EXHIBIT 1
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RELIASTAR FINANCIAL CORP.
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Rights Agent
Amended and Restated Rights Agreement
Dated as of February 11, 1999
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions................................................1
Section 2. Appointment of Rights Agent........................................5
Section 3. Issue of Right Certificates........................................5
Section 4. Form of Right Certificates.........................................7
Section 5. Countersignature and Registration..................................7
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Lost, Stolen, Destroyed or Mutilated Right
Certificates.......................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights......9
Section 8. Cancellation and Destruction of Right Certificates................10
Section 9. Reservation and Availability of Preferred Shares..................10
Section 10. Preferred Shares Record Date......................................11
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights..................................................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares........21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.............................................................21
Section 14. Fractional Rights and Fractional Shares...........................23
Section 15. Rights of Action..................................................24
Section 16. Agreement of Right Holders........................................25
Section 17. Right Certificate Holder Not Deemed a Shareholder.................26
Section 18. Concerning the Rights Agent.......................................26
Section 19. Merger or Consolidation or Change of Name of Rights Agent.........26
Section 20. Duties of Rights Agent............................................27
Section 21. Change of Rights Agent............................................29
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Section 22. Issuance of New Right Certificates................................30
Section 23. Redemption........................................................30
Section 23A. Exchange.........................................................31
Section 24. Notice of Certain Events..........................................33
Section 25. Notices...........................................................33
Section 26. Supplements and Amendments........................................34
Section 27. Successors........................................................34
Section 28. Benefits of this Agreement........................................34
Section 29. Severability......................................................35
Section 30. Governing Law.....................................................35
Section 31. Counterparts......................................................35
Section 32. Descriptive Headings..............................................35
Exhibit A -- Form of Right Certificate
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AMENDED AND RESTATED
RIGHTS AGREEMENT
Agreement, dated as of February 11, 1999 between RELIASTAR FINANCIAL
CORP., a Delaware corporation (the "Company"), and NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, a national banking association (the "Rights Agent"),
amending and restating a rights agreement dated as of October 7, 1988 between
the Company (the name of which was then The NWNL Companies, Inc.) and the Rights
Agent (the "Original Rights Agreement"), as amended on February 8, 1990 and
September 8, 1994.
The Board of Directors of the Company has authorized and declared a
distribution of one preferred share purchase right (individually a "Right" and
collectively the "Rights") pursuant to the Original Rights Agreement with one
Right being distributed for each Common Share (as hereinafter defined) of the
Company in connection with the Plan of Conversion and Reorganization, dated as
of July 7, 1988, as amended (the "Plan"), approved and adopted by the Board of
Directors of Northwestern National Life Insurance Company, a Minnesota
corporation ("NWNL"), each Right initially representing the right to purchase
one-tenth of a share of Series A Junior Participating Preferred Stock, without
par value, of the Company having the rights and preferences set forth in the
Certificate of Designations filed with the Delaware Secretary of State, as
amended, upon the terms and subject to the conditions set forth in the Original
Rights Agreement. The Board of Directors of the Company further authorized the
issuance of one Right (as such number may be adjusted pursuant to the provisions
of Section 11) with respect to each Common Share that shall become outstanding
between the date the Plan becomes effective in accordance with Part V of the
Plan (the "Effective Date") and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are defined in
Sections 3 and 7 hereof). As of the date hereof, each Right represents the right
to purchase one-twentieth of a share of Series A Preferred Stock, without par
value, of the Company.
The Board of Directors of the Company has determined to further amend
and restate the Original Rights Agreement, as previously amended by Amendments
to Rights Agreement dated as of February 8, 1990 and September 8, 1994, in
accordance with Section 26 thereof.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such
term is hereinafter defined) of 20% or more of the Common Shares of the Company
then outstanding, but shall not include (i) the Company, (ii) any wholly owned
Subsidiary (as such term is hereinafter defined) of the Company, (iii) any
employee benefit plan of the Company or of any Subsidiary of the Company, or
(iv) any entity holding Common Shares for or pursuant to the terms of any such
plan described in clause (iii) of this sentence, provided that the Board of
Directors may, by resolution, lower the thresholds set forth in this Section
1(a) and in Section 3(a) hereof from 20% to not less than the greater of (i) the
largest percentage of the outstanding Common Shares then known by the Company to
be beneficially owned by any Person (other than the Company, any wholly owned
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any entity holding Common Shares for or pursuant
to the terms of any such plan) plus .01% or (ii) 10%. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
Common Shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the Common Shares of the
Company then outstanding; provided, however, that if a Person shall, together
with all Affiliates or Associates of such Person, become the Beneficial Owner of
20% or more of the Common Shares of the Company then outstanding by reason of
share acquisitions by the Company and if such Person or such Person's Affiliates
or Associates shall, after such share acquisitions by the Company, become the
Beneficial Owner of any additional Common Shares of the Company, and,
immediately after becoming the Beneficial Owner of such additional Common
Shares, such Person shall, together with all Affiliates and Associates of such
Person, be the Beneficial Owner of 20% or more of the Common Shares of the
Company then outstanding, then such Person (unless such Person shall be (1) the
Company, (2) any wholly owned Subsidiary of the Company, (3) any employee
benefit plan of the Company or of any Subsidiary of the Company, or (4) any
entity holding Common Shares for or pursuant to the terms of any such plan
described in clause (3) of this sentence) shall be deemed an "Acquiring Person."
