EXHIBIT 4.10
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Unitrin, Inc.
and
First Chicago Trust Company of New York, as Rights Agent
RIGHTS AGREEMENT
DATED AS OF AUGUST 3, 1994
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions.........................................1
Section 2. Appointment of Rights Agent.................................5
Section 3. Issuance of Right Certificates..............................5
Section 4. Form of Right Certificate...................................7
Section 5. Countersignature and Registration...........................7
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates..........................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights...................................................9
Section 8. Cancellation and Destruction of Right Certificates.........11
Section 9. Reservation and Availability of Preferred Shares...........11
Section 10. Preferred Shares Record Date...............................12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights........................................13
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares.....................................................19
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power...........................................20
Section 14. Fractional Rights and Fractional Shares....................22
Section 15. Rights of Action...........................................24
Section 16. Agreement of Right Holders.................................24
Section 17. Right Certificate Holder Not Deemed a Stockholder..........25
Section 18. Concerning the Rights Agent................................25
Section 19. Merger or Consolidation or Change of Name of Rights
Agent......................................................26
Section 20. Duties of Rights Agent.....................................26
Section 21. Change of Rights Agent.....................................28
Section 22. Issuance of New Right Certificates.........................29
Section 23. Redemption and Termination.................................30
Section 24. Notice of Certain Events...................................31
Section 25. Miscellaneous..............................................32
Section 26. Exchange...................................................34
RIGHTS AGREEMENT
This RIGHTS AGREEMENT (this "Agreement") is made as of this third
day of August 1994 by and between Unitrin, Inc., a Delaware corporation
(the "Corporation"), and First Chicago Trust Company of New York (the
"Rights Agent"), with respect to the following facts and circumstances. A.
The Board of Directors of the Corporation has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Corporation outstanding at the Close
of Business (as hereinafter defined) on August 17, 1994 (the "Record
Date"), each Right representing the right to purchase one one-thousandth
(1/1000th) of a Preferred Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth. B. The Board of Directors
of the Corporation has further authorized and directed the issuance of one
Right with respect to each Common Share that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date (as such terms are hereinafter
defined); provided, however, that Rights may be issued with respect to
Common Shares that shall become outstanding after the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration Date
in accordance with the provisions of Section 22 of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions.
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For purposes of this Agreement, the following terms have the
meanings indicated:
1.1 "Acquiring Person" means any Person who or which, together
with all Affiliates and Associates of such Person, without the prior
approval of the Corporation, shall be the Beneficial Owner of 15% or more
of the then outstanding Common Shares (other than as a result of a
Permitted Offer) or was such a Beneficial Owner at any time after the date
hereof, whether or not such person continues to be the Beneficial Owner of
15% or more of the then outstanding Common Shares. Notwithstanding the
foregoing: (A) the term "Acquiring Person" shall not include (i) the
Corporation, (ii) any Subsidiary of the Corporation, (iii) any employee
benefit plan of the Corporation or of any Subsidiary of the Corporation,
(iv) any Person or entity organized, appointed or established by the
Corporation for or pursuant to the terms of any such plan, or (v) any
Person who or which, together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 15% or more of the then outstanding
Common Shares as a result of the acquisition of Common Shares directly from
the Corporation; and (B) no Person shall be deemed to be an "Acquiring
Person" either (i) as a result of the acquisition of Common Shares by the
Corporation which, by reducing the number of Common Shares outstanding,
increases the proportional number of shares beneficially owned by such
Person together with all Affiliates and Associates of such Person;
provided, however, that if (X) a Person would become an Acquiring Person
(but for the operation of this subclause (B) (i)) as a result of the
acquisition of Common Shares by the Corporation, and (Y) after such share
acquisition by the Corporation, such Person, or an Affiliate or Associate
of such Person, becomes the Beneficial Owner of any additional Common
Shares, then such Person shall be deemed an Acquiring Person, or (ii) if
(X) within eight (8) days after such Person would otherwise have become an
Acquiring Person (but for the operation of this subclause (ii)), such
Person notifies the Board of Directors that such Person did so
inadvertently and (Y) within two (2) days after such notification, such
Person is the Beneficial Owner of less than 15% of the outstanding Common
Shares.
1.2 "Act" means the Securities Act of 1933, as amended and as in
effect on the date of this Agreement.
1.3 "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act.
1.4 A Person is the "Beneficial Owner" of and "beneficially owns"
any securities which:
1.4.1 such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
1.4.2 such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement, arrangement
or understanding, or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner
of, or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security 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 promulgated under the
Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act for any comparable or successor report); or
1.4.3 are beneficially owned, directly or indirectly, by any other
Person (or any Affiliate or Associate thereof) with which such Person (or
any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding relating to the acquisition, holding, voting
(except to the extent contemplated by the proviso to subpart (B) of Section
1.4.2), or disposing of any securities of the Corporation.
Notwithstanding anything in this Section 1.4 to the contrary, the
phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Corporation, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which
such Person would be deemed to own beneficially hereunder.
Notwithstanding anything in this Section 1.4 to the contrary, no
Person shall be deemed to beneficially own any securities solely by reason
of such Person being a party to a customary agreement pursuant to which
such Person acts or agrees to act as an underwriter with respect to a bona
fide public offering of securities.
No decision reached, or action taken, by the Board of Directors of
the Corporation or any committee thereof shall cause any Person (or any
Affiliate or Associate of such Person) who is a member of the Board of
Directors of the Corporation or such committee to be deemed, for the
purposes of this Agreement, to be a Beneficial Owner of any securities
beneficially owned by any other Person (or any Affiliate or Associate of
such Person) who is a member of the Board of Directors of the Corporation
or any committee thereof solely by reason of such membership of the Board
of Directors or any committee thereof or participation in the decisions or
actions thereof on the part of either or both of such Persons.
1.5 "Business Day" means any day other than a Saturday, Sunday or
United States federal holiday.
1.6 "Close of Business" on any given date means 5:00 P.M., New
York time, on such date; provided, however, that if such date is not a
Business Day it means 5:00 P.M., New York time, on the next succeeding
Business Day.
1.7 "Common Shares" when used with reference to the Corporation
means the shares of Common Stock, par value $.10 per share, of the
Corporation or, in the event of a subdivision, combination or consolidation
with respect to such shares of Common Stock, the shares of Common Stock
resulting from such subdivision, combination or consolidation. "Common
Shares" when used with reference to any Person other than the Corporation
means the capital 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.
1.8 "Distribution Date" has the meaning set forth in Section 3 hereof.
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1.9 "Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement.
1.10 "Exchange Ratio" has the meaning set forth in Section 26.1
hereof.
1.11 "Final Expiration Date" has the meaning set forth in Section
7 hereof.
1.12 "Interested Stockholder" means any Acquiring Person or any
Affiliate or Associate of an Acquiring Person or any other Person in which
any such Acquiring Person, Affiliate or Associate has an interest, or any
other Person acting directly or indirectly on behalf of or in concert with
any such Acquiring Person, Affiliate or Associate.
1.13 "Permitted Offer" means a tender or exchange offer which is
for all outstanding Common Shares of the Corporation at a price and on
terms determined, prior to the purchase of shares under such tender or
exchange offer, by at least a majority of the members of the Board of
Directors who are not officers of the Corporation and who are not Acquiring
Persons or Affiliates, Associates, nominees or representatives of an
Acquiring Person, to be adequate (taking into account all factors that such
Directors deem pertinent including, without limitation, prices that could
reasonably be achieved if the Corporation or its assets were sold on an
orderly basis designed to realize maximum value) and otherwise in the best
interests of the Corporation, its stockholders (other than the Person or
any Affiliate or Associate thereof on whose basis the offer is being made)
and other relevant constituencies, taking into account all factors that
such directors may deem pertinent including, without limitation, those
factors described in Article Eight of the Corporation's Certificate of
Incorporation.
1.14 "Person" means any individual, firm, partnership,
corporation, trust, association, joint venture or other entity, and
includes any successor (by merger or otherwise) of such entity.
1.15 "Preferred Shares" means shares of the Corporation's Series A
Preferred Stock, par value $.10 per share, having the relative rights,
preferences and limitations set forth in the Form of the Certificate of
Designation, Preferences and Rights of Series A Preferred Stock attached to
this Agreement as Exhibit A.
1.16 "Purchase Price" has the meaning set forth in Section 4
hereof.
1.17 "Redemption Date" has the meaning set forth in Section 7
hereof.
1.18 "Right Certificate" has the meaning set forth in Section 3.1
hereof.
1.19 "Section 11.1.2 Event" means any event described in Section
11.1.2 hereof.
1.20 "Section 13 Event" means any event described in clause (x),
(y) or (z) of Section 13.1 hereof.
1.21 "Shares Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to the Exchange Act) by the
Corporation or an Acquiring Person that an Acquiring Person has become
such; provided that, if such Person is determined not to have become an
Acquiring Person pursuant to clause (B) (ii) of Section 1.1 hereof, then no
Shares Acquisition Date shall be deemed to have occurred.
