_________________________________________________________________
XXXXXX GREETINGS, INC.
and
THE BANK OF NEW YORK
Rights Agent
_________________
Rights Agreement
Dated as of September 8, 1999
_________________________________________________________________
Table of Contents
_________________
Page
____
Section 1. Certain Definitions. . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent. . . . . . . . . . . . 5
Section 3. Issue of Rights Certificates . . . . . . . . . . . 6
Section 4. Form of Rights Certificates. . . . . . . . . . . . 8
Section 5. Countersignature and Registration. . . . . . . . . 9
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates. . . . . . . . . . . . . . . . 10
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. . . . . . . . . . . . . . . . . . . . . . 11
Section 8. Cancellation of Rights Certificates. . . . . . . . 13
Section 9. Reservation and Availability of Capital Stock. . . 13
Section 10. Preferred Stock Record Date. . . . . . . . . . . . 15
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. . . . . . . . . . . . . . . . 15
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . . . . . . . 29
Section 14. Fractional Rights and Fractional Shares. . . . . . 32
Section 15. Rights of Action . . . . . . . . . . . . . . . . . 34
Section 16. Agreement of Rights Holders. . . . . . . . . . . . 34
Section 17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . . . . . . . 35
Section 18. Concerning the Rights Agent. . . . . . . . . . . . 35
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. . . . . . . . . . . . . . . . . . . . . . . 36
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . 37
Section 21. Change of Rights Agent . . . . . . . . . . . . . . 40
Section 22. Issuance of New Rights Certificates. . . . . . . . 41
Section 23. Redemption and Termination . . . . . . . . . . . . 41
Section 24. Notice of Certain Events . . . . . . . . . . . . . 42
Section 25. Notices. . . . . . . . . . . . . . . . . . . . . . 43
Section 26. Supplements and Amendments . . . . . . . . . . . . 44
Section 27. Successors . . . . . . . . . . . . . . . . . . . . 45
Section 28. Determinations and Actions by the Board of
Directors, etc. . . . . . . . . . . . . . . . . . . . . . 45
Section 29. Benefits of this Agreement . . . . . . . . . . . . 45
Section 30. Severability . . . . . . . . . . . . . . . . . . . 46
Section 31. Governing Law. . . . . . . . . . . . . . . . . . . 46
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . 46
Section 33. Descriptive Headings . . . . . . . . . . . . . . . 46
Exhibit A -- Certificate of Designation, Preferences and Rights
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
RIGHTS AGREEMENT
________________
RIGHTS AGREEMENT, dated as of September 8, 1999 (the
"Agreement"), between Xxxxxx Greetings, Inc., a Delaware
corporation (the "Company"), and The Bank of New York, a New York
banking corporation (the "Rights Agent").
W I T N E S S E T H
_ _ _ _ _ _ _ _ _ _
WHEREAS, on August 26, 1999 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized and declared a dividend distribution on September 15,
1999 of one Right for each share of Common Stock (as hereinafter
defined) of the Company outstanding at the close of business on
September 8, 1999 (the "Record Date"), and has authorized the
issuance of one Right (as such number may hereinafter be adjusted
pursuant to the provisions of Section 11(p) hereof) for each
share of Common Stock of the Company issued between the Record
Date (whether originally issued or delivered from the Company's
treasury) and the earlier of the Distribution Date and the
Expiration Date (each as hereinafter defined), each Right
initially representing the right to purchase one one-hundredth of
a share of Series B Preferred Stock of the Company having the
rights, powers and preferences set forth in the form of
Certificate of Designation, Preferences and Rights attached
hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. Certain Definitions. For purposes of this
___________________
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who
or which, together with all Affiliates and Associates of such
Person, without the prior approval of the Board of Directors of
the Company, shall after the Rights Dividend Declaration Date
become the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding (or, in the case of any Person who
or which, together with all Affiliates and Associates of such
Person, is the Beneficial Owner of 15% or more of the shares of
Common Stock outstanding on the Rights Dividend Declaration Date,
which, after the rights Dividend Declaration Date, without the
prior approval of the Board of Directors of the Company, shall
become the Beneficial Owner of 25% or more of the shares of
Common Stock then outstanding), but shall not include the
Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan. Notwithstanding the
foregoing, if the Board of Directors of the Company determines in
good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this
paragraph, has become such inadvertently, and such Person divests
as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an "Acquiring
Person," then such Person shall not be deemed to have become an
"Acquiring Person" for any purposes under this Agreement.
"Acquiring Person" shall also not include any Person which would
otherwise become an Acquiring Person solely as a result of a
decrease in the number of outstanding shares of Common Stock and
which has not, on or after the date on which it otherwise would
have become an Acquiring Person, acquired beneficial ownership of
any additional shares of Common Stock.
(b) "Act" shall mean the Securities Act of 1933.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended and in effect on the date of this Agreement
(the "Exchange Act").
(d) A Person shall be deemed the "Beneficial
Owner" of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has
the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion
rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person shall
________
not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to
a tender or exchange offer made by such Person or any
of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such
Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section
3(a) or Section 22 hereof (the "Original Rights") or
pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has
the right to vote or dispose of or has "beneficial
ownership" of (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Exchange
Act), including pursuant to any agreement, arrangement
or understanding, whether or not in writing; provided,
________
however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also
then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not
in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this
paragraph (e)) or disposing of any voting securities of
the Company;
provided, however, that nothing in this paragraph (d) shall cause
________
a person engaged in business as an underwriter of securities to
be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in good
faith in a firm commitment underwriting until the expiration of
forty (40) days after the date of such acquisition.
(e) "Business Day" shall mean any day other than
a Saturday, Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(f) "Close of business" on any given date shall
mean 5:00 P.M., New York City time, on such date; provided,
________
however, that if such date is not a Business Day it shall mean
5:00 P.M., New York City time, on the next succeeding Business
Day.
(g) "Common Stock" shall mean the common stock,
$.01 par value, of the Company, except that "Common Stock" when
used with reference to any Person other than the Company shall
mean the capital stock of such Person with the greatest voting
power, or the equity securities or other equity interest having
power to control or direct the management, of such Person, or if
such other Person is a Subsidiary of another Person, the Person
or Persons which ultimately control such first-mentioned Person.
(h) "Common stock equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(i) "Current market price" shall have the meaning
set forth in Section 11(d)(i) hereof.
(j) "Current Value" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(k) "Distribution Date" shall have the meaning
set forth in Section 3(a) hereof.
(l) "Exchange Act" shall have the meaning set
forth in Section 1(c) hereof.
(m) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(n) "Final Expiration Date" shall mean the close
of business on August 31, 2009.
(o) "Person" shall mean any individual, firm,
corporation, partnership, limited liability company or other
entity and shall include any successor (by merger or otherwise)
of such entity.
