be issued
in fractions of a share that 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 Series A Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its President and attested by its Secretary this
15th day of January, 1999.
---------------------------------
President
Attest:
-------------------------------
Secretary
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EXHIBIT B
Form of Right Certificate
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER JANUARY 15, 2009 OR EARLIER IF
REDEMPTION OR EXCHANGE IS GIVEN OR IF THE COMPANY IS
MERGED OR ACQUIRED PURSUANT TO AN AGREEMENT OF THE
TYPE DESCRIBED IN SECTION 11(d)(ii)(A)(2) OF THE
RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11(a)(ii)
OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED
BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS DEFINED
IN THE AGREEMENT), or any subsequent holder of such
rights will become null and void and will no longer
be transferable.
Right Certificate
XXXXX REALTY INVESTORS, 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 Rights Agreement, dated as of January 15, 1999, as the same may be amended
from time to time (the "Rights Agreement"), between Xxxxx Realty Investors,
Inc., a Michigan corporation (the "Company"), and The Bank of New York, a New
York banking corporation (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date and prior to 5:00 P.M., New York time, on
January 15, 2009 at the principal offices of the Rights Agent, or at the office
of its successor as Rights Agent, designated for such purpose, one
one-thousandth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred Stock"),
of the Company, at a purchase price of $42.00 per one one-thousandth of a share
of Preferred Stock, subject to adjustment (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and certification duly executed. The number of Rights represented by
this Rights Certificate and the number of one one-thousandths of a share of
Preferred Stock which may be purchased upon exercise thereof set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
January 15, 1999, based on the Preferred Stock as constituted at such date.
Capitalized terms used in this Right Certificate without definition shall have
the meanings ascribed to them in
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the Agreement. As provided in the Rights Agreement, the Purchase Price and the
number of one one-thousandths of a share of Preferred Stock 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. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the offices of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of one one-thousandths of a share of Preferred Stock as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.001 per Right or (ii) may be exchanged in whole or in part for Preferred Stock
or, in certain circumstances, shares of the Company's Common Stock, par value
$.01 per share.
No fractional Preferred Stock will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions of Preferred Stock 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 depository receipts),
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred Stock
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, 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 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.
If any term, provision, covenant or restriction of the Rights 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 the Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
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This Right Certificate shall not be valid or binding for any purpose
until it shall have been countersigned by an authorized signatory of the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
ATTEST: Xxxxx Realty Investors, Inc.
_________________________________ By: _____________________________________
Its: President
Countersigned:
The Bank of New York, as Rights Agent
By: ____________________________
Authorized Signatory
Date: __________________________
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[Form of Reserve 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)
________________________________________________________________________________
Rights evidenced by 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:
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.
The undersigned hereby certifies that:
(1) the Rights represented by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person or an
Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned did not acquire the Rights represented by this Right Certificate
from any person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.
Dated: __________________________
__________________________
Signature
________________________________________________________________________________
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[Form of Reverse Side of Right Certificate - continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: Xxxxx Realty Investors, Inc.
The undersigned hereby irrevocably elects to exercise
________________________ Rights represented by this Right Certificate to
purchase the Preferred Stock issuable upon the exercise of such Rights and
requests that certificates for such Preferred Stock be issued in the name of:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security number or other identifying number)
Dated: ______________________________
___________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an "eligible guarantor institution" as
define in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as
amended.
________________________________________________________________________________
The undersigned hereby certifies that:
(1) the Rights represented by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person or an
Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned did not acquire the Rights represented by this Right Certificate
from any person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.
Dated: ____________________________
___________________________________
Signature
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[Form of Reverse Side of Right Certificate - continued]
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform exactly to the name as written upon
the face of this Right Certificate, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or election to purchase will not be honored.
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EXHIBIT C
SUMMARY OF TERMS OF RIGHTS PLAN
ISSUANCE OF RIGHTS: On January 15, 1999, the Board of Directors of the Company
declared a dividend of one preferred share purchase right (a "Right") for each
share of the Company's Common Stock outstanding at the close of business on
January 15, 1999. Until the Distribution Date, all future issuances of Common
Stock will also include issuances of Rights.