1.22 "Subsidiary" of any Person means any corporation or other
Person of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
1.23 "Triggering Event" means any Section 11.1.2 Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent.
2.1 The
Corporation hereby appoints the Rights Agent to act as agent for the
Corporation and the holders of the Rights (who, in accordance with Section
3 hereof, shall prior to the Distribution Date also be the holders of
Common Shares) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Corporation may from time
to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issuance of Right Certificates.
3.1 Until the earlier of (i) the Shares Acquisition Date or (ii)
the Close of Business on the tenth (10th) day (or such later date as may be
determined by action of the Corporation's Board of Directors) after the
date of the commencement by any Person (other than the Corporation, any
Subsidiary of the Corporation, any employee benefit plan of the Corporation
or of any Subsidiary of the Corporation or any Person or entity organized,
appointed or established by the Corporation for or pursuant to the terms of
any such plan) of, or after the date of the first public announcement of
the intention of any Person (other than the Corporation, any Subsidiary of
the Corporation, any employee benefit plan of the Corporation or of any
Subsidiary of the Corporation or any Person or entity organized, appointed
or established by the Corporation for or pursuant to the terms of any such
plan) to commence (which intention to commence remains in effect for five
(5) Business Days after such announcement), a tender or exchange offer the
consummation of which would result in any Person becoming an Acquiring
Person (including, in the case of both (i) and (ii), any such date which is
after the date of this Agreement and prior to the issuance of the Rights)
(the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3.2 hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall
also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of the underlying Common
Shares (including a transfer to the Corporation); provided, however, that
if a tender offer is terminated prior to the occurrence of a Distribution
Date, then no Distribution Date shall occur as a result of such tender
offer. As soon as practicable after the Distribution Date, the Corporation
will prepare and execute, the Rights Agent will countersign, and the
Corporation will send or cause to be sent by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the Close of Business on
the Distribution Date, at the address of such holder shown on the records
of the Corporation, a Right Certificate, substantially in the form of
Exhibit B hereto (a "Rights Certificate"), evidencing one Right for each
Common Share so held. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
3.2 As promptly as practicable following the Record Date, the
Corporation will send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Corporation. With
respect to certificates for Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with a
copy of the Summary of Rights attached thereto. Until the Distribution Date
(or the earlier of the Redemption Date or the final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on
the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with
such Common Shares.
3.3 Certificates for Common Shares that become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this Section 3.3) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date, shall be deemed also to be certificates for Rights, and
shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights
Agreement between Unitrin, Inc. and First Chicago Trust
Company of New York, as Rights Agent, dated as of August
3, 1994 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of
Unitrin, Inc. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by
this certificate. Unitrin, Inc. will mail to the holder
of this certificate a copy of the Rights Agreement
without charge after receipt of a written request
therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights
Agreement) and certain related persons, whether currently
held by or on behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Corporation purchases or
acquires any Common Shares after the Record Date but prior to the
Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), any Rights associated with such Common Shares shall be
deemed cancelled and retired so that the Corporation shall not be entitled
to exercise any Rights associated with the Common Shares that are no longer
outstanding.
Section 4. Form of Right Certificate.
4.1 The Right Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate and as
are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the
Right Certificates shall entitle the holders thereof to purchase such
number of one one-thousandths (1/1000ths) of a Preferred Share as shall be
set forth therein at the price per one one-thousandth (1/1000th) of a
Preferred Share set forth therein (the "Purchase Price"), but the amount
and type of securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
4.2 Any Right Certificate issued pursuant to Section 3.1 or
Section 22 hereof that represents Rights that are null and void pursuant to
Section 7.6 of this Agreement, and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Right Certificate and the
Rights represented hereby are null arid void.
Provisions of Section 7.6 of this Agreement shall be operative whether or not
the foregoing legend is contained on any such Right Certificate.
Section 5. Countersignature and Registration..
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5.1 The Right Certificates shall be executed on behalf of the
Corporation by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents, or its Treasurer, either manually or
by facsimile signature, shall have affixed thereto the Corporation's seal
or a facsimile thereof, and shall be attested by the Secretary or an
Assistant Secretary of the corporation, either manually or by facsimile
signature. The Right Certificates shall be countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In
case any officer of the Corporation who shall have signed any of the Right
Certificates shall cease to be such officer of the Corporation before
countersignature by the Rights Agent and issuance and delivery by the
Corporation, such Right Certificates may nevertheless be countersigned by
the Rights Agent and issued and delivered by the Corporation with the same
force and effect as though the person who signed such Right Certificates
had not ceased to be such officer of the Corporation; and any Right
Certificate may be signed on behalf of the Corporation by any person who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Corporation to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such person was
not such an officer.
5.2 Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender or transfer of the Right Certificates,
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 the
face of each of the Right Certificates and the certificate number 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.
6.1 Subject to the provisions of Section 4.2, Section 7.6 and
Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the earlier
of the Redemption Date or the Final Expiration Date, any Right Certificate
or Right Certificates 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-thousandth
(1/1000th) of a Preferred Share (or, following a Triggering Event, other
securities, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the principal office or
offices of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Corporation shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate
until the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Corporation shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4.2, Section 7.6 and
Section 14 hereof, countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so
requested. The Corporation may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
6.2 Upon receipt by the Corporation and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Corporation's request, reimbursement to the Corporation and the
Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Corporation will make and deliver a new Right Certificate of
like tenor to the Rights Agent for countersignature and delivery to the
registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
7.1 Subject to Section 7.6 hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price for the total number of one one-thousandth
(1/1000th) of a Preferred Share (or other securities, as the case may be)
as to which such surrendered Rights are exercised, at or prior to the
earlier of (i) the Close of Business on August 3, 2004 (the "Final
Expiration Date"), or (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date").
7.2 The Purchase Price for each one one-thousandth (1/1000th) of a
Preferred Share pursuant to the exercise of a Right shall initially be
$125, shall be subject to adjustment from time to time as provided in the
next sentence and in Sections 11 and 13.1 hereof and shall be payable in
accordance with paragraph 7.3 below. Anything in this Agreement to the
contrary notwithstanding, in the event that at any time after the date of
this Agreement and prior to the Distribution Date, the Corporation shall
(i) declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case, each Common Share outstanding following such
subdivision, combination or consolidation shall continue to have a Right
associated therewith and the Purchase Price following any such event shall
be proportionately adjusted to equal the result obtained by multiplying the
Purchase Price immediately prior to such event by a fraction the numerator
of which shall be the total number of Common Shares outstanding immediately
prior to the occurrence of the event and the denominator of which shall be
the total number of Common Shares outstanding immediately following the
occurrence of such event. The adjustment provided for in the preceding
sentence shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is effected.
7.3 Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the
reverse side thereof duly executed, accompanied by payment of the Purchase
Price for the Preferred Shares (or other securities, as the case may be) 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
6 hereof by certified check, cashier's check or money order payable to the
order of the Corporation, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares certificates
for the number of Preferred Shares to be purchased, and the Corporation
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Corporation, in its sole discretion, shall have
elected to deposit the Preferred Shares issuable upon exercise of the
Rights hereunder into a depositary, requisition from the depositary agent
depositary receipts representing such number of one one-thousandths
(1/1000ths) of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the
Corporation will direct the depositary agent to comply with such requests,
(ii) when appropriate, requisition from the Corporation the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder, and (iv) when appropriate, after
receipt thereof, deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Corporation is
obligated to issue other securities (including Common Shares) of the
Corporation pursuant to Section 11.1 hereof, the Corporation will make all
arrangements necessary so that such other securities are available for
distribution by the Rights Agent, if and when appropriate.
7.4 in addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11.1.2, the Rights Agent shall return such Right
Certificate to the registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the rights represented by such Right
Certificate no longer include the rights provided by Section 11.1.2 of the
Rights Agreement and if less than all the Rights represented by such Right
Certificate were so exercised, the Rights Agent shall indicate on the Right
Certificate the number of Rights represented thereby that continue to
include the rights provided by Section 11.1.2.
7.5 In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof, or the Rights Agent shall place an
appropriate notation on the Right Certificate with respect to those Rights
exercised.
7.6 Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11.1.2 Event, any Rights
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate
of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
Affiliate or Associate thereof) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any Affiliate or Associate thereof) 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 a
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer that the Board of Directors of the
Corporation has determined is part of a plan, arrangement or understanding
that has as a primary purpose or effect the avoidance of this Section 7.6,
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Corporation
shall use all reasonable efforts to insure that the provisions of this
Section 7.6 and Section 4.2 hereof are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result
of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
7.7 Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Corporation shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless
such registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Corporation
shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
8.1 All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered
to the Corporation or to any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if surrendered to the
Rights Agent, shall be cancelled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by the provisions of
this Rights Agreement. The Corporation shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the
Corporation otherwise than upon the exercise thereof. The Rights Agent
shall deliver all cancelled Right Certificates to the Corporation, or
shall, at the written request of the Corporation, destroy such cancelled
Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Corporation.
Section 9. Reservation and Availability of Preferred Shares.