(p) "Preferred Stock" shall mean shares of Series
B Preferred Stock, $1 par value, of the Company and, to the
extent that there is not a sufficient number of shares of Series
B Preferred Stock authorized to permit the full exercise of the
Rights, any other series of Preferred Stock, $1.00 par value, of
the Company designated for such purpose containing terms
substantially similar to the terms of the Series B Preferred
Stock.
(q) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(r) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(s) "Record Date" shall have the meaning set
forth in the WHEREAS clause at the beginning of this Agreement.
(t) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(u) "Rights" shall have the meaning set forth in
the WHEREAS clause at the beginning of this Agreement.
(v) "Rights Certificates" shall have the meaning
set forth in Section 3(a) hereof.
(w) "Section 11(a)(ii) Event" shall mean any
event described in Section 11(a)(ii) (A) through (D) hereof.
(x) "Section 11(a)(ii) Trigger Date" shall have
the meaning set forth in Section 11(a)(iii) hereof.
(y) "Section 13 Event" shall mean any event
described in clause (x), (y) or (z) of Section 13(a) hereof.
(z) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(aa) "Stock Acquisition Date" shall mean the
earlier of (i) the public announcement (which, for purposes of
this definition, shall include, without limitation, a report
filed pursuant to Section 13(d) under the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has
become such and (ii) the public disclosure of facts by the
Company or an Acquiring Person indicating that an Acquiring
Person has become such.
(bb) "Subsidiary" shall mean, with reference to
any Person, any corporation of which an amount of voting
securities sufficient to elect at least a majority of the
directors of such corporation is beneficially owned, directly, or
indirectly, by such Person or otherwise controlled by such
Person.
(cc) "Substitution Period" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(dd) "Trading Day" shall have the meaning set
forth in Section 11(d)(i) hereof.
(ee) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
Any determination required by the definitions contained
in this Section 1 shall be made by the Board of Directors of the
Company in its good faith judgment, which determination shall be
binding on the Rights Agent.
Section 2. Appointment of Rights Agent. The Company
___________________________
hereby appoints the Rights Agent to act as agent for the Company
in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. With prior notice
to the Rights Agent, the Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable upon
ten (10) days' prior written notice to the Rights Agent, and, if
it does so, the respective duties of the Rights Agent and any Co-
Rights Agent shall be as determined by the Company. The Rights
Agent shall have no duty to supervise, and shall in no event be
liable for, the acts or omissions of any such Co-Rights Agent.
Section 3. Issue of Rights Certificates.
____________________________
(a) Until the earlier of (i) the close of
business on the twentieth day after the Stock Acquisition Date
(or, if the twentieth day after the Stock Acquisition Date occurs
before the Record Date, the close of business on the Record
Date), or (ii) the close of business on the twentieth business
day after the date that a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan) is first published or sent or given within the meaning
of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would be
the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for the Common Stock registered in
the names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will
be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the
Company). The Company shall give the Rights Agent prompt written
notice of the Distribution Date. As soon as practicable after
the Distribution Date, and receipt of written notice of the
Distribution Date from the Company, the Rights Agent will, at the
Company's expense, send by first-class, insured, postage prepaid
mail, to each record-holder of the Common Stock as of the close
of business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit B hereto (the
"Rights Certificates"), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein.
If an adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(p) hereof, at the time
of distribution of the Right Certificates, the Company shall make
the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
(b) As promptly as practicable following the
Record Date, the Company will send a copy of a Summary of Rights
to Purchase Preferred Stock, in substantially the form attached
hereto as Exhibit C, by first-class, postage prepaid mail, to
each record holder of the Common Stock as of the close of
business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for
the Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of
the Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or
the Expiration Date, the transfer of any certificates
representing shares of Common Stock in respect of which, Rights
have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all
shares of Common Stock which are issued after the Record Date but
prior to the earlier of the Distribution Date or the Expiration
Date. Certificates representing such shares of Common Stock
shall also be deemed to be certificates for Rights, and all
certificates issued for newly issued shares or transfers of
Common Stock after the Record Date shall bear the following
legend:
This certificate also evidences and entitles
the holder hereof to certain Rights as set forth
in the Rights Agreement between Xxxxxx Greetings,
Inc. (the "Company") and The Bank of New York (the
"Rights Agent") dated as of September 8, 1999 (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of
which is on file at the principal offices of the
Company. 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. The
Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge
promptly after receipt of a written request
therefor. Under certain circumstances set forth
in the Rights Agreement, Rights issued to, or held
by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement),
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 earlier of (i) the Distribution Date
or (ii) the Expiration Date, the Rights associated with the
Common Stock represented by such certificates shall be evidenced
by such certificates alone and registered holders of common stock
shall also be the registered holders of the associated Rights,
and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common
Stock represented by such certificates. If the Company purchases
or acquires any Common Stock after the Record Date but before the
Distribution Date, any rights associated with such Common Stock
shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any rights associated with the Common
Stock which is no longer outstanding.
Section 4. Form of Rights Certificates.
___________________________
(a) The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the
reverse thereof) shall each 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 Company may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. The
Right Certificates shall be in a machine printable format and in
a form reasonably satisfactory to the Rights Agent. Subject to
the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the
Record Date and show the date of countersignature, and on their
face shall entitle the holders thereof to purchase such number of
one one-hundredths of a share of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise price
per one one-hundredth of a share, 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.
(b) Any Rights Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights
beneficially owned by any Person known to be: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii)
a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior
to or concurrently 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 such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect avoidance of Section 7(e)
hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following
legend:
The Rights represented by this Rights 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 Rights Certificate and the
Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of
such Agreement.
The Company shall instruct the Rights Agent in writing
of the Rights which should be so legended and shall supply the
Rights Agent with such legended Rights Certificates.
Section 5. Countersignature and Registration.
_________________________________
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President
or any Vice President, either manually or by facsimile signature,
and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. If any officer of the Company
who shall have signed any of the Rights Certificates shall cease
to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the
same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company;
and any Rights Certificates may be signed on behalf of the
Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such
an officer.
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at its principal office or
offices designated as the appropriate place for surrender of
Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates
and the certificate number and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and
___________________________________
Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
______________________________________________________________
Stolen Rights Certificates.
__________________________
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close
of business on the Distribution Date, and at or prior to the
close of business on the Expiration Date, any Rights Certificate
or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one
one-hundredths of a share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Rights Certificate or
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
Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or 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 Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company
may require payment by the holders of Rights 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 Rights Certificates.
(b) Upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Rights Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate, if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price;
___________________________________
Expiration Date of Rights.