An entity other than the Company or any wholly owned Subsidiary of the Company
holding Common Shares for or pursuant to the terms of an employee benefit plan
of the Company or of any Subsidiary of the Company and in addition being the
Beneficial Owner of Common Shares that are not held for or pursuant to the terms
of any such plan shall be deemed to constitute an Acquiring Person,
notwithstanding anything herein stated, if, but only if, it, together with its
Affiliates and Associates, shall be the Beneficial Owner of 20% or more,
exclusive of those Common Shares held by it for or pursuant to the terms of any
such plan, of the Common Shares then outstanding. Notwithstanding the foregoing,
if the Board of Directors of the Company determines in good faith that a Person
who would otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), has become such inadvertently
(including, without limitation, because (A) such Person was unaware that it
beneficially owned a percentage of the Common Shares that would otherwise cause
such Person to be an "Acquiring Person" or (B) such Person was aware of the
extent of its Beneficial Ownership but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement), and without any
intention of changing or influencing control of the Company, and such Person
divests as
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promptly as practicable a sufficient number of Common Shares so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "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 (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", or have beneficial ownership of, any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, including without limitation
securities with respect to which such Person or any of such Person's Affiliates
or Associates has "beneficial ownership" pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act;
(ii) which such Person or any of such Person's Affiliates or Associates
has, directly or indirectly (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, whether or not in writing (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the exercise
of conversion rights, exchange rights, other rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own or to have beneficial
ownership of, any securities pursuant to subparagraph (i), (ii) or (iii) of this
paragraph (c) solely because such securities are tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote or dispose of (including without
limitation 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 or have beneficial ownership of, any
security pursuant to subparagraph (i), (ii) or (iii) of this paragraph (c)
solely because of the right to vote such security pursuant to an agreement,
arrangement or understanding if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or consent given to
such Person or any of such Person's Affiliates or Associates in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations under the Exchange Act and (2) is not also
then reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report) as being beneficially owned by such Person; or
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(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person (or
any of such Person's Affiliates or Associates) has any agreement, arrangement or
understanding, whether or not in writing (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities), for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in the final proviso to
subparagraph (ii) of this paragraph (c)) or disposing of any voting securities
of the Company.
Notwithstanding anything in these definitions of Beneficial Owner, beneficially
own or beneficial ownership to the contrary, the phrase "then outstanding," when
used with reference to a Person's beneficial ownership of securities of the
Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to beneficially own under this
Agreement.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York or Minnesota are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
Minneapolis, Minnesota time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., Minneapolis, Minnesota time, on
the next succeeding Business Day.
(f) "Common Shares", when used with reference to the Company, shall
mean shares of Common Stock, without par value, of the Company. "Common Shares",
when used with reference to any Person other than the Company, shall mean the
class or series of capital stock (or equity interest) with the greatest voting
power of such Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(h) "Final Expiration Date" shall have the meaning set forth in Section
7 hereof.
(i) "Person" shall mean any individual, firm, corporation, partnership
or other entity, and shall include any successor (by merger or otherwise) of
such entity.
(j) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, without par value, of the Company.
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(k) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(l) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a).
(m) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
(n) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or other equity interests entitled to vote in the election of directors (or
Persons with comparable responsibilities if the entity has no directors) is
beneficially owned, directly or indirectly, by such Person or otherwise
controlled by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the close of business on the 15th day
after the Shares Acquisition Date or (ii) the close of business on the 15th day
(or such later date as may be determined by action of the Board of Directors of
the Company prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than the Company, any wholly
owned Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) of, or of the first public announcement
of the intention of any Person (other than the Company, any wholly owned
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan) to commence (which intention shall not have been
withdrawn within five business days (as defined in Rule 14d-1 of the General
Rules and Regulations under the Exchange Act) after such public announcement), a
tender or exchange offer the consummation of which would result in beneficial
ownership by a Person (other than the Company, any wholly owned Subsidiary of
the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company or any entity holding Common Shares for or pursuant to the terms of
any such plan) of 20% or more of the then outstanding Common Shares (including
any such date that is after the date of this Agreement and prior to the issuance
of the Rights; the earlier of such dates being herein
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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 Common Shares registered in the names of the holders thereof,
whether certificates of the Company or outstanding certificates of NWNL that
upon effectiveness of the Plan represent Common Shares of the Company
("Outstanding NWNL Certificates") (which certificates shall also be deemed to be
Right Certificates when the context so requires) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more Right Certificates, in substantially the form of Exhibit A
hereto (the "Right Certificates"), evidencing one Right for each Common Share so
held, subject to adjustment pursuant to Section 11. In the event that an
adjustment in the number of Rights per Common Share has been made pursuant to
Section 11, at the time Right Certificates are distributed, the Company may, to
the extent provided in Section 14(a), make the necessary and appropriate
rounding adjustments (as set forth in Section 14(a)) so that Right Certificates
are distributed representing only whole numbers of Rights and pay cash in lieu
of fractional Rights pursuant to Section 14(a). As of and after the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) With respect to certificates representing Common Shares issued in
connection with the Plan, until the Distribution Date (or the earlier Redemption
Date or Final Expiration Date), the Rights will be evidenced by such
certificates registered in the names of the holders thereof. Until the
Distribution Date (or the earlier Redemption Date or Final Expiration Date), the
surrender for transfer of any certificate representing Common Shares (including
without limitation the surrender for transfer of any certificate for Common
Shares issued in connection with the Plan), with or without a copy of the
Summary of Rights distributed by the Company attached thereto, shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(c) Rights shall be issued in respect of all Common Shares that shall
become outstanding after the Effective Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date.