9.1 The Corporation covenants and agrees that, at all times prior
to the occurrence of a Section 11.1.2 Event, it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares, or
any authorized and issued Preferred Shares held in its treasury, the number
of Preferred Shares that will be sufficient to permit the exercise in full
of all outstanding Rights and, after the occurrence of a Section 11.1.2
event, shall, to the extent reasonably practicable, so reserve and keep
available a sufficient number of Common Shares (and/or other securities)
that may be required to permit the exercise in full of the Rights pursuant
to this Agreement.
9.2 So long as the Preferred Shares (and, after the occurrence of
a Section 11.1.2 Event, Common Shares or any other securities) issuable
upon the exercise of the Rights may be listed on any national securities
exchange, the Corporation 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 on such exchange upon official notice of
issuance upon such exercise.
9.3 The Corporation covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares (or
Common Shares and/or other securities, as the case may be) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such shares or other securities (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and nonassessable
shares or securities.
9.4 The Corporation covenants and agrees that it will pay when due
and payable any and all United States federal and state transfer taxes and
charges that may be payable in respect of the issuance or delivery of the
Right Certificates or of any Preferred Shares (or Common Shares and/or
other securities, as the case may be) upon the exercise of Rights. The
Corporation shall not, however, be required to pay any transfer tax that
may be payable in respect of any transfer or delivery of Right Certificates
to a person other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Shares (or Common Shares 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 to deliver any certificates or depositary receipts for
Preferred Shares (or Common Shares and/or other securities, as the case may
be) upon the exercise of any Rights, until any such tax shall have been
paid (any such tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to the
Corporation's reasonable satisfaction that no such tax is due.
9.5 The Corporation shall use its best efforts to (i) file, as
soon as practicable following the Shares Acquisition Date, a registration
statement under the Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act and the rules
and regulations thereunder) until the date of the expiration of the rights
provided by Section 11.1.2. The Corporation will also take such action as
may be appropriate under the blue sky laws of the various states.
Section 10. Preferred Shares Record Date.
10.1 Each person in whose name any certificate for Preferred
Shares (or Common Shares 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 Shares (or Common Shares
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 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 Shares (or Common Shares and/or other securities, as the case may
be) transfer books of the Corporation are closed, such person shall be
deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares (or Common Shares and/or other securities, as the case may
be) transfer books of the Corporation are open.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights.
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The Purchase Price, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
11.1 Adjustment Events.
11.1.1 In the event the Corporation shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred
Shares, (C) combine the outstanding Preferred Shares into a smaller number
of Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation), except as
otherwise provided in this Section 11.1 and Section 7.6 hereof, the
Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock that, if such Right
had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Corporation were open, such holder
would have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Corporation issuable upon exercise of one Right. If an
event occurs that would require an adjustment under both Section 11.1.1 and
Section 11.1.2, the adjustment provided for in this Section 11.1.1 shall be
in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11.1.2.
11.1.2 In the event any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person, then proper
provision shall be made so that each holder of a Right (except as provided
below and in section 7.6 hereof) shall, for a period of sixty (60) days (or
such longer period as the Board of Directors of the Corporation may
determine at any time prior to or during such period of sixty (60) days)
after the later of the occurrence of any such event or the effective date
of an appropriate registration statement under the Act pursuant to Section
3 hereof, have a right to receive, upon exercise thereof at a price equal
to the then current Purchase Price, in accordance with the terms of this
Agreement, such number of Common Shares (or, in the discretion of the Board
of Directors, one one-thousandths (1/1000ths) of a Preferred Share) as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandth (1/1000th) of a
Preferred Share for which a Right was exercisable immediately prior to the
first occurrence of a Section 11.1.2 Event, and (y) dividing that product
by 50% of the then current per share market price of the Corporation's
Common Shares (determined pursuant to Section 11.4 hereof) on the date of
such first occurrence (such number of shares being referred to as the
"Adjustment Shares"); provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to this Section
11.1.2.
11.1.3 In the event that there shall not be sufficient treasury
shares or authorized but unissued (and unreserved) Common Shares to permit
the exercise in full of the Rights in accordance with Section 11.1.2 and
the Rights become so exercisable (and the Board has determined to make the
Rights exercisable into fractions of a Preferred Share), notwithstanding
any other provision of this Agreement, to the extent necessary and
permitted by applicable law, each Right shall thereafter represent the
right to receive, upon exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, (x) a number of (or
fractions of) Common Shares (up to the maximum number of Common Shares that
may permissibly be issued) and (y) one one-thousandth (1/1000th) of a
Preferred Share or a number of, or fractions of, other equity securities of
the Corporation (or, in the discretion of the Board of Directors, debt)
that the Board of Directors of the Corporation has determined to have the
same aggregate current market value (determined pursuant to Section 11.1.1
and Section 11.1.2 hereof, to the extent applicable) as one Common Share
(such number of, or fractions of, Preferred Shares, debt or other equity
securities or debt of the Corporation being referred to as a "capital stock
equivalent"), equal in the aggregate to the number of Adjustment Shares;
provided, however, if sufficient Common Shares and/or capital stock
equivalents are unavailable, then the Corporation shall, to the extent
permitted by applicable law, take all such action as may be necessary to
authorize additional Common Shares or capital stock equivalents for
issuance upon exercise of the Rights, including the calling of a meeting of
stockholders; and provided, further, that if the Corporation is unable to
cause sufficient Common Shares and/or capital stock equivalents to be
available for issuance upon exercise in full of the Rights, then each Right
shall thereafter represent the right to receive the Adjusted Number of
Shares upon exercise at the Adjusted Purchase Price (as such terms are
hereinafter defined). As used herein, the term "Adjusted Number of Shares"
shall be equal to that number of (or fractions of) Common Shares (and/or
capital stock equivalents) equal to the product of (x) the number of
Adjustment Shares and (y) a fraction, the numerator of which is the number
of Common Shares (and/or capital stock equivalents) available for issuance
upon exercise of the Rights and the denominator of which is the aggregate
number of Adjustment Shares otherwise issuable upon exercise in full of all
Rights (assuming there were a sufficient number of Common Shares available)
(such fraction being referred to as the "Proration Factor"). The "Adjusted
Purchase Price" shall mean the product of the Purchase Price and the
Proration Factor. The Board of Directors may, but shall not be required to,
establish procedures to allocate the right to receive Common Shares and
capital stock equivalents upon exercise of the Rights among holders of
Rights.
11.2 In case the Corporation shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all
holders of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase
Preferred Shares (or shares having the same rights, privileges and
preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred shares
at a price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred Shares
or equivalent preferred shares) less than the then current per share market
price of the Preferred Shares (as determined pursuant to Section 11.4
hereof) 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 Preferred Shares outstanding on such record date
plus the number of Preferred Shares that the aggregate offering price of
the total number of Preferred Shares and/or equivalent preferred shares so
to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current per
share market price, and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of capital
stock of the Corporation issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall
be determined in good faith by the Board of Directors of the Corporation,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent. Preferred Shares owned by
or held for the account of the Corporation shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price that would then be in effect if
such record date had not been fixed.
11.3 In case the Corporation shall fix a record date for the
making of a distribution to all holders of the Preferred Shares (including
any such distribution made in connection with a consolidation or merger in
which the Corporation is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or subscription rights
or warrants (excluding those referred to in Section 11.2 hereof), the
Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then current
per share market price (as determined pursuant to Section 11.4 hereof) of
the Preferred Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Corporation,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share, and the
denominator of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Corporation to be
issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price that would then be in effect if such
record date had not been fixed.
11.4 Computation of "Current Per Share Market Price."
11.4.1 For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the purpose of
this Section 11.4.1) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days (as defined below) immediately prior to such date;
provided, however, that in the event that the current per share market
price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to the
expiration of thirty (30) Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current
per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing
price for each day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Security
is not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security
is not listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or such other system then in use, or, if on any such date
the Security is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Security selected by the Board of Directors of the
Corporation. If on any such date no such market maker is making a market in
the Security, the fair value of the Security on such date as determined in
good faith by the Board of Directors of the Corporation shall be used. The
term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading
is open for the transaction of business or, if the Security is not listed
or admitted to trading an any national securities exchange, a Business Day.
11.4.2 For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11.4.1. If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section 11.4.1
(appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof), multiplied by 1,000.
If neither the Common Shares nor the Preferred Shares are publicly held or
so listed or traded, "current per share market price" shall mean the fair
value per share as determined in good faith by the Board of Directors of
the Corporation, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent.
11.5 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 that by reason of this Section 11.5
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 one-thousandth (1/1000th)
of a Preferred Share or of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11.5, any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three (3) years from the date of the transaction that mandates such
adjustment or (ii) the Final Expiration Date.
11.6 If as a result of an adjustment made pursuant to Section
11.1.2 or Section 13.1 hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the
Corporation other than Preferred Shares, thereafter the number of other
shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Preferred Shares
contained in Section 11.1 through 11.3, inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall
apply on like terms to any such other shares.