_________________________
(a) Subject to Section 7(e) hereof, the
registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability
set forth in Section 9(c), Section 11(a)(iii),and Section 23(a)
hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights 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
with respect to the total number of one one-hundredths of a share
of Preferred Stock (or other securities, cash or other assets, as
the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) Final Expiration
Date, or (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the earlier of (i) and (ii) being
herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth
of a share of Preferred Stock pursuant to the exercise of a Right
shall initially be $25.00, and shall be subject to adjustment
from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase
Price per one one-hundredth of a share of Preferred Stock (or
other shares, securities, cash or other assets, as the case may
be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-hundredths
of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu 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 Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) may be made in cash or by certified bank check
or money order payable to the order of the Company. If the
Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights
Agent, if and when appropriate.
(d) If the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a Triggering
Event, any Rights beneficially owned by (i) an Acquiring Person
or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section
7(e), shall become null and void without any further action and
no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable
efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or other Person as
a result of its failure to make any determinations with respect
to an Acquiring Person or any of its Affiliates, Associates or
transferees hereunder. The Rights Agent will endeavor to comply
with the provisions hereof to the extent it has received
instructions from the Company concerning such matters.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder 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 Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation of Rights Certificates. All
___________________________________
Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered
to the Company or any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if surrendered
to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company.
Section 9. Reservation and Availability of Capital
_______________________________________
Stock.
_____
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock (and, following the occurrence
of a Triggering Event, out of its authorized and unissued shares
of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) issuable and deliverable upon the
exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i)
file on an appropriate form, as soon as practicable following the
earliest date after the first occurrence of a Section 11(a)(ii)
Event on which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance
with Section 11(a)(iii) hereof, or as soon as is required by law
following the Distribution Date, as the case may be, a
registration statement under the Act, with respect to the
securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such
securities, and (B) the Expiration Date. The Company will also
take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various
states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of
the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement, in
each case with simultaneous written notice to the Rights Agent,
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall
not be exercisable in any jurisdiction, unless the requisite
qualification in such jurisdiction shall have been obtained and
until a registration statement has been declared effective.
Unless notified to the contrary in writing by the Company, the
Rights Agent may assume that any Right exercised is permitted to
be exercised under applicable law and shall have no liability for
acting in reliance upon such assumption.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all one
one-hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and non-assessable.
(e) The Company further covenants and agrees that
it will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or delivery of a number of
one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of one one-
hundredths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in a name other than that
of the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date. Each person
___________________________
in whose name any certificate for a number of one one-hundredths
of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of such fractional shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided, however, that if the date of
________
such surrender and payment is a date upon which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number and
________________________________________
Kind of Shares or Number of Rights. 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.
(a)(i) If the Company shall at any time after the
date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock,
(B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller
number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Preferred
Stock (including any such reclassification in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the 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
Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock
or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date
and at a time when the Preferred Stock transfer books
of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) If:
(A) the Company or any Acquiring Person
publicly announces (including without limitation
by filing a report pursuant to Section 13(d) under
the Exchange Act) that any Person (other than the
Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company
for or pursuant to the terms of any such plan),
alone or together with its Affiliates and
Associates, at any time after the Rights Dividend
Declaration Date, has become the Beneficial Owner
of 15% or more of the shares of Common Stock then
outstanding (or in the case of a Person who was
such a Beneficial Owner on the Rights Dividend
Declaration Date, 25% or more of such shares),
unless the event causing such threshold to be
crossed is a transaction set forth in Section
13(a) hereof, or is an acquisition of shares of
Common Stock pursuant to a tender offer or an
exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by
at least a majority of the members of the Board of
Directors, after receiving advice from one or more
investment banking firms, to be (a) at a price
which is fair to stockholders (taking into account
all factors which such members of the Board deem
relevant including, without limitation, prices
which could reasonably be achieved if the Company
or its assets were sold on an orderly basis
designed to realize maximum value) and (b)
otherwise in the best interests of the Company and
its stockholders, or
(B) at any time after a Stock Acquisition
Date, any Acquiring Person or any Associate or
Affiliate of any Acquiring Person directly or
indirectly, (1) shall merge into the Company or
otherwise combine with the Company and the Company
shall be the continuing or surviving corporation
of such merger or combination and the Common Stock
of the Company shall remain outstanding and
unchanged, (2) shall, in one or more transactions,
transfer any assets to the Company in exchange (in
whole or in part) for shares of any equity
security of the Company or for securities
exercisable for or convertible into shares of any
equity security of the Company or otherwise obtain
from the Company, with or without consideration,
any additional shares of any equity security of
the Company or securities exercisable for or
convertible into shares of any equity security of
the Company (other than as part of a pro rata
distribution to all holders of Common Stock), (3)
shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise dispose (in one or
more transactions), to, from or with, as the case
may be, the Company or any of its subsidiaries,
assets on terms and conditions less favorable to
the Company than the Company would be able to
obtain in arm's-length negotiation with an
unaffiliated third party, (4) shall engage in any
transaction with the Company involving the sale,
purchase, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction
or a series of transactions), other than
incidental to the lines of business currently
engaged in as of the date hereof by the Company
and such Acquiring Person or Associate or
Affiliate, of assets having an aggregate fair
market value of more than $1,000,000, (5) shall
receive any compensation from the Company or any
of the Company's subsidiaries other than
compensation for full-time employment as a regular
employee at rates in accordance with the Company's
(or its subsidiaries') past practices, or (6)
shall receive the benefit, directly or indirectly
(except proportionately as a shareholder), of any
loans, advances, guarantees, pledges or other
financial assistance of any tax credits or other
tax advantage provided by the Company or any of
its subsidiaries, or
(C) at any time after a Stock Acquisition
Date and during such time as there is an Acquiring
Person, there shall be any reclassification of
securities (including any reverse stock split), or
recapitalization of the Company (whether or not
such reclassification or recapitalization occurs
in a merger in which the Company survives), or any
repurchase by the Company or any of its
subsidiaries of shares of Common Stock, or any
other class or series of securities issued by the
Company, or any merger or consolidation of the
Company with any of its subsidiaries or other
transaction or series of transactions involving
the Company (whether or not with or into or
otherwise involving an Acquiring Person or any
Affiliate or Associate thereof but excluding a
tender offer or exchange offer of the nature
described in clause (A) above) which has the
effect, directly or indirectly, of increasing by
more than one percent (1%) the proportionate share
of the outstanding shares of any class of equity
securities of the Company or any of its
subsidiaries which is directly or indirectly
beneficially owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person, or
(D) at any time after a Stock Acquisition
Date and during such time as there is an Acquiring
Person, (1) there shall be any reduction in the
dividend paid on the shares of Common Stock
(except as necessary for valid business reasons or
to reflect any subdivision of the shares of Common
Stock or as required under the laws of the
Company's jurisdiction of incorporation), or (2)
there shall be a failure to increase the annual
rate of dividends as necessary to reflect any
reclassification (including any reverse stock
split), recapitalization, reorganization or any
similar transaction which has the effect of
reducing the number of outstanding shares of