DESCRIPTION OF RIGHTS: The Rights are not exercisable unless and until the
Distribution Date (as defined below) occurs. When exercisable, each Right will
entitle the holder to purchase for 42.00 (the "Purchase Price") 1/1000th of a
share of a new series of the Company's preferred stock, Series A Junior
Participating Preferred Stock. In general, if a person intentionally acquires
15% or more of the Company's common stock, a "flip-in" event occurs and each
Right (other than those held by the acquiring person) entitles the holder to
purchase for the Purchase Price ADDITIONAL COMMON STOCK of the Company WITH A
MARKET VALUE OF TWICE THE PURCHASE PRICE OF THE RIGhT.
SERIES A PARTICIPATING PREFERRED STOCK: 1/1000th of a share of the Series A
Preferred Stock will be comparable to one share of the Company's Common Stock.
DISTRIBUTION DATE: Each Right will separate from the Common Stock and become
exercisable on the tenth day after a person or group (i) acquires beneficial
ownership of 15% or more of the Company's Common Stock, or (ii) announces a
tender or exchange offer, the consummation of which would result in the person
owning 15% or more of the Company's Common Stock. The date on which either event
described in (i) or (ii) occurs is a Distribution Date.
TRANSFER OF RIGHTS; RIGHTS CERTIFICATE: Until the Distribution Date, the Rights
will be evidenced by and trade with the Common Stock. After the Distribution
Date, the Company will mail Right Certificates to the Company's shareholders,
and the Rights can be transferred independently of the Common Stock.
FLIP-IN EVENT: If a person or group intentionally acquires 15% or more of the
Company's outstanding Common Stock, then each Right (except for those held by
the acquiring person) "FLIPS IN" and entitles the holder to purchase, for the
Purchase Price, a number of shares of the Company's Common Stock having a market
value of twice the Purchase Price. In other words, the Rights holders, other
than the acquiring person, may purchase Common Stock at a 50% discount.
FLIP-OVER EVENT: If after a person or group acquires 15% or more of the
Company's outstanding Common Stock, (a) the Company merges into another entity,
(b) the acquiring entity merges into the Company, or (c) the Company sells 50%
or more of its assets or earning power, then each Right (other than those held
by the acquiring person) entitles a holder to purchase, for the Purchase Price,
the number of shares of common stock of the
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acquiring company having a market value of twice the Purchase Price.
EXCHANGE OF RIGHTS FOR COMMON STOCK: At any time after the acquisition by a
person or group of persons of 15% or more of the Company's outstanding Common
Stock and before the acquisition by a person or group of 50% or more of the
Company's outstanding Common Stock, the board of directors, may exchange the
Rights (other than Rights owned by the acquiring person), for the Company's
Common Stock, in whole or in part, at an exchange rate of one share of Common
Stock per Right (subject to adjustment).
REDEMPTION: The Rights are redeemable by the Company at a price of $.001 per
Right at any time prior to the earlier of a flip-in event or the expiration of
the Rights.
VOTING: The Rights do not have any voting rights.
ANTI-DILUTION PROVISIONS: The Rights have the benefit of certain customary
anti-dilution provisions.
EXPIRATION OF RIGHTS: The Rights will expire on the earliest of (a) January 15,
2009 or (b) the date of exchange or redemption of the Rights as described above.
TAXES: The Rights distribution should not be taxable for federal income tax
purposes.
AMENDMENT OF RIGHTS AGREEMENT: While the Rights are redeemable, the Rights
Agreement may be amended in any respect by the Company's board of directors.
After the Rights are no longer redeemable, the Company may amend or supplement
the Rights Agreement in any manner that does not adversely affect the interests
of the holders of the Rights.
The foregoing is a summary of certain principal terms of the Rights
Agreement and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference. A copy of the Rights Agreement has
been filed with the Securities and Exchange Commission and is also available
free of charge from the Company.
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