Certificates for Common Shares issued in connection with the Plan (other than
Outstanding NWNL Certificates) or after the Effective Date but prior to the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date shall have impressed on, printed on, written on or otherwise affixed to
them either (i) a legend authorized by Section 3(c) of the Original Agreement or
(ii) the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between ReliaStar
Financial Corp. (the "Company") and Norwest Bank Minnesota, National
Association, as amended and
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restated as of February 11, 1999 (the "Rights Agreement"), the terms of
which (including restrictions on the transfer of such Rights) are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive 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 without charge after receipt
of a written request therefor from such holder. Under certain
circumstances, as set forth in the Rights Agreement, Rights that are or
were acquired or beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof (as such terms are defined in the Rights
Agreement) may become null and void.
With respect to such certificates containing any such legend and Outstanding
NWNL Certificates, until the Distribution Date, the Rights associated with the
Common Shares represented by such certificates shall be evidenced by such
certificates alone, the registered holders of the Common Shares shall also be
the registered holders of the associated Rights and the surrender for transfer
of any such certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby. In the event that the
Company purchases or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such Common Shares shall be
deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be in substantially the form of Exhibit A hereto
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law 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 or to reflect
adjustments to the Rights made pursuant to this Agreement. Subject to the
provisions of Section 11 and Section 22 hereof, the initial Right Certificates,
whenever distributed, shall entitle the holders thereof to purchase such number
of Preferred Shares as shall be set forth therein at the price per one-twentieth
of a Preferred Share set forth therein (the price per one-twentieth of a
Preferred Share being herein called the "Purchase Price"), but the amount and
type of securities purchasable upon the exercise of each Right and the Purchase
Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chief Executive Officer, President, or any Executive or Senior Vice
President and
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by the Secretary or any Assistant Secretary, either manually or by facsimile
signature. The Right Certificates shall be countersigned, either manually or by
facsimile signature, by the Rights Agent and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed or whose facsimile signature shall appear on any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the signing of such Right Certificate,
shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at one of its offices in Minnesota or New York, New York,
books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Lost, Stolen, Destroyed or Mutilated Right Certificates.
(a) Subject to the provisions of Sections 11(a)(ii) and 14 hereof, at
any time after the close of business on the Distribution Date, and at or prior
to the close of business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates (other than those
Right Certificates representing Rights that have become void pursuant to Section
11(a)(ii) or that have been exchanged pursuant to Section 23A hereof) may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
Preferred Shares as the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Rights Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the
office or offices of the Rights Agent designated for such purpose. Thereupon the
Rights Agent shall, subject to Section 11(a)(ii) and 14 hereof, countersign and
deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment by the registered holder of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split-up, combination or exchange of Right Certificates. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer
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of any such surrendered Right Certificate until the registered holder shall have
duly completed and executed the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of such Right
Certificate or Affiliates or Associates thereof as the Company shall reasonably
request.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's or the Rights
Agent's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 11(a)(ii), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly completed and executed, to the Rights Agent at
the office or offices of the Rights Agent designated for such purpose, together
with payment of the Purchase Price for each one-twentieth of a Preferred Share
as to which Rights are exercised, at or prior to the earliest of (i) the close
of business on September 8, 2004 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date"), or (iii) the time at which such Rights are exchanged as provided in
Section 23A.
(b) The Purchase Price for each one-twentieth of a Preferred Share
pursuant to the exercise of a Right shall be $100, shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly completed and executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 9 hereof in cash, or by
certified check or bank cashiers' check or money order payable to the order of
the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Shares (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company
9
shall have elected to deposit the total number of Preferred Shares issuable upon
exercise of the Rights under this Agreement with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of
one-twentieths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional interests in shares in accordance with Section 14
hereof, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt, promptly
deliver such cash for fractional shares to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i) duly
completed and executed the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company.
Section 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares or any
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Preferred Shares held in treasury, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) The Company will prepare and file, as soon as practicable following
the Shares Acquisition Date, a registration statement under the Securities Act
of 1933, as amended (the "Act"), with respect to the Rights and the Company's
securities purchasable upon exercise of the Rights on an appropriate form, and
use its best efforts to cause such registration statement to (i) become
effective as soon as practicable after such filing, and (ii) 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 or (B) the Final 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 90 days after the date the registration statement is
filed, the exercisability of the Rights in order to permit the registration
statement to become effective. Upon 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. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained or the exercise thereof is not permitted under applicable law.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price and any applicable transfer
taxes), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax that may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax is
due.