Common Stock (except as necessary for valid
business reasons or except to the extent such
increase in the rate of dividends would be
prohibited under the laws of the Company's
jurisdiction of incorporation;
then, promptly following the first occurrence of a
Section 11(a)(ii) Event, proper provision shall be made
so that each holder of a Right (except as provided
below and in Section 7(e) hereof) shall thereafter have
the right to receive (subject to Section 11(a)(iii)
hereof), upon exercise thereof at the then current
Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of
a share of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase
Price by the then number of one-hundredths of a share
of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which,
following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by 50% of the
current market price (determined pursuant to Section
11(d) hereof) per share of Common Stock on the date of
such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) If the number of shares of Common Stock
which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the
Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company
shall take all such action as may be necessary to
authorize additional shares of Common Stock for
issuance upon exercise of the Rights, including the
calling of a meeting of stockholders; provided,
________
however, that if the Company is unable to, or for any
_______
reason does not promptly, cause the authorization of a
sufficient number of additional shares of Common Stock,
or is unable for any reason to issue shares of Common
Stock upon the exercise of the Rights, then, if the
Rights become exercisable as provided in Section 7(a),
notwithstanding any of the provisions of this
Agreement, the Company, with respect to each Right and
to the extent necessary under and permitted by
applicable law and any agreements or instruments in
effect on the Distribution Date to which it is a party,
shall: (A) determine the excess of (1) the value of
the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price
(such excess, the "Spread"), and (B) with respect to
each Right, make adequate provision to substitute for
the Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without
limitation, shares, or units of shares, of preferred
stock which the Board of Directors of the Company has
determined in good faith to have the same value as
shares of Common Stock (such shares of preferred stock,
"common stock equivalents")), (4) debt securities of
the Company, (5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company
based upon the advice of a nationally recognized
banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not
________
have made adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following
the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as
the "Section 11(a)(ii) Trigger Date"), then the
Company, as liquidated damages and in complete
satisfaction of all claims and liabilities that may
arise in favor of the holders of the Rights as a result
of not having made such adequate provision, shall be
obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the
Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that
sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek shareholder
approval for the authorization of such additional
shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to
the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may
suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek
any authorization of additional shares and/or to decide
the appropriate form of distribution to be made
pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating
that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the value of
the Common Stock shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share
of the Common Stock on the Section 11(a)(ii) Trigger
Date and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common
Stock on such date.
(b) If the Company shall fix a record date for
the issuance of rights, options or warrants to all
holders of Preferred Stock entitling them to subscribe
for or purchase (for a period expiring within forty-
five (45) calendar days after such record date)
Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred
Stock ("equivalent preferred stock")) or securities
convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock
or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible
into Preferred Stock or equivalent preferred stock)
less than the current market price (as determined
pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date, the Purchase Price
to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus
the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares
of Preferred Stock and/or equivalent preferred stock so
to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered)
would purchase at such current market price, and the
denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock
and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible
securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form
other than cash, the value of such consideration shall
be as determined in good faith by the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned
by or held for the account of the Company 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 or warrants are not so
issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for a
distribution to all holders of Preferred Stock
(including any such distribution made in connection
with a consolidation or merger in which the Company is
the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash
dividend out of the earnings or retained earnings of
the Company and in an amount not exceeding 125% of the
next previous regular quarterly cash dividend), assets
(other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof),
the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the
current market price (as determined pursuant to Section
11(d) hereof per share of Preferred Stock on such
record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the
denominator of which shall be such current market price
(as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock. Such adjustments shall be
made successively whenever such a record date is fixed,
and in the event that such distribution is not so made,
the Purchase Price shall be adjusted to be the Purchase
Price which would have been in effect if such record
date had not been fixed.
(d)(i) For the purpose of any computation
hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the "current market price"
per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share
of such Common Stock for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii)
hereof, the "current market price" per share of Common
Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock
for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that if the
________
current market price per share of the Common Stock is
determined during a period following the announcement
by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of
such Common Stock or securities convertible into shares
of such Common Stock (other than the Rights), or (B)
any subdivision, combination or reclassification of
such Common Stock, and prior to the expiration of the
requisite thirty (30) Trading Day or ten (10) Trading
Day period, as set forth above, after the ex-dividend
date for such dividend or distribution or the record
date for such subdivision, combination or
reclassification, then, and in each such case, the
"current market price" shall be properly adjusted, to
take into account ex-dividend trading. The closing
price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the
principal consolidated transaction reporting system
with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the
shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system
with respect to securities listed on the principal
national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if
the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-
counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on
any such date the shares of Common Stock 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 Common Stock
selected by the Board of Directors of the Company. If
on any such date no market maker is making a market in
the Common Stock, the fair value of such shares on such
date as determined in good faith by the Board of
Directors of the Company shall be used. The term
"Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of
Common Stock are not listed or admitted to trading on
any national securities exchange, a Business Day. If
the Common Stock is not publicly held or not so listed
or traded, "current market price" per share shall mean
the fair value per share as determined in good faith by
the Board of Directors of the Company, whose
determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation
hereunder, the "current market price" per share of
Preferred Stock shall be determined in the same manner
as set forth above for the Common Stock in clause (i)
of this Section 11(d) (other than the last sentence
thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not
publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the "current
market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as
such number may be appropriately adjusted for such
events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied
by the current market price per share of the Common
Stock. If neither the Common Stock nor the Preferred
Stock is publicly held or so listed or traded, "current
market price" per share of the Preferred Stock shall
mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the
"current market price" of one one-hundredth of a share
of Preferred Stock shall be equal to the "current
market price" of one share of Preferred Stock divided
by 100.
(e) 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 one percent (1%) in
the Purchase Price; provided, however, that any
________
adjustments which by reason of this Section 11(e) are
not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a
share of Common Stock or other share or one-millionth
of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three (3)
years from the date of the transaction which mandates
such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the
holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other
than Preferred Stock, thereafter the number of such
other shares so receivable upon exercise of any Right
and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions
with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k)
and (m), and the provisions of Sections 7, 9, 10, 13
and 14 hereof with respect to Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-
hundredths of a share of Preferred Stock purchasable
from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each
adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number
of one one-hundredths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-hundredths of
a share of Preferred Stock covered by a Right
immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the
product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase
Price.