11.7 All Rights originally issued by the Corporation subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one
one-thousandths (1/1000ths) of a Preferred Share purchasable from time to
time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
11.8 The Corporation may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one one-thousandths (1/1000ths) of a
Preferred Share purchasable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-thousandths (1/1000ths) of a
Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Corporation shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be
at least ten (10) days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11.8, the Corporation shall, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Corporation, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Corporation, new Right Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
11.9 Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths (1/1000ths) of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase
Price and the number of one one-thousandths (1/1000ths) of a Preferred
Share that were expressed in the initial Right Certificates issued
hereunder.
11.10 Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number
of one one-thousandths (1/1000ths) of a Preferred Share, Common Share or
other securities issuable upon exercise of the Rights, the Corporation
shall take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Corporation malt validly and legally issue such
number of fully paid and non-assessable one one-thousandths (1/1000ths) of
a Preferred Share, Common Share or other securities at such adjusted
Purchase Price.
11.11 In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Corporation may elect to defer until the occurrence
of such event the issuance to the holder of any Right exercised after such
record date the Preferred Shares, Common Shares or other securities of the
Corporation, if any, issuable upon such exercise over and above the
Preferred Shares, Common Shares or other securities of the Corporation, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Corporation
shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
11.12 Anything in this Section 11 to the contrary notwithstanding,
the Corporation shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this Section
11, as and to the extent that the Corporation in its sole discretion shall
determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash of
Preferred Shares at less than the current market price, (iii) issuance
wholly for cash of Preferred Shares or securities that by their terms are
convertible into or exchangeable for Preferred Shares, (iv) stock dividends
or iv) issuance of rights, options or warrants referred to in this Section
11, hereafter made by the Corporation to holders of its Preferred Shares
shall not be taxable to such holders.
11.13 The Corporation covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Corporation in a transaction that does not
violate Section 11.14 hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Corporation in a transaction that does not
violate Section 11.14 hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Corporation and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Corporation and/or
any of its Subsidiaries in one or more transactions each of which does not
violate Section 11.14 hereof), if (x) at the time of or immediately after
such consolidation, merger, sale or transfer, there are any charter or
bylaw provisions or any rights, warrants or other instruments or securities
outstanding or agreements in effect or other actions taken, that would
materially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger, sale or transfer, the stockholders of the
Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13.1 hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and
Associates. The Corporation shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Corporation and such
other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11.13.
11.14 The Corporation covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 25.2 hereof, take (or permit any Subsidiary to take) any action the
purpose of which is to, or if at the time such action is taken it is
reasonably foreseeable that the effect of such action is to, materially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
11.15 The exercise of Rights under Section 11.1.2 shall only
result in the loss of rights under Section 11.1.2 to the extent so
exercised and shall not otherwise affect the rights represented by the
Rights under this Agreement, including the rights represented by Section
13.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
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12.1 Whenever an adjustment is made as provided in Section 11 or
Section 13 hereof, the Corporation shall promptly (a) prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) file with the Rights Agent and with each transfer
agent for the Common Shares and the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25.1 hereof. 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 such
adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
--------------------------------------------
13.1 In the event that, on or following the Shares Acquisition
Date, directly or indirectly, (x) the Corporation shall consolidate with,
or merge with and into, any Interested Stockholder or, if in such merger or
consolidation all holders of Common Shares are not treated alike, any other
Person, (y) the Corporation shall consolidate with, or merge with, any
Interested Stockholder or, if in such merger or consolidation all holders
of Common Shares are not treated alike, any other Person, and the
Corporation shall be the continuing or surviving corporation of such
consolidation or merger (other than, in a case of any transaction described
in (x) or (y), a merger or consolation that would result in all of the
securities generally entitled to vote in the election of directors of the
Corporation ("voting securities") outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into securities of the surviving entity) all of the voting
securities of the Corporation or such voting surviving entity outstanding
immediately after such merger or consolidation and the holders of such
securities not having changed as a result of such merger or consolidation),
or (z) the Corporation shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to any Interested Stockholder or
Stockholders or, if in such transaction all holders of Common Shares are
not treated alike, any other Person (other than the Corporation or any
Subsidiary of the Corporation in one or more transactions each of which
does not violate Section 11.4 hereof), then, and in each such case (except
as provided in Section 13.4 hereof), proper provision shall be made so that
(i) each holder of a Right, except as provided in Section 7.6 hereof, shall
thereafter have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of freely
tradeable Common Shares of the Principal Party (as defined below), not
subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall equal the result obtained by (A) multiplying the
then current Purchase Price by the number of one one-thousandths
(1/1000ths) of a Preferred Share for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to
Section 11.1.2) and dividing that product by (B) 50% of the then current
per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11.4 hereof) on the date of consummation of
such Section 13 Event; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Corporation pursuant to this Agreement; (iii)
the term "Corporation" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; and (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares) in connection with the consummation
of any such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the exercise of
the Rights.
13.2 "Principal Party" shall mean:
13.2.1 in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13.1, the Person that is the issuer of
any securities into which Common Shares of the Corporation are converted in
such merger or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or consolidation (including,
if applicable, the Corporation if it is the surviving corporation); and
13.2.2 in the case of any transaction described in clause (z) of
the first sentence of Section 13.1, the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any of the foregoing cases, (1) if the Common
Shares of such Person are not at such time and have not been continuously
over the preceding twelve (12) month period registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Shares of which are and have been so registered,
"Principal Party" shall refer to such other Person; (2) in case such Person
is a Subsidiary, directly or indirectly, of more than one Person, the
Common Shares of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of
the Common Shares having the greatest aggregate market value; and (3) in
case 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 (1) and (2) above shall apply to
each of the chains of ownership having an interest in such joint venture as
if such party were a "Subsidiary" of both or all of such joint venturers
and the Principal Parties in each such chain shall bear the obligations set
forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
13.3 The Corporation shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of its authorized Common Shares that have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Corporation
and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in
Sections 13.1 and 13.2 and further providing that, as soon as practicable
after the date of any consolidation, merger, sale or transfer mentioned in
Section 13.1, the Principal Party at its own expense shall:
13.3.1 prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final Expiration Date;
13.3.2 use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the blue sky
laws of such jurisdictions as may be necessary or appropriate; and
13.3.3 deliver to holders of the Rights historical financial
statements for the Principal Party that comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. The
rights under this Section 13 shall be in addition to the rights to exercise
Rights and adjustments under Section 11.1.2 and shall survive any exercise
thereof.
13.4 Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in clauses
(x) and (y) of Section 13.1 if: (i) such transaction is consummated with a
Person or Persons who acquired Common Shares pursuant to a Permitted Offer
(or a wholly owned Subsidiary of any such Person or Persons); (ii) the
price per Common Share offered in such transaction is not less than the
price per Common Share paid to all holders of Common Shares whose shares
were purchased pursuant to such Permitted Offer; and (iii) the form of
consideration offered in such transaction is the same as the form of
consideration paid pursuant to such Permitted Offer. Upon consummation of
any such transaction contemplated by this Section 13.4, all Rights
hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
14.1 The Corporation shall not be required to issue fractions of
Rights or to distribute Right Certificates that 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 14.1, 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 Corporation. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Corporation shall
be used.
14.2 The corporation shall not be required to issue fractions of
Preferred Shares (other than fractions that are one one-thousandth
(1/1000th) or integral multiples of one one-thousandth (1/1000th) of a
Preferred Share) upon exercise of the Rights or to distribute certificates
that evidence fractional Preferred Shares (other than fractions that are
one one-thousandth (1/1000th) or integral multiples of one one-thousandth
(1/1000th) of a Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-thousandth (1/1000th) of a Preferred Share may, at the
election of the Corporation, be evidenced by depositary receipts, pursuant
to an appropriate agreement between the Corporation and a depositary
selected by it; provided that such agreement shall provide that the holders
of such depositary receipts shall have the rights, privileges and
preferences to which they are entitled as beneficial owners of the
Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not one one-thousandth (1/1000th) or
integral multiples of one one-thousandth (1/1000th) of a Preferred Share,
the Corporation shall pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one Preferred
Share. For the purposes of this Section 14.2, the current market value of a
Preferred Share shall be the closing price of a Preferred Share (as
determined pursuant to Section 11.4.2 hereof) for the Trading Day
immediately prior to the date of such exercise.
14.3 Following the occurrence of one of the transactions or events
specified in Section 11 giving rise to the right to receive Common Shares,
capital stock equivalents (other than Preferred Shares) or other securities
upon the exercise of a Right, the Corporation shall not be required to
issue fractions of shares or units of such Common Shares, capital stock
equivalents or other securities upon exercise of the Rights or to
distribute certificates that evidence fractions of such Common Shares,
capital stock equivalents or other securities. In lieu of fractional shares
or units of such Common Shares, capital stock equivalents or other
securities, the Corporation may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of a
share or unit of such Common Shares, capital stock equivalents or other
securities. For purposes of this Section 14.3, the current market value
shall be determined in the manner set forth in Section 11.4 hereof for the
Trading Day immediately prior to the date of such exercise and, if such
capital stock equivalent is not traded, each such capital stock equivalent
shall have the value of one one-thousandth (1/1000th) of a Preferred Share.