Section 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares
11
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Preferred Shares transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Shares
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred 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) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date pursuant to the exercise of the
Rights, 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 (and any applicable transfer taxes), the aggregate
number and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred Shares
transfer books of the Company were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall the
consideration to be paid upon exercise of one Right be less than the aggregate
par value of the shares of capital stock of the Company issuable upon exercise
of one Right. If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 23A of this Agreement, in the event any Person
shall become an Acquiring Person (other than pursuant to any Section 13 Event
occurring
12
after the Distribution Date or within 15 days prior thereto), proper provision
shall be made so that each holder of a Right, subject to Section 11(a)(iii),
shall thereafter have a right to receive, upon exercise thereof by payment of
the amount equal to the product of the number of one-twentieths of a Preferred
Share which would otherwise be issuable upon exercise of a Right and the then
current Purchase Price in accordance with the terms of this Agreement, in lieu
of Preferred Shares, such number of Common Shares of the Company as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
number of one-twentieths of a Preferred Share for which a Right would otherwise
be then exercisable and (y) dividing that product by 50% of the then current per
share market price of the Company's Common Shares (determined pursuant to
Section 11(d)) on the date of such occurrence.
From and after the first occurrence of an event under this Section
11(a)(ii) or a Section 13 Event, any Rights that are beneficially owned by any
Acquiring Person (or any Associate or Affiliate thereof) or were beneficially
owned by any Acquiring Person (or any Associate or Affiliate thereof) after the
Acquiring Person became an Acquiring Person shall become null and void without
any further action and no holder of such Rights shall thereafter have any rights
to exercise such Rights or any other rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. No Right
Certificate shall be issued pursuant to Section 3 that represents Rights that
would be void pursuant to the preceding sentence; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate of such an Acquiring Person or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate
of such Acquiring Person whose Rights would be void pursuant to the preceding
sentence shall be canceled. The Company shall use all reasonable efforts to
insure that the provisions of this Section 11(a)(ii) are complied with, but
shall have no liability to any holder of a Right Certificate or other Person as
a result of its failure in good faith to make any determinations with respect to
an Acquiring Person or its Affiliates or Associates.
(iii) If, on the date the Rights first become exercisable for Common
Shares pursuant to Section 11(a)(ii) (the "Adjustment Date"), the Company does
not have sufficient authorized, unissued and unreserved Common Shares, or
unreserved Common Shares held in treasury, available to permit the exercise in
full of all Rights that are exercisable on the Adjustment Date for the number of
Common Shares per Right provided for in Section 11(a)(ii), then the Exercise
Price (as defined below) and the number of Common Shares to be delivered by the
Company upon exercise of a Right shall be further adjusted as provided in this
subparagraph (iii).
13
(1) Definitions:
(A) The "Aggregate Market Value" is the product of (i) the number
of Available Shares and (ii) the current per share market price of the Common
Shares on the Adjustment Date, determined as provided in Section 11(d).
(B) The "Available Shares" are the authorized, unissued and
unreserved Common Shares, or unreserved Common Shares held in treasury,
immediately prior to the Adjustment Date.
(C) The "Exercise Price" is the amount of the payment that must be
made by the holder of a Right in connection with the exercise of one Right
immediately prior to the Adjustment Date.
(D) The "Deficiency" is the amount by which (i) two times the
Exercise Price exceeds (ii) the quotient obtained by dividing the Aggregate
Market Value by the number of Rights remaining outstanding immediately prior to
the Adjustment Date (the "Remaining Rights") (which number shall not include the
Rights that are beneficially owned by any Acquiring Person (or any Associate or
Affiliate thereof) or were beneficially owned by any Acquiring Person (or any
Associate or Affiliate thereof) after the Acquiring Person became an Acquiring
Person that shall have become void pursuant to Section 11(a)(ii)).
(2) If the Deficiency is less than or equal to the Exercise Price, then
(A) the number of Common Shares to be delivered by the Company upon
exercise of a Right shall be adjusted to equal the number of Available Shares
divided by the number of Remaining Rights;
(B) the amount of cash required to be delivered by the holder of a
Right upon the exercise thereof shall be adjusted (the "New Exercise Price") to
equal the Exercise Price minus the Deficiency; provided, however, that in no
event will the New Exercise Price be less than the aggregate par value of the
Common Shares required to be delivered upon the exercise of one Right pursuant
to subparagraph (2)(A) above.
(3) If the Deficiency is greater than the Exercise Price, then
(A) the number of Common Shares to be delivered by the Company upon
exercise of a Right shall be adjusted to equal the quotient obtained by dividing
the Exercise Price by the current per share market price of the Common Shares on
the Adjustment Date; and the New Exercise Price shall equal the greater of $.01
per Common Share, or, if such shares have par value, the aggregate par value of
the Common Shares, required to be delivered upon the exercise of one Right.
14
(B) in lieu of issuing Common Shares (in whole or in part upon the
exercise of Rights) the Company may issue, upon the exercise of Rights at the
New Exercise Price, shares of preferred stock (which may include Preferred
Shares) of the Company (or fractions thereof) having substantially the same
value, voting rights, dividend rights and liquidation rights as the Common
Shares. To the extent that such shares of preferred stock (or fractions thereof)
are substituted for Common Shares upon exercise of the Rights following the
occurrence of an event described in Section 11(a)(ii) hereof, they shall be
substituted on a pro rata basis with respect to all Rights (other than Rights
that are beneficially owned by any Acquiring Person (or any Associate or
Affiliate thereof) or were beneficially owned by any Acquiring Person (or any
Associate or Affiliate thereof) after the Acquiring Person became an Acquiring
Person that shall have become void pursuant to Section 11(a)(ii) hereof.