(i) The Company 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-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of
one one-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest 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 Company shall
make a public announcement of its election to adjust
the number of Rights, indicating the record date for
the adjustment and, if known at the time, the amount of
the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i),
the Company shall, as promptly as practicable, cause to
be distributed to holders of record of Rights
Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement
for the Rights Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall
be entitled after such, adjustment. Rights
Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates
on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths
of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to
express the Purchase Price per one one-hundredth of a
share and the number of one one-hundredths of a share
which were expressed in the initial Rights Certificates
issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then
stated value, if any, of the number of one one-
hundredths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may
validly and legally issue fully paid and non-assessable
such number of one one-hundredths of a share of
Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be
made effective as of a record date for a specified
event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of
any Right exercised after such record date the number
of one one-hundredths of a share of Preferred Stock and
other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the
number of one one-hundredths of a share of Preferred
Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall
________
deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive
such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make
such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section
11, as and to the extent that in their good faith
judgment the Board of Directors of the Company shall
determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock,
(ii) issuance wholly for cash of any shares of
Preferred Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Preferred
Stock or securities which by their terms are
convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such
stockholders.
(n) The Company 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 Company in a transaction which
complies with Section 11(o) hereof), (ii) merge with or
into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section
11(o) 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 Company and its Subsidiaries
(taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with
Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger, sale or
transfer there are any rights, warrants or other
instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger, sale or
transfer, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party"
for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted
by Section 23 or Section 26 hereof, take (or permit any
Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, if the Company shall at any time after
the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of
Common Stock, or (iii) combine the outstanding shares
of Common Stock into a smaller number of shares, the
number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock
following any such event shall equal the result
obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to
such event by a fraction the numerator of which shall
be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total
number of shares of Common Stock outstanding
immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or
_________________________________________
Number of Shares. Whenever an adjustment is made as provided in
________________
Section 11 and Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent, and with each transfer agent
for the Preferred Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder
of a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common
Stock) in accordance with Section 25 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.
_______________________
(a) If, on or after the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with,
or merge with and into any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person
(other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or
merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger, all
or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Company
shall sell 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 Company and its Subsidiaries (taken as a whole) to
any Person or Persons (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case, proper
provision shall be made so that: (i) each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have
the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradeable shares of Common Stock
of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of
one one-hundredths of a share of Preferred Stock for which a
Right is exercisable immediately prior to the first occurrence of
a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying
the number of such one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the Purchase
Price in effect immediately prior to such first occurrence), and
dividing that product (which, following the first occurrence of a
Section 13 Event, shall be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by (2) 50%
of the current market price (determined pursuant to Section
11(d)(i) hereof) per share of the Common Stock of such Principal
Party on the date of consummation of such Section 13 Event
(except as provided below, such number of shares to be
appropriately adjusted in a manner analogous to the applicable
adjustment in the Purchase Price provided for in Section 11 if
during the two-year period after the date of consummation an
event of a type analogous to any of the events described in
Section 11 shall have occurred with respect to such shares); (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 Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) 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 its shares of
Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section
13(a), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other
Party to such merger or consolidation (including, if
applicable, the Company, if it is the surviving
corporation); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock
________
of such Person is not at such time and has 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 Stock of which
is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market
value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) 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
Expiration Date; and
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party
and each of its Affiliates which comply in all respects
with the requirements for registration on Form 10 under
the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to
the contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons who
acquired shares of Common Stock pursuant to a tender offer or
exchange offer for all outstanding shares of Common Stock which
complies with the provisions of Section 11(a)(ii)(A) hereof (or a
wholly owned subsidiary of any such Person or Persons), (ii) the
price per share of Common Stock offered in such transaction is
not less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased
pursuant to such tender offer or exchange offer, and (iii) the
form of consideration being offered to the remaining holders of
shares of Common Stock pursuant to such transaction is the same
as the form of consideration paid pursuant to such tender offer
or exchange offer or if such transaction is at a price and on
terms determined by at least a majority of the members of the
Board of Directors to be (i) at a price which is fair to
stockholders (taking into account all factors which such members
of the Board deem relevant including, without limitation, prices
which could reasonably be achieved if the Company or its assets
were sold on an orderly basis designed to recognize maximum
value) and (ii) otherwise in the best interests of the Company
and its stockholders. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall
expire.
(e) In no event shall the Rights Agent have any
liability in respect of any such Principal Party transactions,
including, without limitation, the propriety thereof. The Rights
Agent may rely and be fully protected in relying upon a
certificate of the Company stating that the provisions of this
Section 13 have been fulfilled. Notwithstanding anything in this
Agreement to the contrary, the prior written consent of the
Rights Agent must be obtained in connection with any supplemental
agreement which alters the rights or duties of the Rights Agent.
Section 14. Fractional Rights and Fractional Shares.
_______________________________________
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as
provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right.
For purposes of this Section 14(a), the current market value of 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 of the Rights for any day shall be the last sale
price, regular way, or if no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use, or, if on any such date
the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights the fair value
of the Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth of a share of
Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock). In lieu of fractional
shares of Preferred Stock that are not integral multiples of one
one-hundredth of a share of Preferred Stock, the Company may pay
to the registered holders of Rights 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 one-
hundredth of a share of Preferred Stock. For purposes of this
Section 14(b), the current market value of one one-hundredth of a
share of Preferred Stock shall be one one-hundredth of the
closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering
Event, the Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights 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 (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common
Stock shall be the closing price of one share of Common Stock (as
determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of
the Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right, except
as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
________________
respect of this Agreement, other than rights of action vested in
the Rights Agent pursuant to Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any person subject to
this Agreement.
Section 16. Agreement of Rights Holders. Every holder
___________________________
of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
Common Stock;
(b) after the Distribution Date, the Rights
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 purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or other Person as 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, the Company
________
must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
______________________________________
Stockholder. No holder, as such, of any Rights Certificate shall
___________
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of one one-hundredths of a share
of Preferred Stock or any other securities of the Company which
may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 24 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
___________________________
(a) The Company shall pay to the Rights Agent
such compensation as shall be agreed to in writing between the
Company and the Rights Agent for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution
of this Agreement and the exercise and performance of its duties
hereunder. The Company also shall indemnify the Rights Agent
for, and hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including, without limitation,
the cost and expenses of defending against any claim (whether
asserted by the Company, a holder of Rights, or any other Person)
of liability in the premises including reasonable attorney's fees
and expenses.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, instruction, direction,
consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed and executed by the
proper Person or Persons. The provisions of this Section 18
shall survive the expiration of the Rights and the termination of
this Agreement.
Section 19. Merger or Consolidation or Change of Name
_________________________________________
of Rights Agent.