14.4 The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional share upon exercise of a Right (except as provided above).
Section 15. Rights of Action.
----------------
15.1 All rights of action in respect of this Agreement, excepting
the rights of action given to the Rights Agent under Section 18 hereof, are
vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the Common
Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), may, in his own behalf and
for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Corporation to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement. Nothing in this
Section 15 is intended to modify or limit the authority of the Board of
Directors under Section 25.3.
Section 16. Agreement of Right Holders.
--------------------------
Every holder of a Right, by accepting the same, consents and
agrees with the Corporation and the Rights Agent and with every other
holder of a Right that:
16.1 prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
16.2 after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of transfer
and with the appropriate form fully executed;
16.3 subject to Section 6 and Section 7.7 hereof, the Corporation
and the Rights Agent may deem and treat the Person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common
Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Corporation or the Rights Agent)
for all purposes whatsoever, and neither the Corporation nor the Rights
Agent, subject to the last sentence of Section 7.6 hereof, shall be
required to be affected by any notice to the contrary; and
16.4 notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability to
any holder of a Right or a beneficial interest in 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, however, that the Corporation must use its best
efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as practicable.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
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 Shares or any other securities of the Corporation that 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 stockholder of the Corporation or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except
as provided in Section 24 hereof), or to receive dividends or other
distributions or to exercise any preemptive 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.
---------------------------
18.1 The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution
of this Agreement and the exercise and performance of its duties hereunder.
The Corporation also agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises.
The indemnity provided for herein shall survive the expiration of the
Rights and the termination of this Agreement.
18.2 The Rights Agent shall be protected and shall incur no
liability for, or in respect of, any action taken, suffered or omitted by
it in connection with its administration of this Agreement in reliance upon
any Right Certificate or certificate for Common Shares or for other
securities of the Corporation, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
19.1 Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or all or substantially all of the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of
the predecessor or in the name of the successor Rights Agent; and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
19.2 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 only those duties and obligations
imposed by this Agreement upon the following terms and conditions, by all
of which the Corporation and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
20.1 The Rights Agent may consult with legal counsel (who may be
legal counsel for the Corporation), 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.
20.2 Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of an Acquiring
Person and the determination of the current market price of any security)
be proved or established by the Corporation prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman
of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Corporation and delivered
to the Rights Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
20.3 The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
20.4 The Rights Agent shall not be liable for, or by reason of,
any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature on such Right
Certificates) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the Corporation
only.
20.5 The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Corporation of any covenant or condition contained in this Agreement or
in any Rights Certificate; nor shall it be responsible for any change in
the exercisability of the Rights (including the Rights becoming void
pursuant to Section 7.6 hereof) or any adjustment required under the
provisions of Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
receipt of the certificate described in Section 12 hereof); nor shall it by
any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Preferred Shares or Common Shares
to be issued pursuant to this Agreement or any Right Certificate or as to
whether any Preferred Shares or Common Shares will, when issued, be validly
authorized and issued, fully paid and non-assessable.
20.6 The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, 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.
20.7 The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary of the
Corporation, and to apply to such officers for advice or instructions in
connection with its duties, and shall not be liable for any action taken or
suffered by it in good faith or lack of action in accordance with
instructions of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent for written
instructions from the Corporation may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Agreement and the date on or after which such
action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights
Agent in accordance with a proposal included in any such application on or
after the date specified in such application (which date shall not be less
than five (5) Business Days after the date any officer of the Corporation
actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written instruction in response to such application
specifying the action to be taken or omitted.
20.8 The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or
lend money to the Corporation or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the
Corporation or for any other legal entity.
20.9 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, negligence or misconduct of
any such attorneys or agents or for any loss to the Corporation resulting
from any such act, default, negligence or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.
20.10 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.
20.11 If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
not been completed, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting
with the Corporation.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon thirty (30) days'
notice in writing mailed to the Corporation and to each transfer agent of
the Common Shares or Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The
Corporation may remove the Rights Agent or any successor Rights Agent upon
sixty (60) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Shares or Preferred Shares by registered or certified mail, and to holders
of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the
Corporation shall appoint a successor to the Rights Agent. If the
Corporation shall fail to make such appointment within a period of sixty
(60) 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
Corporation), then the registered holder of any Right Certificate may apply
to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Corporation or
by such a court, shall be a corporation organized and doing business under
the laws of the United States or of any of the States of New York, New
Jersey or California (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in
any of the States of New York, New Jersey or California), in good standing,
having an office in any of such States, 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 (or the
parent corporation of which) has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $100,000,000. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Corporation
shall file notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
22.1 Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Corporation may, at its
option, issue new Right Certificates evidencing Rights in such form as may
be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
22.2 In connection with the issuance or sale of Common
Shares following the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date, the Corporation (a) shall
with respect to common Shares so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities, notes or debentures issued
by the Corporation, and (b) may in any other case, if deemed necessary or
appropriate by the Board of Directors of the Corporation, issue Right
Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) the corporation
shall not be obligated to issue any such Right Certificates if, and to the
extent that, the Corporation shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Corporation or the Person to whom such Right Certificate would be issued,
and (ii) no 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 and Termination.
23.1 Redemption.
23.1.1 The Board of Directors of the Corporation may, at its
option, redeem all but not less than all of the then outstanding Rights at
a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"), at any time prior to the earlier of
the occurrence of a Section 11.1.2 Event or the Final Expiration Date. The
corporation may, at its option, pay the Redemption Price either in Common
Shares (based on the "current per share market price," as defined in
Section 11.4, of the Common Shares at the time of redemption) or cash;
provided that if the Corporation elects to pay the Redemption Price in
Common Shares, the Corporation shall not be required to issue any
fractional Common Shares and the number of Common Shares issuable to each
holder of Rights shall be rounded down to the next whole share.
23.1.2 In addition, the Board of Directors of the Corporation may,
at its option, at any time following the occurrence of a Section 11.1.2
Event and the expiration of any period during which the holder of Rights
may exercise the rights under Section 11.1.2 but prior to any Section 13
Event redeem all but not less than all of the then outstanding Rights at
the Redemption Price (x) in connection with any merger, consolidation or
sale or other transfer (in one transaction or in a series of related
transactions) of assets or earning power aggregating 50% or more of the
earning power of the Corporation and its Subsidiaries (taken as a whole) in
which all holders of Common Shares are treated alike and not involving
(other than as a holder of Common Shares being treated like all other such
holders) an Interested Stockholder or (y) (i) if and for so long as the
Acquiring Person is not thereafter the Beneficial owner of 15% or more of
the Common Shares, and (ii) at the time of redemption no other Persons are
Acquiring Persons.
23.2 In the case of a redemption permitted under Section 23.1.1,
immediately upon the date for redemption set forth in for determined in the
manner specified in) a resolution of the Board of Directors of the
Corporation ordering the redemption of the Rights, evidence of which shall
have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. In the case of a redemption
permitted only under Section 23.1.2, evidence of which shall have been
filed with the Rights Agent, the right to exercise the Rights will
terminate and represent only the right to receive the Redemption Price upon
the later of ten (10) Business Days following the giving of such notice or
the expiration of any period during which the rights under Section 11.1.2
may be exercised. The Corporation shall promptly give public notice of any
such redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption.
Within ten (10) days after such date for redemption set forth in a
resolution of the Board of Directors ordering the redemption of the Rights,
the Corporation shall mail a notice of redemption to all the holders of the
then outstanding Rights at their 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 Shares. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made. Neither the Corporation nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time
in any manner other than as specifically set forth in this Section 23 and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
23.3 The Corporation may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights in accordance with this
Agreement and (ii) mailing payment of the Redemption Price to the
registered holders of the Rights at their addresses as they appear on the
registry of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent of the Common Shares, and upon such
action, all outstanding Rights and Right certificates shall be null and
void without any further action by the Corporation.
Section 24. Notice of Certain Events.
24.1 In case the Corporation shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to
make any other distribution to the holders of its Preferred Shares (other
than a regular quarterly cash dividend), (ii) to offer to the holders of
its Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with any other Person (other than a
Subsidiary of the Corporation in a transaction which does not violate
Section 11.14 hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer) in one or more transactions, of 50% or more of the assets or
earning power of the Corporation and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Corporation and/or any of its
Subsidiaries in one or more transactions each of which does not violate
Section 11.14 hereof), or (v) to effect the liquidation, dissolution or
winding up of the Corporation, then, in each such case, the Corporation
shall give to each holder of a Right Certificate, in accordance with
Section 25 hereof, a notice of such proposed action to the extent feasible
and file a certificate with the Rights Agent to that effect, which shall
specify the record date for the purposes of such stock dividend or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation
therein by the holders of the Preferred Shares, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least twenty (20) days prior to the record
date for determining holders of the Preferred Shares for purposes of such
action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Shares, whichever
shall be the earlier.
24.2 In case of a Section 11.1.2 Event, then (i) the Corporation
shall as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 25 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11.1.2
hereof, and (ii) all references in the preceding Section 24.1 to Preferred
Shares shall be deemed thereafter to refer also to Common Shares and/or, if
appropriate, other securities of the Corporation.