Such shares of preferred stock shall not be included in Available
Shares, and all of the Available Shares shall be reserved, as of the Adjustment
Date, for issuance, on a pro rata basis, upon exercise of the Rights and may not
be substituted for with shares of preferred stock upon the exercise of any Right
except to the extent that the number of Common Shares required to be delivered
under subparagraph (3)(A) upon the exercise of such Right exceeds the quotient
obtained by dividing the number of Available Shares by the number of Remaining
Rights.
(4) In the event that there shall not be sufficient authorized but
unissued Common Shares, or unreserved Common Shares held in treasury, (or shares
of preferred stock the issuance of which is permitted under Section
11(a)(iii)(3)(B)) to permit the exercise in full of the Rights in accordance
with this subparagraph (iii), the Company shall use its best efforts to cause
the authorization of sufficient additional Common Shares or shares of preferred
stock to permit such exercise and, if the Board of Directors of the Company
shall determine in good faith that it is likely that sufficient additional
Common Shares or shares of preferred stock could be authorized to permit such
exercise, the Company may suspend the exercisability of the Rights for a period
not to exceed 90 days in order to seek any authorization of additional Common
Shares or shares of preferred stock. 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.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the current per share
market price of the Preferred Shares (as determined pursuant to Section 11(d))
on such record
15
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date, plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase, at such current market price, and the denominator of which shall be
the number of Preferred Shares outstanding on such record date, plus the number
of additional Preferred Shares and/or equivalent preferred shares to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Preferred Shares 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, options or warrants are not so issued, the
Purchase Price shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or cash or non-cash assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per share market price of the Preferred
Shares (as determined pursuant to Section 11(d)) 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 and shall be binding on the Rights Agent and the holders of Rights)
of the portion of the evidences of indebtedness or cash or non-cash assets so to
be distributed on, or of such subscription rights or warrants applicable to, one
Preferred Share, and the denominator of which shall be such current per share
market price of the Preferred Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such
16
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price that would then be in effect if such record date had not been
fixed.
(d)(i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution on such Security payable in
such Security or securities convertible into such Security (other than the
Rights) or (B) any subdivision, combination or reclassification of such
Security, and prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported on the
Nasdaq National Market or the Nasdaq SmallCap Market or such other system then
in use, or, if on any such date the Security is not quoted or reported by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Security selected by the
Board of Directors of the Company. Except as provided in Section 11(d)(ii) with
respect to Preferred Shares, if on any such day no market maker is making a
market in the Security, the fair value of such Security on such day 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) shall be
used in lieu of the closing price for such day. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) If the Preferred Shares are not publicly held or traded in a
manner described in Section 11(d)(i), then, notwithstanding anything to the
contrary provided in Section 11(d)(i), the "current per share market price" of
the Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares
17
as determined pursuant to Section 11(d)(i) multiplied by twenty (appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof). If neither the Common Shares nor the Preferred
Shares are publicly held or so listed or traded, the "current per share market
price" of the Preferred Shares 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
binding on the Rights Agent and the holders of the Rights.
(e) Anything herein to the contrary notwithstanding, except the third
sentence of this Section 11(e), no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a Common Share or other share or one hundred-thousandth of a
Preferred Share as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11, but for the first
sentence of this Section 11(e), shall be made no later than the earlier of (i)
three years from the date of the transaction that requires such adjustment or
(ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares contained in Section 11(a) through (c), (e), (g) through
(k) and (m) and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Shares shall apply on like terms to any such other shares.
(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 Preferred Shares (or
other securities) 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 Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one-twentieths of a
Preferred Share (calculated to the nearest one hundred-thousandth of a Preferred
Share) obtained by (i) multiplying (x) the number of one-twentieths of a share
covered by a Right immediately prior to such adjustment by (y) the Purchase
Price in effect immediately prior to such
18
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 substitution for any
adjustment in the number of Preferred Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one-twentieths of a Preferred
Share for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein, may bear, at the option of
the Company, the adjusted Purchase Price, and shall be registered in the names
of the holders of record of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Preferred Shares issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to express the
Purchase Price per one-twentieth of a share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one-twentieth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
19
(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 issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares 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 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 the Board of Directors of the Company shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Shares, (ii) issuance wholly for cash of any of the Preferred Shares at less
than the current market price, (iii) issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into or exchangeable
for Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred
Shares or (v) issuance of rights, options or warrants referred to in paragraph
(b) of this Section 11, hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such shareholders.
(n) Anything in this Agreement or the Rights to the contrary
notwithstanding, in the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (x) the
number of Preferred Shares purchasable upon proper exercise of each Right shall
be determined by multiplying the number of shares so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after such event
and (y) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected. If an event occurs which would require an
adjustment under Section 11(a)(ii) and this Section 11(n), the adjustments
provided for in this Section 11(n) shall be in addition and prior to any
adjustment required pursuant to Section 11(a)(ii).