_______________
(a) Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to all or
substantially all the corporate trust or stock transfer 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, however, 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 Rights 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 Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in
the name of the predecessor or in the name of the successor
Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the Rights
Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
______________________
undertakes the duties and obligations expressly imposed by this
Agreement, and no implied duties or obligations shall be read
into this Agreement against the Rights Agent, upon the following
terms and conditions, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal
counsel of its selection (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of
"current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the
Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own gross negligence, bad faith or willful
misconduct; provided, however, that the Rights Agent shall not be
liable for any indirect, special, consequential or punitive
damages.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals contained
in this Agreement or in the Rights Certificates or be required to
verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for 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 Rights Certificates after the
Rights Agent's actual receipt of the certificate described in
Section 12 hereof setting forth any such adjustment); nor shall
it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares
of Common Stock or Preferred Stock will, when so issued, be
validly authorized and issued, fully paid and non-assessable, nor
shall the Rights Agent be responsible for the legality of the
terms hereof in its capacity as an administrative agent.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance
of its duties hereunder from the Chairman of the Board, the
President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under
this Rights Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified
in such application (which date shall not be less than five
business days after the date any such officer of the Company
actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy, sell
or deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however,
________
reasonable care was exercised in the selection thereof.
(j) 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.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate contained in the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without first
consulting with the Company.
(l) In addition to the foregoing, the Rights
Agent shall be protected and shall incur no liability for, or in
respect of, any action taken or omitted by it in connection with
its administration of this Agreement if such acts or omissions
are in reliance upon (i) the proper execution of the
certification concerning beneficial ownership appended to the
form of assignment and the form of election to purchase attached
hereto unless the Rights Agent shall have actual knowledge that,
as executed, such certification is untrue, or (ii) the
non-execution of such certification including, without
limitation, any refusal to honor any otherwise permissible
assignment or election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent
prompt written notice of any event or ownership which would
prohibit the exercise or transfer of the Rights Certificates.
Section 21. Change of Rights Agent. The Rights Agent
______________________
or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company. The Company may remove the Rights
Agent or any successor Rights Agent upon thirty (30) days' notice
in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common
Stock and Preferred Stock, by registered or certified mail, and
to the holders of the Rights Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then the Rights Agent
or any registered holder of any Rights Certificate may, at the
expense of the Company apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a corporation organized and doing
business under the laws of the United States, the State of Ohio
or of the State of New York (or of any other state of the United
States so long as such corporation is authorized to do business
as a banking institution in the State of Ohio or the State of New
York ), in good standing, and having a principal office in the
State of Ohio or the State of New York, which is authorized under
such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000 or (b) an
affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stock, and mail a notice thereof
in writing to the registered holders of the Rights 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 Rights Certificates.
___________________________________
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights 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
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue
Rights Certificates representing the appropriate,number of Rights
in connection with such issuance or sale; provided, however, that
________
(i) no such Rights Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights
Certificate would be issued, and (ii) no such Rights 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.
__________________________
(a) The Board of Directors of the Company may, at
its option, at any time prior to the earlier of (i) the close of
business on the twentieth day following the Stock Acquisition
Date (or, if the Stock Acquisition Date shall have occurred prior
to the Record Date, the close of business on the twentieth day
following the Record Date), or (ii) the Final Expiration Date,
redeem all but not less than all 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"). In addition, the Board of Directors of the Company may
redeem all but not less than all of the then outstanding Rights
at the Redemption Price following the occurrence of a Stock
Acquisition Date but prior to any Section 13 Event in connection
with any Section 13 Event in which all holders of Common Stock
are treated alike and not involving an Acquiring Person or an
Affiliate or Associate of any Acquiring Person or any other
Person in which such Acquiring Person, Affiliate or Associate has
any interest, or any other Person acting directly or indirectly
on behalf of or in association with any such Acquiring Person,
Affiliate or Associate. If, following the occurrence of a Stock
Acquisition Date and following the expiration of the right of
redemption hereunder but prior to any Triggering Event, (i) a
Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one
transaction or series of transactions, not directly or indirectly
involving the Company or any of its Subsidiaries, which did not
result in the occurrence of a Triggering Event such that such
Person is thereafter a Beneficial Owner of 10% or less of the
outstanding shares of Common Stock, and (ii) there are no other
Persons, immediately following the occurrence of the event
described in clause (i), who are Acquiring Persons, then the
right of redemption shall be reinstated and thereafter be subject
to the provisions of this Section 23. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not
be exercisable after the first occurrence of an event described
in Section 11(a)(ii)(A) until such time as the Company's right of
redemption hereunder has expired. The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock
(based on the "current market price", as defined in Section
11(d)(i) hereof, of the Common Stock at the time of redemption)
or any other form of consideration deemed appropriate by the
Board of Directors.
(b) Immediately upon the action of the Board of
Directors of the Company 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. Promptly after the action of the Board
of Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Subsidiaries shall
redeem, acquire or purchase for value any Rights at any time or
in any manner other than the specifically set forth in this
Section 23 and other than in connection with the purchase of
shares of Common Stock prior to the Distribution Date.
Section 24. Notice of Certain Events.
________________________
(a) In case the Company shall propose, at any
time after the Distribution Date, (i) to pay any dividend payable
in stock of any class to the holders of Preferred Stock or to
make any other distribution to the holders of Preferred Stock
(other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with
Section 11(o) 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 transaction or a series of related
transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate and to the Rights Agent, to the extent feasible and
in accordance with Section 25 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the
shares of Preferred Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least twenty (20) days prior to
the record date for determining, holders of the shares of
Preferred Stock for purposes of such action, and in the case of
any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred
Stock, whichever shall be the earlier.
(b) In case any of the events set forth in
Section 11(a)(ii) hereof shall occur, then, in any such case, (i)
the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate and to the Rights Agent, to the
extent feasible and in accordance with Section 25 hereof, a
notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter
to refer to Common Stock and/or, if appropriate, other
securities.
Section 25. Notices. Notices or demands authorized by
_______
this Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Xxxxxx Greetings, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00X
Attention: Stock Xxxxxxxx Xxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock) shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
__________________________
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of any such
Person); provided, 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 Company which
states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final
Expiration Date, the Purchase Price (except as provided in
Sections 11(a)(iii) or 11(a)(iv) hereof) or the number of one
one-hundredths of a share of Preferred Stock for which a Right is
exercisable. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock. Notwithstanding any
other provision hereof, the Rights Agent's consent must be
obtained regarding any amendment or supplement pursuant to this
Section 26 which alters the Rights Agent's rights or duties.
Section 27. Successors. All the covenants and
__________
provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of
__________________________________________
Directors, etc. For all purposes of this Agreement, any
_______________
calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board
of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board of Directors of the
Company or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions
of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement
(including, but not limited to, a determination to redeem or not
redeem the Rights or to amend this Agreement). All such actions,
calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors of
the Company in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in
__________________________
this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution,Date,
registered holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 30. Severability. If any term, provision,
____________
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
________
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors of the Company.
Section 31. Governing Law. This Agreement, each Right
_____________
and each Rights 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 made and to
be performed entirely within such State, except for Sections 18,
19, 20 and 21 hereof which for all purposes shall be governed by
and construed under the laws of the State of New York.
Section 32. Counterparts. This Agreement may be
____________
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive
____________________
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
XXXXXX GREETINGS, INC.