Section 25. Miscellaneous.
25.1 Notices. Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Right Certificate to or
on the Corporation shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agents) as follows:
Unitrin, Inc.
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Corporation or by
the holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Corporations)
as follows:
First Chicago Trust Company of New York
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 0000-0000
Attention: Tenders & Exchanges Administration
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Right Certificate or,
if prior to the Distribution Date, to the holder of certificates
representing Common Shares shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the Corporation.
25.2 Supplements and Amendments. Prior to the Distribution Date,
the Corporation and the Rights Agent shall, if the Corporation so directs,
supplement or amend any provision of this Agreement without the approval of
any holders of certificates representing Common Shares. From and after the
Distribution Date, the Corporation and the Rights Agent shall, if the
Corporation so directs, supplement or amend this Agreement without the
approval of any holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein
that may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner that the Corporation may
deem necessary or desirable and that shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring
person or an Affiliate or Associate of an Acquiring Person); provided,
however, that this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are
not then redeemable, or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Corporation which states
that the proposed supplement or amendment is in compliance with the terms
of this Section 25.2, the Rights Agent shall execute such supplement or
amendment, provided that such supplement or amendment does not adversely
affect the rights or obligations of the Rights Agent under Section 18 or
Section 20 of this Agreement. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of
the holders of Common Shares.
25.3 Determination and Actions by the Board of Directors, etc. The
Board of Directors of the Corporation shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board, or the Corporation, or as may be
necessary or advisable in the administration of this Agreement, including
without limitation, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including, without
limitation, a determination to redeem or not redeem the Rights or to amend
the Agreement and whether any proposed amendment adversely affects the
interests of the holders of Right Certificates). For all purposes of this
Agreement, any calculation of the number of Common Shares or other
securities outstanding at any particular time, including for purposes of
determining the particular percentage of ouch outstanding Common Shares or
any other securities of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act as in effect on the
date 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 in good
faith, shall (x) be final, conclusive and binding on the Corporation, the
Rights Agent, the holders of the Right Certificates and all other parties,
and (y) not subject the Board to any liability to the holders of the Right
Certificates. Nothing in Section 15 hereof is intended to modify or limit
this Section 25.3.
25.4 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
25.5 Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the
Corporation, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Agreement. This
Agreement shall be for the sole and exclusive benefit of the Corporation,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares).
25.6 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.
25.7 Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware 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.
25.8 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.
25.9 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 26. Exchange.
26.1 Notwithstanding any other provision hereof, the Board of
Directors of the Corporation may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11.1.2 hereof) for
Common Shares of the Corporation at an exchange ratio determined by
dividing the then-applicable exercise price of the Rights determined under
Section 7.2 by the "current per share market price" as defined in Section
11.4.1 (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than
the Corporation, any Subsidiary of the Corporation, any) employee benefit
plan of the Corporation or any such Subsidiary, any entity holding Common
Shares for or pursuant to the terms of any such plan or any trustee,
administrator or fiduciary of such a plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more
of the Common Shares then outstanding.
26.2 Immediately upon the action of the Board of Directors of the
Corporation ordering the exchange of any Rights pursuant to Section 26.1
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 (other than a holder of Rights that have become void
pursuant to the provisions of Section 11.1.2 hereof) shall be to receive
that number of Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Corporation shall
promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Corporation promptly shall mail a notice of
any such exchange to all of the holders of such Rights 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
shall state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section 11.1.2) held by each
holder of Rights.
26.3 In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 26, the
Corporation shall take all such action as may be necessary to authorize
additional Common Shares or Preferred Shares for issuance upon exchange of
the Rights.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the date and year first above
written.
UNITRIN, INC.
Attest:
By /S/ Xxxxxx X. Xxxxxxx By /S/ Xxxxxxx X. Vie
---------------------------- --------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxxx X. Vie
Title: Secretary Title: President and Chief
Executive Officer
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
Attest:
By /S/ Acallie X. Xxxxxxxxx By /S/ Xxxxxx Xxxxxxxxxx
---------------------------- --------------------------
Name: Acaille X. Xxxxxxxxx Name: Xxxxxx Xxxxxxxxxx
Title: Asst. Vice President Title: Asst. Vice President
Exhibit A
Form of
Certificate of Designation, Preferences and
Rights of Series A Preferred Stock
of
Unitrin, Inc.
(Pursuant toss.151
of the Delaware General Corporation Law)
We, Xxxxxxx X. Vie, President and Chief Executive Officer, and
Xxxxxx X. Xxxxxxx, Secretary, respectively, of Unitrin, Inc. (the
"Corporation"), a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions
of Section 103, thereof DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors of the Corporation by the Certificate of Incorporation of the
Corporation, the said Board of Directors on August 3, 1994, adopted the
following resolutions creating a series of 100,000 shares of Preferred
Stock designated as Series A Preferred Stock.
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of the corporation in accordance with the provisions
of the certificate of Incorporation, the Board of Directors hereby creates
a series of Series A Preferred Stock, with a par value of $.10 per share,
of the Corporation and hereby states the designation and number of shares,
and fixes the relative rights, preferences and limitations thereof (in
addition to the provisions set forth in the Certificate of Incorporation
that are applicable to the Preferred Stock of all classes and series) as
follows:
Series A Preferred Stock
Section 1. Designation, Par Value and Amount. The shares of such
series shall be designated as "Series A Preferred Stock" (hereinafter
referred to as "Series A Preferred Stock"), the shares of such series shall
be with par value of $.10 per share, and the number of shares constituting
such series shall be 100,000; provided, however, that, if more than a total
of 100,000 shares of Series A Preferred Stock shall be issuable upon the
exercise of Rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of August 3, 1994, between the Corporation and First Chicago Trust
Company of New York, as Rights Agent (as amended from time to time, the
"Rights Agreement"), the Board of Directors of the Corporation shall direct
by resolution or resolutions that a certificate be properly executed,
acknowledged and filed providing for the total number of shares of Series A
Preferred Stock authorized to be issued to be increased (to the extent that
the Certificate of Incorporation then permits) to the largest number of
whole shares (rounded up to the nearest whole number) issuable upon
exercise of the Rights.
Section 2. Dividends and Distributions.
2.1 Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors out of assets legally
available for the purpose, quarterly dividends payable in cash on the first
business 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, 1,000 times the aggregate per share amount of all cash dividends,
and 1,000 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock, par value $.10 per share, of the Corporation (the
"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.
2.2 The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in Section 2.1 above 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.
2.3 Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 30 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:
3.1 Except as provided in Section 3.3 and subject to the provision
for adjustment hereinafter set forth, each share of Series A Preferred
Stock shall entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the stockholders of the Corporation.
3.2 Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
3.3 The following additional provisions shall apply with respect
to the voting of shares of Series A Preferred Stock:
3.3.1. If, on the date used to determine stockholders of record
for any meeting of stockholders for the election of directors, a default in
preference dividends (as defined in Section 3.3.5 below) on the Series A
Preferred Stock shall exist, the holders of the Series A Preferred Stock
shall have the right, voting as a class as described in Section 3.3.2
below, to elect two directors (in addition to the directors elected by
holders of Common Stock of the corporation). Such right may be exercised
(a) at any meeting of stockholders for the election of directors or (b) at
a meeting of the holders of shares of Voting Preferred Stock (as
hereinafter defined), called for the purpose in accordance with the Bylaws
of the Corporation, until all such cumulative dividends (referred to above)
shall have been paid in full or until non-cumulative dividends have been
paid regularly for at least one year.
3.3.2. The right of the holders of Series A Preferred Stock to
elect two directors, as described above, shall be exercised as a class
concurrently with the rights of holders of any other series of Preferred
Stock upon which voting rights to elect such directors have been conferred
and are then exercisable. The Series A Preferred Stock and any additional
series of Preferred Stock that the Corporation may issue and that may
provide for the right to vote with the foregoing series of Preferred Stock
are collectively referred to herein as "Voting Preferred Stock."
3.3.3. Each director elected by the holders of shares of Voting
Preferred Stock shall be referred to herein as a "Preferred Director." A
Preferred Director shall continue to serve as such for a term of one year,
except that upon any termination of the right of all holders of Voting
Preferred Stock to vote as a class for Preferred Directors, the term of
office of Preferred Directors then serving shall terminate. Any Preferred
Director may be removed by, and shall not be removed except by, the vote of
the holders of record of a majority of the outstanding shares of Voting
Preferred Stock then entitled to vote for the election of directors,
present (in person or by proxy) and voting together as a single class (a)
at a meeting of the stockholders, or (b) at a meeting of the holders of
shares of such Voting Preferred Stock, called for the purpose in accordance
with the Bylaws of the Corporation, or (c) by written consent signed by the
holders of a majority of the then outstanding shares of Voting Preferred
Stock then entitled to vote for the election of directors taken together as
a single class.