20
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares or
the Preferred Shares a copy of such certificate and (c) if such adjustment is
made after the Distribution Date, mail a brief summary thereof to each holder of
record of a Right Certificate in accordance with Section 25 hereof. The Rights
Agent shall be fully protected in relying on such certificate and on any
adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event, after the Distribution Date or within 15 days prior
thereto, directly or indirectly,
(x) the Company shall consolidate with, or merge with and
into, any other Person, and the Company shall not be the continuing or
surviving corporation of such consolidation or merger,
(y) any Person shall consolidate with the Company, or merge
with and into the Company and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the
outstanding Common Shares of the Company held by existing shareholders
of the Company shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or money or any other
property (except as a result of the exercise of statutory dissenters'
rights), or
(z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or a
series of related transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company or one or more of its wholly owned Subsidiaries),
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof by payment of the amount equal
to the product of the number of one-twentieths of a Preferred Share which would
otherwise be issuable upon exercise of a Right and the then current Purchase
Price in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of validly authorized and issued, fully paid, nonassessable
and freely tradeable Common Shares of the Principal Party (as hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal or
adverse claims, as shall be equal to the result obtained by (x) multiplying the
then current
21
Purchase Price by the number of one-twentieths of a Preferred Share for which a
Right is, immediately prior to the occurrence of the Section 13 Event,
exercisable and (y) dividing that product by 50% of the then current per share
market price of the Common Shares of such Principal Party (determined pursuant
to Section 11(d)) on the date of consummation of such Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such merger, consolidation, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party; and (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares to permit the exercise of all outstanding
Rights) 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 Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clauses (x) or
(y) of the first sentence of Section 13(a), the Person (including,
without limitation, the Company as successor thereto or as the
surviving corporation) that is the issuer of any securities into which
Common Shares of the Company are converted in such merger or
consolidation, or if no securities are so issued, the Person that is
the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding 12
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Shares of which are
and have 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 Shares of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized, unreserved Common
Shares which have not been issued or are held in treasury 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
22
Section 13 and further providing that, as soon as practicable after the date of
any Section 13 Event, 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 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
earlier of (1) the date as of which the Rights are no longer
exercisable for such securities or (2) the Final Expiration Date;
(ii) 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; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there may be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed
23
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 on the Nasdaq National Market or the Nasdaq SmallCap Market or such
other system then in use or, if on any such date the Rights are not so quoted or
reported, 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 in lieu of the
closing price for such day.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions that are integral multiples of one-twentieth of a
Preferred Share, or, if a Right shall then be exercisable for a fraction other
than one-twentieth of a Preferred Share, integral multiples of that fraction)
upon exercise of the Rights or to issue certificates which evidence fractions of
Preferred Shares (other than fractions that are integral multiples of
one-twentieth of a Preferred Share, or if a Right shall be then exercisable for
a fraction other than one-twentieth of a Preferred Share, integral multiples of
that fraction). Fractions of Preferred Shares in integral multiples of
one-twentieth of a Preferred Share or, if a Right shall then be exercisable for
a fraction other than one-twentieth of a Preferred Share, integral multiples of
that fraction may, at the election of the Company, be evidenced by depositary
receipts pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one-twentieth of a Preferred Share,
or, if a Right shall then be exercisable for a fraction other than one-twentieth
of a Preferred Share, integral multiples of that fraction, the Company may pay
to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For purposes of this Section 14(b),
the current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly
waives such holder's right to receive any fractional Rights or any fractional
shares (except as provided above) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any
24
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in such holder's own behalf and for such holder's own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder's
right to exercise the Rights evidenced by such Right Certificate (or, prior to
the Distribution Date, the Common Shares certificate) in the manner provided in
such Right Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the Common
Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificate or the Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary;
(d) the Company may issue Rights after the Effective Date but prior to
the Distribution Date as provided in this Agreement; and
(e) notwithstanding anything in this Agreement or the Rights to the
contrary, the Company, the Rights Agent and the Board of Directors shall not
have any liability to any holder of a Right or other Person as a result of the
inability of the Company or the Rights Agent 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
25
promulgated or enacted by any governmental authority prohibiting or otherwise
restraining performance of such obligation.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense (including the costs and expenses of defending
against any claim of liability), incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of its counsel as set
forth in Section 20 hereof.
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
26
Rights Agent shall be a party, or any corporation succeeding to 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 Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates
(or, prior to the Distribution Date, the Common Shares certificates), by their
acceptance of the Rights, shall be bound:
(a) The Rights Agent may consult with legal counsel (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 the "current per share market price") be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chief Executive Officer, President or any
Executive or Senior Vice President of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the
27
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 to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 11, 13, 23 or 23A, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chief Executive Officer, President or any Executive or Senior Vice
President 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 delay in acting while waiting for those
instructions.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
28
securities of the Company or become pecuniarily interested in any transaction in
which the Company or its Subsidiaries may be interested, or contract with or
lend money to the Company or its Subsidiaries 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 its Subsidiaries 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 reasonable care was exercised in the selection
and continued employment 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 or
powers 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 form of assignment or form of election to
purchase, as the case may be, has either not been duly completed and executed or
indicates an affirmative response to enumerated clause 1 and/or 2 on the reverse
side of the applicable Right Certificate, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares and Preferred Shares by registered or certified mail, and,
if such notice is mailed after the Distribution Date, to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Shares and Preferred Shares by registered or certified mail,
and, if such notice is mailed after the Distribution Date, to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit such holder's Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent
29
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States or
of the State of Minnesota or 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 Minnesota or New York), in good standing, having an
office in the State of Minnesota or New York which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million 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 Shares and Preferred Shares, and, if such notice is filed after the
Distribution Date, mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) Subject to the provisions of Section 26, the Board of Directors of
the Company may, at its option, at any time prior to the earlier of (x) such
time as a Person becomes an Acquiring Person or (y) the close of business on the
Final Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $.005 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date of this Agreement (such redemption price being hereinafter referred to
as the "Redemption Price"). The Redemption Price shall be payable in cash by the
Company. The redemption of the Rights by the Board of Directors of the Company
may be made effective at such time and on such basis and with such conditions as
the Board of Directors of the Company in its sole discretion may establish.