By /s/ Xxxxx X'Xxxxxxx
________________________________
Name: Xxxxx X'Xxxxxxx
Title: Chief Executive Officer
THE BANK OF NEW YORK,
As Rights Agent
By /s/ Xxxxxx X. Xxxx
________________________________
Name: Xxxxxx X. Xxxx
Title: Vice President
Exhibit A
_________
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES B PREFERRED STOCK
of
XXXXXX GREETINGS, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Xxxxx X. X'Xxxxxxx, President, and Xxxxxx X.
Xxxxxxxx, Secretary, of Xxxxxx Greetings, Inc., 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 by the Restated Certificate of Incorporation of the
said Corporation, the said Board of Directors on August 26, 1999,
adopted the following resolution creating a series of 200,000
shares of Preferred Stock designated as Series B Preferred Stock:
RESOLVED, that pursuant to the authority
vested in the Board of Directors of the
Corporation by the Restated Certificate of
Incorporation, the Board of Directors does
hereby provide for the issue of a series of
Preferred Stock, $1.00 par value, of the
Corporation, to be designated "Series B
Preferred Stock" (hereinafter referred to as
the "Series B Preferred Stock"), initially
consisting of 200,000 shares, and to the
extent that the designations, powers,
preferences and relative and other special
rights and the qualifications, limitations
and restrictions of the Series B Preferred
Stock are not stated and expressed in the
Restated Certificate of Incorporation, does
hereby fix and herein state and express such
designations, powers, preferences and
relative and other special rights and the
qualifications, limitations and restrictions
thereof, as follows (all terms used herein
which are defined in the Restated Certificate
of Incorporation shall be deemed to have the
meanings provided therein):
Section 1. Designation and Amount. The shares of such
______________________
series shall be designated as "Series B Preferred Stock" and the
number of shares constituting such series shall be 200,000.
Section 2. Dividends and Distributions.
___________________________
(A) 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 B Preferred
Stock with respect to dividends, the holders of shares of Series
B Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the 15th
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 B Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $0.25
or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, par
value $.01 per share, of the Corporation (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 B Preferred Stock. In the event the Corporation shall at
any time after August 26, 1999 (the "Rights Declaration Date")
(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 amount to which holders of
shares of Series B Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in
paragraph (A) 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 $0.25 per share on the Series B Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series B Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series B 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 B 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
B 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
B Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of
_____________
Series B Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series B Preferred Stock
shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders of the Corporation. If
the Corporation shall at any time after the Rights Declaration
Date (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 number of votes per share
to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein or by
law, the holders of shares of Series B 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.
(C) (i) If at any time dividends on any Series B
Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency
shall xxxx the beginning of a period (herein called a "default
period") which shall extend until such time when all accrued and
unpaid dividends for all previous quarterly dividend periods and
for the current quarterly dividend period on all shares of Series
B Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series B
Preferred Stock) with dividends in arrears in an amount equal to
six (6) quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two (2)
Directors.
(ii) During any default period, such voting right
of the holders of Series B Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph
(iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the
holders of any other series of Preferred Stock, if any, to
increase, in certain cases, the authorized number of Directors
shall be exercised unless the holders of ten percent (10%) in
number of shares of Preferred Stock outstanding shall be present
in person or by proxy. The absence of a quorum of the holders of
Common Stock shall not affect the exercise by the holders of
Preferred Stock of such voting right. At any meeting at which
the holders of Preferred Stock shall exercise such voting right
initially during an existing default period, they shall have the
right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up
to two (2) Directors or, if such right is exercised at an annual
meeting, to elect two (2) Directors. If the number which may be
so elected at any special meeting does not amount to the required
number, the holders of the Preferred Stock shall have the right
to make such increase in the number of Directors as shall be
necessary to permit the election by them of the required number.
After the holders of the Preferred Stock shall have exercised
their right to elect Directors in any default period and during
the continuance of such period, the number of Directors shall not
be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of
any equity securities ranking senior to or pari passu with the
____ _____
Series B Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect Directors, the Board of Directors may order,
or any stockholder or stockholders owning in the aggregate not
less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request,
the calling of special meeting of the holders of Preferred Stock,
which meeting shall thereupon be called by the President, a
Vice-President or the Secretary of the Corporation. Notice of
such meeting and of any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant to this paragraph
(C)(iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him at his last address
as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 20 days and
not later than 60 days after such order or request or in default
of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred
Stock outstanding. Notwithstanding the provisions of this
paragraph (C)(iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date
fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) Directors voting as a
class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and
(y) any vacancy in the Board of Directors may (except as provided
in paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director whose
office shall have become vacant. References in this paragraph
(C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a
class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the certificate of incorporation
or by-laws irrespective of any increase made pursuant to the
provisions of paragraph (C)(ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner
provided by law or in the certificate of incorporation or
by-laws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence
may be filled by a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series B
Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
____________________
(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series B 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 B Preferred Stock
outstanding shall have been paid in full, the Corporation shall
not
(i) declare or pay dividends on, make any
other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B
Preferred Stock;
(ii) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Preferred
Stock, except dividends paid ratably on the Series B
Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Preferred
Stock, provided that the corporation may at any time
redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock
of Corporation ranking junior (either as to dividends
or upon dissolution, liquidation or winding up) to the
Series B Preferred Stock;
(iv) purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock,
or any shares of stock ranking on a parity with the
Series B Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend
rates and other relative rights and preferences of the
respective series and classes, shall determine in good
faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire
for consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series B
_________________
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
______________________________________
(A) Upon any liquidation (voluntary or
otherwise), dissolution or winding up of the Corporation, 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 B Preferred Stock
unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment
(the "Series B Liquidation Preference"). Following the payment
of the full amount of the Series B Liquidation Preference, no
additional distributions shall be made to the holders of shares
of Series B Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share
(the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series B Liquidation Preference by (ii) 100 (as
appropriately adjusted as set forth in subparagraph C below 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 B Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Series
B Preferred Stock and Common Stock, respectively, holders of
Series B Preferred Stock and holders of shares 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.
(B) If, however, there are not sufficient assets
available to permit payment in full of the Series B Liquidation
Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series B
Preferred Stock, then such remaining assets shall be distributed
ratably to 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 Common Adjustment, then such remaining assets
shall be distributed ratably to the holders of Common Stock.
(C) If the Corporation shall at any time after
the Rights Declaration Date (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. If 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 B Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to
the provision for adjustment hereinafter set forth) equal to 100
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.
If the Corporation shall at any time after the Rights Declaration
Date (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 amount set forth in the
preceding sentence with respect to the exchange or change of
shares of Series B Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series B
_____________
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series B 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 Restated Certificate of
_________
Incorporation of the Corporation shall not be further amended in
any manner which would materially alter or change the powers,
preferences or special rights of the Series B 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
B Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series B Preferred
_________________
Stock may be issued in fractions of a share which shall entitle
the holder, in proportion to such holders fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series B Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed
this Certificate and do affirm the foregoing as true under the
penalties of perjury this _____ day of ________, 1999.