3.3.4. So long as a default in any preference dividends of the
Series A Preferred Stock shall exist or the holders of any other series of
Voting Preferred Stock shall be entitled to elect Preferred Directors, (a)
any vacancy in the office of a Preferred Director may be filled (except as
provided in the following clause (b)) by an instrument in writing signed by
the remaining Preferred Director and filed with the Corporation and (b) in
the case of the removal of any Preferred Director, the vacancy may be
filled by the vote or written consent of the holders of a majority of the
outstanding shares of Voting Preferred Stock then entitled to vote for the
election of directors, present (in person or by proxy) and voting together
as a single class, at such time as the removal shall be effected. Each
director appointed as aforesaid by the remaining Preferred Director shall
be deemed, for all purposes hereof, to be a Preferred Director. Whenever
(x) no default in preference dividends on the Series A Preferred Stock
shall exist and (y) the holders of other series of Voting Preferred Stock
shall no longer be entitled to elect such Preferred Directors, then the
number of directors constituting the Board of Directors of the Corporation
shall be reduced by two.
3.3.5. For purposes hereof, a "default in preference dividends"
on the Series A Preferred Stock shall be deemed to have occurred whenever the
amount of cumulative and unpaid dividends on the Series A Preferred stock
shall be equivalent to six full quarterly dividends or more (whether or not
consecutive), and, having so occurred, such default shall be deemed to
exist thereafter until, but only until, all cumulative dividends on all
shares of the Series A Preferred Stock then outstanding shall have been
paid through the last Quarterly Dividend Payment Date or until, but only
until, non-cumulative dividends have been paid regularly for at least one
year.
3.4 Except as set forth herein for as otherwise required by
applicable law), holders of Series A Preferred Stock shall have no general
or special voting rights and their consent shall not be required for taking
any corporate action.
Section 4. Certain Restrictions.
4.1 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:
4.1.1. 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;
4.1.2. 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 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;
4.1.3. redeem or purchase or otherwise acquire for consideration
(except as provided in Section 4.1.4 below) 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
(either as to dividends or upon dissolution, liquidation or winding up) to
the Series A Preferred Stock;
4.1.4. redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or 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 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.
4.2 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 Section
4.1, 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 Certificate of Incorporation, in any
other Certificate of Amendment creating a series of Preferred Stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
6.1 Subject to the prior and superior rights of holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Preferred Stock with respect to rights upon liquidation,
dissolution or winding up (voluntary or otherwise), no distribution shall
be made 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 per share an amount equal to the
greater of 1,000 times $125 or 1,000 times the payment made per share of
Common Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Preferred Stock unless,
prior thereto, the holders of shares of Common Stock shall have received an
amount per share (the "Capital Adjustment") equal to the quotient obtained
by dividing (i) the Series A Liquidation Preference by (ii) 1,000 (as
appropriately adjusted as set forth in Section 6.3 to reflect such events
as stock splits, stock dividends and recapitalizations with respect to the
Common Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series A Liquidation
Preference and the Capital Adjustment in respect of all outstanding shares
of Series A Preferred Stock and Common Stock, respectively, holders of
Series A Preferred Stock and holders of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to such Preferred
Stock and Common Stock, on a per share basis, respectively.
6.2 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 series of preferred stock, if
any, which rank on a parity with the Series A Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of Series A
Preferred Stock and the holders of such parity shares in proportion to
their respective liquidation preferences. In the event, however, that there
are not sufficient assets available to permit payment in full of the
Capital Adjustment, then such remaining assets shall be distributed ratably
to the holders of Common Stock.
6.3 In the event the Corporation shall (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment 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.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series A Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share equal to
the Adjustment Number (as appropriately adjusted as set forth in Section
6.3 to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) 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.
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. Ranking. The Series A Preferred Stock shall rank junior
to all other series of the Corporation's Preferred Stock as to the payment
of dividends and the distribution of assets, unless the terms of any such
series shall provide otherwise.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner that would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
shares of Series A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and have the benefit of all
other rights of holders of Series A Preferred Stock.
RESOLVED, that the proper officers of the Corporation be, and each
of them hereby is, authorized to execute a Certificate of Designation with
respect to the Series A Preferred Stock pursuant to Section 151 of the
General Corporation Law of the State of Delaware and to take all
appropriate action to cause such Certificate to became effective,
including, but not limited to, the filing and recording of such Certificate
with and/or by the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, I have executed and subscribed to this
Certificate and do affirm the foregoing as true under penalty of perjury
this third day of August, 1994.
/S/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Secretary
Exhibit B
Form of Right Certificate
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER AUGUST 3, 2004 OR EARLIER IF
REDEEMED BY THE CORPORATION. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT ON THE TERMS SET FORTH IN
TIE RIGHTS AGREEMENT.
Right Certificate
UNITRIN, 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 August 3, 1994 (the "Rights
Agreement"), between Unitrin, Inc., a Delaware corporation (the
"Corporation"), and First Chicago Trust Company of New York (the "Rights
Agents") to purchase from the Corporation at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M., New York time, on August 3, 2004, unless the Rights
evidenced hereby shall have been previously redeemed by the Corporation, at
the principal office or offices of the Rights Agent designated for such
purpose, or at the office of its successor as Rights Agent, one
one-thousandth (1/1000th) of a fully paid non-assessable share of Series A
Preferred stock, $.10 par value per share (the "Preferred Shares"), of the
Corporation, at a purchase price of $125 per one one-thousandth (1/1000th)
of a Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right Certificate
(and the number of one one-thousandths (1/1000ths) of a Preferred Share
that may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and purchase Price as of
August 17, 1994, based on the Preferred Shares as constituted at such date.
Upon the occurrence of a Section 11.1.2 Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate who becomes a transferee after the Acquiring
Person becomes such, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of any such Acquiring Person, Associate or
Affiliate who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such, such Rights shall become null and void and
no holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11.1.2 Event.
As provided in the Rights Agreement, the Purchase Price and the
number of one one-thousandths (1/1000ths) of a Preferred Share or other
securities that 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, including Triggering Events (as such term
is defined in the Rights Agreement).
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 Corporation and the holders
of the Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement. Copies of the
Rights Agreement are on file at the principal executive offices of the
Corporation and the principal office or offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares or other securities 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 may be redeemed by the Corporation at a
redemption price of $.01 per Right (subject to adjustment as provided in
the Rights Agreement payable in cash.
No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions that are one
one-thousandth (1/1000th) or integral multiples of one one-thousandth
(1/1000th) of a Preferred Share, which may, at the election of the
Corporation, be evidenced by depositary 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
Shares or of any other securities of the Corporation that may at any time
be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Corporation or any right
to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or to
receive dividends or other distributions or to exercise any preemptive or
subscription rights, or otherwise, until the Right or Rights evidenced by
this Right Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal. Dated as of __________, _____.
(SEAL)
ATTEST: Unitrin, Inc.
By___________________________________ By________________________________
Name_________________________________ Name______________________________
Title________________________________ Title_____________________________
Countersigned
[ ]
By___________________________________
Name_________________________________
Title________________________________
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________________________________________
hereby sells, assigns and transfers unto_______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint _______________
Attorney-in-Fact, to transfer the within Right Certificate on the books of
the within-named Corporation, with full power of substitution.
Dated: __________, _____,
_________________________________
Signature
Signature Guaranteed:
__________________________________
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
-------------------------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights evidenced by
this Right certificate are not being sold, assigned or transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), (2)
this Right Certificate is not being sold, assigned or transferred to or on
behalf of any such Acquiring Person, Affiliate or Associate; and (3) after
due inquiry and to the best knowledge of the undersigned, the undersigned
did not acquire the Rights evidenced by this Right Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement).
_________________________________
Signature
-------------------------------------------------------------------------------
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise Rights represented by the Right
Certificate)
To the Rights Agent:
The undersigned hereby irrevocably elects to
exercise_______________ Rights represented by this Right Certificate to
purchase the Preferred Shares, Common Shares or other securities issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares, Common Shares or other securities be issued in the name
of:
Please insert social security number
or other identifying number __________________________________________________
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security number
or other identifying number __________________________________________________
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
Dated: __________, _____,
------------------------------------------------------------------------------
Signature
Signature Guaranteed:
--------------------------------------------
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
The undersigned hereby certifies that (1) the Rights evidenced by
this Right Certificate are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), (2) this Right Certificate
is not being sold, assigned or transferred by or on behalf of any such
Acquiring Person, Affiliate or Associate; and (3) after due inquiry and to
the best knowledge of the undersigned, the undersigned did not acquire the
Rights evidenced by this Right Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).
-------------------------------
Signature
------------------------------------------------------------------------------
Notice
The signature on the foregoing Forms of Assignment and Election
and certificates must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Corporation and the Rights Agent will deem the Beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in
the Right Agreement) and such Assignment or Election to Purchase will not
be honored.
Exhibit C
UNITRIN, INC.