Except for the obligation to pay the Redemption Price, the Board of Directors
and the
30
Company shall not have any liability to any Person as a result of the redemption
of Rights pursuant to the terms of this Section 23.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Directors of the Company 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 their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares; provided, however,
that any failure to give, or defect in, any such notice shall not affect the
validity of such redemption. Any notice which is mailed in the manner herein
provided shall be deemed given whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in
Section 23A, and other than in connection with the purchase of Common Shares
prior to the Distribution Date.
Section 23A. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after the Adjustment Date (as defined in Section 11(a)(iii)), exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that shall have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares (or Preferred Shares pursuant to paragraph
(c) of this Section 23A), with each Right to be exchanged for such number of
Common Shares as shall equal the result obtained by dividing (x) the Exercise
Price (as defined in Section 11(a)(iii)) by (y) the current per share market
price of the Common Shares (determined pursuant to Section 11(d)) on the
Adjustment Date (such number of shares being hereinafter referred to as the
"Exchange Ratio"). The Exchange Ratio shall be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction affecting the Common
Shares that occurs after the Adjustment Date. Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any time
after any Person (other than the Company, any wholly owned Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary, or any
entity holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
31
Section 23A and without any further action and without any notice, the right to
exercise such Rights shall terminate notwithstanding anything to the contrary
provided in Section 7 hereof, and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of Common Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which shall have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 23A, the Company, at its
option, may substitute Preferred Shares (or equivalent preferred shares, as such
term is defined in Section 11(b) hereof, or other preferred stock of the nature
described in Section 11(a)(iii)(3)(B) hereof) for Common Shares exchangeable for
Rights, at the initial rate of one-twentieth of a Preferred Share (or equivalent
preferred share) for each Common Share, as appropriately adjusted to reflect
stock splits, stock dividends or similar transactions affecting the Common
Shares that occur after the date of this Agreement.
(d) In the event that there shall not be sufficient Common Shares,
Preferred Shares, equivalent preferred shares or other preferred stock of the
nature described in Section 11(a)(iii)(3)(B) hereof, authorized, unreserved and
either unissued or held in treasury to permit any exchange of Rights as
contemplated in accordance with this Section 23A, the Company shall take all
such action as may be necessary to authorized additional Common Shares or
Preferred Shares, equivalent preferred shares or other preferred stock of the
nature described in Section 11(a)(iii)(3)(B) hereof for issuance upon exchange
of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company may pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 23A. The Board of Directors and the Company
shall not have any liability to any Person as a result of the exchange of Rights
pursuant to the terms of this Section.
32
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 its Preferred Shares or to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), or (ii)
to offer to the holders of its Preferred Shares rights or warrants to subscribe
for or to purchase any additional Preferred Shares or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), or (iv) to
effect any consolidation or merger into or with any other Person, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or a series of related transactions,
of 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons (other than the
Company and/or any of its wholly owned Subsidiaries), or (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise), then, in each such case, the Company shall give
to each holder of a Right Certificate, 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 or distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of the Preferred Shares
for purposes of such action, and in the case of any such other action, at least
10 days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to each holder of a Right Certificate, in accordance
with Section 25 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.
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 Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage-prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
33
ReliaStar Financial Corp.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage-prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Norwest Bank Minnesota, National Association
000 Xxxxx Xxxxxxx Xxxxxxxx
P. X. Xxx 000
Xxxxx Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Stock Transfer Manager
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage-prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company or the Rights Agent, as the case may be.
Section 26. Supplements and Amendments. The Company may and the Rights
Agent shall, if so directed by the Company, from time to time supplement or
amend this Agreement without the approval of any holders of Common Shares or
Right Certificates in order (i) to extend the Final Expiration Date, (ii) to
cure any ambiguity, or to correct or supplement any provision contained in this
Agreement which may be defective or inconsistent with any other provisions in
this Agreement, (iii) prior to the Distribution Date, to otherwise change or
supplement any provision in this Agreement in any manner which the Company may
deem necessary or desirable to effectuate the purposes of this Agreement, or
(iv) following the Distribution Date, to otherwise change or supplement any
provision in this Agreement in any manner which the Company may deem necessary
or desirable and which shall not adversely affect the interests of the holders
of Right Certificates (other than Right Certificates evidencing Rights that
shall have become null and void pursuant to Section 11(a)(ii)).
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. Benefits of this Agreement.
(a) Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered holders of the Right
34
Certificates (and, prior to the Distribution Date, the registered holders of
Common Shares) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of Common Shares).
(b) The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors or the Company or
necessary or advisable in the administration of this Agreement, including
without limitation the right and power to interpret this Agreement and to make
all determinations deemed necessary or advisable for the administration of this
Agreement. All such acts, calculations, interpretations and determinations that
are done or made by the Board of Directors in good faith shall be final,
conclusive and binding on the Company, the Rights Agent and the holders of the
Rights and all other parties. Accordingly, the Board of Directors shall not be
liable to the holders of the Rights or any other party for any determination
made, action taken or action omitted to be taken pursuant to the terms of this
Agreement, if such determination, action or omitted action was made or taken or
omitted in good faith.