________________________________
Xxxxx X. X'Xxxxxxx
President
Attest:
_____________________________
Xxxxxx X. Xxxxxxxx
Secretary
Exhibit B
_________
[Form of Rights Certificate]
Certificate No. R- _____Rights
NOT EXERCISABLE AFTER AUGUST 31, 2009 OR EARLIER IF REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY
THIS RIGHTS 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 RIGHTS CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
Rights Certificate
XXXXXX GREETINGS, 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 September 8, 1999 (the "Rights Agreement"), between
Xxxxxx Greetings, Inc., a Delaware corporation (the "Company"),
and The Bank of New York, a New York banking corporation (the
"Rights Agent"), to purchase from the Company at any time prior
to 5:00 P.M. (New York time) on August 31, 2009 at the office or
offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-hundredth of a fully paid,
non-assessable share of Series B Preferred Stock (the "Preferred
Stock") of the Company, at a purchase price of $25.00 per one
one-hundredth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly
executed. The Purchase Price may be paid in cash or by
certified bank check or money order payable to the order of the
Company. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of
September 8, 1999, based on the Preferred Stock as constituted at
such date.
* The legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Person
(as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate,
or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer,
became an Acquiring Person or an Affiliate or Associate of any
such Person, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other
securities, which may be purchased upon the exercise of the
Rights evidenced by this Rights 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 Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights 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 above-mentioned
office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the
Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a
like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights
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
Company at its option at a redemption price of $.01 per Right at
any time prior to the earlier of the close of business on (i) the
twentieth day following the Stock Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and
(ii) the Final Expiration Date. After the expiration of the
redemption period, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial
ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving
the Company.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock, which may, at the election of the
Company, 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 Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by an
authorized signatory of the Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
ATTEST: XXXXXX GREETING, INC.
_______________________ By: ____________________
Secretary Title:
Countersigned:
THE BANK OF NEW YORK
By:______________________________
Authorized Signatory Date: ___________________
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
__________________
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ______________________________________________
hereby sells, assigns and transfers unto ________________________
_________________________________________________________________
(Please print name and address of transferee)
_________________________________________________________________
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ___________________________________ Attorney, to transfer
the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated:___________________, ____
______________________________
Signature
Signature Guaranteed:
Certificate
___________
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person.
Date: __________________, _____________________________
Signature
Signature Guaranteed:
NOTICE
______
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
____________________________
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: XXXXXX GREETINGS, INC.
The undersigned hereby irrevocably elects to exercise
_____________________________ Rights represented by this Rights
Certificate to purchase the shares of Preferred Stock issuable
upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such
shares be issued in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________
(Please print name and address)
________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
_________________________________________________________________
Dated:___________________, ____
___________________________________
Signature
Signature Guaranteed:
Certificate
___________
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any
such Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or became an Acquiring Person or an Affiliate or Associate of any
such Person. Dated: _______________, ____
___________________________________
Signature
Signature Guaranteed:
NOTICE
______
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Exhibit C
_________
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On August 26, 1999, the Board of Directors of Xxxxxx
Greetings, Inc. (the "Company") declared a dividend distribution
of one Right for each outstanding share of Company Common Stock
to stockholders of record at the close of business on September
8, 1999 (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company a unit consisting of one
one-hundredth of a share (a "Unit") of Series B Preferred Stock,
par value $1.00 per share (the "Preferred Stock") at a Purchase
Price of $25.00 per Unit, subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and The Bank of New York,
as Rights Agent.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. The Rights are
not exercisable unless and until the events described below
occur. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 20 days
following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, after August 26, 1999
and without the prior consent of the Company's Board of
Directors, beneficial ownership of 15% (or, in the case of a
person or group which is a 15% stockholder on August 26, 1999,
25%) or more of the outstanding shares of Common Stock (the
"Stock Acquisition Date"), or (ii) 20 business days following the
commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 15% or more of
such outstanding shares of Common Stock.
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on August 31, 2009,
unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date
and, thereafter, the separate Rights Certificates alone will
represent the Rights. Except as otherwise determined by the
Board of Directors, only shares of Common Stock issued prior to
the Distribution Date will be issued with Rights.
If, at any time following the Distribution Date, (1)
the Company or any Acquiring Person publicly announces that a
Person has become the beneficial owner of more than 15% (or 25%
as described above) of the then outstanding shares of Common
Stock (except pursuant to an offer for all outstanding shares of
Common Stock which the directors determine to be fair to and
otherwise in the best interests of the Company and its
stockholders), (2) at any time after a Stock Acquisition Date,
the Company is the surviving corporation in a merger with an
Acquiring Person in which the Common Stock of the Company remains
outstanding and unchanged, or (3) at any time after a Stock
Acquisition Date, an Acquiring Person engages in one of a number
of self-dealing transactions specified in the Rights Agreement,
each holder of a Right will thereafter have the right to receive,
upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal
to two times the exercise price of the Right. Notwithstanding
any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or
(under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person will be null and
void. However, Rights are not exercisable following the
occurrence of any of the events set forth above until such time
as the Rights are no longer redeemable by the Company as set
forth below.
For example, at an exercise price of $25.00 per Right,
each Right not owned by an Acquiring Person (or by certain
related parties) following an event set forth in the preceding
paragraph would entitle its holder to purchase $50.00 worth of
Common Stock (or other consideration, as noted above) for $25.00.
Assuming that the Common Stock had a per share value of $10.00 at
such time, the holder of each valid Right would be entitled to
purchase five shares of Common Stock for $25.00.
If, at any time following a Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation
or in which the Company's outstanding stock is changed into stock
or other securities of another person or cash (other than a
merger which follows an offer described in the second preceding
paragraph), or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise,
common stock of the acquiring company having a value equal to two
times the exercise pride of the Right. The events set forth in
this paragraph and in the second preceding paragraph are referred
to as the "Triggering Events."
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are
granted certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market
price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at
least 1% of the Purchase Price. No fractional Units will be
issued and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right, at any time until
twenty days following the Stock Acquisition Date.
Notwithstanding the foregoing, the Board of Directors may redeem
the Rights if such redemption is incidental to a merger or other
business combination involving the Company but not involving an
Acquiring Person. After the redemption period has expired, the
Company's right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 10% or less of the
outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company. Immediately upon the
action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.01 redemption price.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be
taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for Common Stock (or
other consideration) of the Company or for common stock of the
acquiring company as set forth above.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company
prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights (excluding
the interests of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided, however,
________
that no amendment to adjust the time period governing redemption
shall be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement is available free of
charge from the Rights Agent. This summary description of the
Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