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
SUMMARY OF RIGHTS TO PURCHASE
SERIES A PREFERRED SHARES
On August 3, 1994 (the "Effective Date"), the Board of Directors
of Unitrin, Inc. (the "Corporation") declared a dividend distribution of
one preferred share purchase right (a "Right") for each outstanding share
of Common stock, par value $.10 per share (the "Common Shares"), of the
Corporation. The dividend is payable to the stockholders of record on
August 17, 1994 (the "Record Date"), and with respect to Common Shares
issued thereafter until the Distribution Date (as defined below) and, in
certain circumstances, with respect to Common Shares issued after the
Distribution Date. Except as set forth below, each Right, when it becomes
exercisable, entitles the registered holder to purchase from the
Corporation one one-thousandth (1/1000th) of a share of Series A Preferred
Stock, $.10 par value per share (the "Preferred Shares"), of the
Corporation at a price of $125 per one one-thousandth (1/1000th) of a
Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement
(the "Rights Agreement") between the Corporation and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent"), dated as of
August 3, 1994.
Initially, the Rights will be attached to all certificates
representing common Shares then outstanding, and no separate Right
Certificates will be distributed. The Rights will separate from the Common
Shares upon the earliest to occur of (i) a person or group of affiliated or
associated persons having acquired beneficial ownership of 15% or more of
the outstanding Common Shares (except pursuant to a Permitted offer, as
hereinafter defined); or (ii) 10 days (or such later date as the Board may
determine) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would
result in a person or group becoming an Acquiring Person (as hereinafter
defined) (the "Distribution Date"). A person or group whose acquisitions of
Common Shares cause a Distribution Date pursuant to clause (i) above is an
"Acquiring Person," with certain exceptions as set forth in the Rights
Agreement. The date that a person or group becomes an Acquiring Person is
the "Shares Acquisition Date."
The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with arid only with the Common Shares. Until
the Distribution xxxx (or earlier redemption or expiration of the Rights),
new common Share certificates issued after the Record Date upon transfer or
new issuance of Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with
the Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the
Rights ("Right Certificates") will be mailed to the holders of record of
the Common Shares as of the Close of Business (as defined in the Rights
Agreement) on the Distribution Date (and to each initial record holder of
certain Common Shares issued after the Distribution Date), and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on August 3, 2004, unless earlier
redeemed by the Corporation as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding Common
shares at a price and on terms which a majority of certain members of the
Hoard determines to be adequate and in the best interests of the
Corporation, its stockholders and other relevant constituencies, other than
such Acquiring Person, its affiliates and associates (a "Permitted
Offer")), each holder of a Right will thereafter have the right (the
"Flip-In Right") to receive upon exercise the number of Common Shares (or,
in certain circumstances, of one one-thousandths (1/1000ths) of a Preferred
Share or other securities of the corporation) having a value (immediately
prior to such triggering event) equal to two times the exercise price of
the Right. Notwithstanding the foregoing, following the occurrence of the
event described above, all Rights that,, are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned
by any Acquiring person or any affiliate or associate thereof will be null
and void. The Board has the option, at any time after any person becomes an
Acquiring Person, to exchange all or part of the then-exercisable Rights
(excluding those that have become void, as described in the immediately
preceding sentence) for Common Shares, at an exchange ratio determined by
dividing the then-applicable Purchase Price by the then current market
price per Common share as determined in accordance with the Rights
Agreement. However, this option generally terminates if any person becomes
the beneficial owner of 50% or more of the Common Shares.
In the event that, at any time following the Shares Acquisition
Date, (i) the Corporation is acquired in a merger or other business
combination transaction in which the holders of all of the outstanding
Common Shares immediately prior to the consummation of the transaction are
not the holders of all of the surviving corporation's voting power, or (ii)
more than 50% of the Corporation's assets or earning power is sold or
transferred, in either case with or to an Acquiring Person or any affiliate
or associate thereof or any other person in which such Acquiring Person,
affiliate or associate has an interest or any person acting on behalf of or
in concert with such Acquiring Person, affiliate or associate, or if, in
such transaction, all holders of Common Shares are not treated alike, any
other person, then each holder of a Right (except Rights which previously
have been voided as set forth above shall thereafter have the right (the
"Flip-Over Right") to receive, upon exercise, common shares of the
acquiring company having a value equal to two tires the exercise price of
the Right. The holder of a Right will continue to have the Flip Over Right
whether or not such holder exercises or surrenders the Flip-in Right.
The Purchase Price payable, and the number of Preferred Shares,
Common Shares or other securities issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred shares, (ii) upon the grant to holders
of the Preferred Shares of certain rights or warrants to subscribe for or
purchase Preferred Shares at a price, or securities convertible into
Preferred Shares with a conversion price, less than the then current market
price of the Preferred Shares or (iii) upon the distribution to holders of
the Preferred Shares of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights and the number of the
one-thousandths (1/1000ths) of a Preferred Share issuable upon exercise of
each Right are also subject to adjustment in the event of a stock split of
the Common Shares or a stock dividend on the Common Shares payable in
Common shares or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but, if greater,
will be entitled to an aggregate dividend per share of 1,000 times the
dividend declared per Common Share. In the event of liquidation, the
holders of the Preferred shares will be entitled to a minimum preferential
liquidation payment per share in an amount equal to the greater of 1,000
times $125 or 1,000 times the payment made per share of Common Stock plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series A
Liquidation Preference"); thereafter, and after the holders of the Common
Shares receive a liquidation payment of an amount equal to the quotient
obtained by dividing the Series A Liquidation Preference by 1,1100 (subject
to certain adjustments for stock splits, stock dividends and
recapitalizations with respect to the Common Shares), the holders of the
Preferred Shares and the holders of the Common Shares will share the
remaining assets in the ratio of 1,000 to 1 (as adjusted) for each
Preferred Share and Common Share so held, respectively. Finally, in the
event of any merger, consolidation or other transaction in which common
shares are exchanged, each Preferred Share will be entitled to receive
1,000 times the amount received per Common Share. These rights are
protected by customary antidilution provisions. In the event that the
amount of accrued and unpaid dividends on the Preferred Shares is
equivalent to six full quarterly dividends or more, the holders of the
Preferred Shares shall have the right, voting as a class, to elect two
directors in addition to the directors elected by the holders of the common
shares until all cumulative dividends on the Preferred Shares have been
paid through the last quarterly dividend payment date or until
non-cumulative dividends have been paid regularly for at least one year.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Preferred Shares will be issued
(other than fractions which are one one-thousandth (1/1000th) or integral
multiples of one one-thousandth (1/1000th) of a Preferred Share, which may,
at the election of the Corporation, be evidenced by depositary receipts)
and in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Shares on the last trading day prior to the date of
exercise.
At any time prior to the earlier to occur of (i) a person becoming
an Acquiring Person or (ii) the expiration of the Rights, and under certain
other circumstances, the corporation may redeem the Rights in whole, but
not in part, at a price (payable in cash car, at the Corporation's
election, in Common Shares) of $.01 per Right (the "Redemption Price"),
which redemption shall be effective upon the action of the Board.
Additionally, following the Shares Acquisition Date, the Corporation may
redeem the then outstanding Rights in whole, but riot in part, at the
Redemption Price, provided that such redemption is in connection with a
merger or other business combination transaction or series of transactions
involving the Corporation in which all holders of Common shares are treated
alike but not involving an Acquiring Person or its affiliates or
associates.
All of the provisions of the Rights Agreement may be amended by
the Board of the Corporation prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, defect or inconsistency, to make
changes that do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or, subject to certain
limitations, to shorten or lengthen any time period under the Rights
Agreement.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the corporation, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders of the
Corporation, stockholders may, depending upon the circumstances, recognize
taxable income should the Rights become exercisable or upon the occurrence
of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A. A copy of the Rights Agreement is available free of charge from the
Corporation. This summary description of the Rights does not purport to be
compete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
October 12, 2000
First Union National Bank
Shareholder Services Group
0000 Xxxx X.X. Xxxxxx Xxxxxxxxx, 0X0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx X. XxXxxxx
Re: Unitrin, Inc. Rights Agreement
Dear Vic:
In connection with the appointment of First Union National Bank
("First Union") as the transfer agent and registrar of Unitrin, Inc.
("Unitrin") presently scheduled to become effective on October 30, 2000,
Unitrin will also designate First Union as successor Rights Agent under the
Rights Agreement, dated as of August 3, 1994, originally between Unitrin
and First Chicago Trust Company of New York (the "Rights Agreement"). We
understand that First Union and its counsel have reviewed the Rights
Agreement and that First Union is prepared to act as Rights Agent
thereunder effective 12:01 a.m. on October 30, 2000 or such other date and
time as the parties may hereafter mutually determine. By signing in the
space below on the enclosed duplicate of this letter and returning it to
me, please confirm that First Union accepts its appointment as successor
Rights Agent at the above-referenced time and agrees to be bound by all of
the terms and conditions of the Rights Agreement as they apply to the
Rights Agent.
Sincerely,
UNITRIN, INC.
/s/ Xxxxx Xxxxxxx
By: Xxxxx Xxxxxxx
Secretary
Confirmed and Agreed:
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxx X. XxXxxxx
Name: Xxxxxx X. XxXxxxx
Title: Vice President
Date: October 12, 2000