Section 29. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 30. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 31. 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 32. 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.
35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
RELIASTAR FINANCIAL CORP.
By /s/ Xxxxxxx X. Xxxxx
------------------------------------
Its Senior Vice President, General
---------------------------------
Counsel and Secretary
---------------------------------
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Its Vice President
---------------------------------
36
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER SEPTEMBER 8, 2004 OR SUCH EARLIER DATE AS THE BOARD
OF DIRECTORS ORDERS REDEMPTION OR EXCHANGE OF THE RIGHTS. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.005 PER RIGHT (SUBJECT TO
ADJUSTMENT) AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE
OR WERE ACQUIRED OR BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) MAY BECOME NULL AND VOID.
Right Certificate
RELIASTAR FINANCIAL CORP.
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
Amended and Restated Rights Agreement dated as of February 11, 1999 (the "Rights
Agreement"), between ReliaStar Financial Corp., a Delaware corporation (the
"Company"), and Norwest Bank Minnesota, National Association, a national banking
association (the "Rights Agent"), to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M. (Minneapolis, Minnesota time) on September 8, 2004 at the
office or offices of the Rights Agent designated for such purpose, or of its
successor as Rights Agent, one-twentieth of a fully paid, nonassessable share of
Series A Junior Participating Preferred Stock, without par value (the "Preferred
Shares"), of the Company, at a purchase price of $100 per one-twentieth of a
Preferred Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly completed and
executed. The number of Rights evidenced by this Right Certificate (and the
number of one-twentieths of a Preferred Share which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are,
except for adjustments required pursuant to the Rights Agreement, the number and
Purchase Price as of February 11, 1999, based on the Preferred Shares as
constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of one-twentieths of a Preferred Share which may be purchased upon the exercise
of the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
A-1
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and which
contains a full description of the rights, limitations of rights, obligations,
duties and immunities hereunder of the Rights Agent, the Company and the holders
of the Right Certificates (which limitations of rights include the voiding of
the Rights under certain circumstances specified in the Rights Agreement).
Copies of the Rights Agreement are on file at the principal executive office of
the Company and will be mailed without charge by the Company or the Rights Agent
to the holder of this certificate promptly following receipt by the Company or
the Rights Agent of a written request therefor.
Upon the occurrence of certain events listed in Section 11(a)(ii) of
the Rights Agreement, any Rights evidenced by this Right Certificate that are
beneficially owned by an Acquiring Person or an Associate or Affiliate of such
Acquiring Person (as such terms are defined in the Rights Agreement) or were
beneficially owned by an Acquiring Person or an Associate or Affiliate of such
Acquiring Person after the Acquiring Person becomes an Acquiring Person shall be
null and void from and after the occurrence of an event listed in Section
11(a)(ii) of the Rights Agreement.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one-twentieths of a Preferred Share as the Rights evidenced
by the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may, but are not required to, be redeemed by the Company
at a redemption price of $.005 per Right, subject to adjustment as provided in
the Rights Agreement and (ii) may, but are not required to, be exchanged by the
Company in whole or in part for Common Shares or other shares of capital stock
of the Company. The Board of Directors of the Company and the Company shall not
have any liability to any person as a result of the redemption or exchange of
the Rights pursuant to the provisions of the Rights Agreement.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractional shares which are
integral multiples of one-twentieth of a Preferred Share or, if a Right shall
then be exercisable for a fraction other than one-twentieth of a Preferred
Share, integral multiples of that fraction, which may, at the election of the
Company, be evidenced by depository receipts), if in lieu thereof a cash payment
is made, as provided in the Rights Agreement.
A-2
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the manual or facsimile signature of the proper officer of the
Company.
Dated as of _________________.
RELIASTAR FINANCIAL CORP.
By__________________________
By__________________________
Countersigned:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By_________________________
Authorized Signature
A-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells, assigns and transfers
unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ______________________
-----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States or by an eligible guarantor institution (bank, stockbroker,
savings and loan association or credit union with membership in an approved
signature guarantee medallion program), pursuant to Rule 17Ad-15 promulgated
under the Securities Exchange Act of 1934, as amended.
A-4
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best of
its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
are
or
are not
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
did
or
did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
any time that such Person beneficially owned such Rights, is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
----------------------------------
Signature
NOTICE
The signature of the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-5
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
TO: RELIASTAR FINANCIAL CORP.
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights (or such other securities of the Company or of
any other person which may be issuable upon exercise of the Rights) and requests
that certificates for such shares be issued in the name of:
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 Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
Dated: _____________________
------------------------------------
Signature
A-6
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States or by an eligible guarantor institution (bank, stockbroker,
savings and loan association or credit union with membership in an approved
signature guarantee medallion program), pursuant to Rule 17Ad-15 promulgated
under the Securities Exchange Act of 1934, as amended.
A-7
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best of
its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
are
or
are not
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
did
or
did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
any time that such Person beneficially owned such Rights, is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
-------------------------------------
Signature
NOTICE
The signature of the foregoing Election to Exercise and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
A-8
