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EXHIBIT 4.2
RIGHTS AGREEMENT
This Rights Agreement, dated as of ________ ____, 2001 (the "AGREEMENT"),
between Principal Financial Group, Inc., a Delaware corporation (the
"CORPORATION"), and ___________, a ________ corporation (the "RIGHTS AGENT"),
WITNESSETH:
WHEREAS, the Board of Directors of the Corporation has authorized the
issuance of one Right (as hereinafter defined) (subject to adjustment) with
respect to each share of Common Stock (as hereinafter defined) of the
Corporation issued between ________ ____, 2001 (the "RECORD DATE") (whether
originally issued or delivered from the Corporation's treasury) and the earlier
of the Distribution Date (as hereinafter defined) or the Expiration Date (as
hereinafter defined) and, to the extent provided in Section 22 hereof, with
respect to each such share issued after the Distribution Date and prior to the
Expiration Date, each Right initially representing the right to purchase one
one-thousandth of a share of Series A Junior Participating Preferred Stock,
without par value, of the Corporation having the rights and preferences set
forth in the Certificate of Designation attached hereto as Exhibit A, upon the
terms and subject to the conditions hereinafter set forth (the "RIGHTS");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
10% or more of the shares of Common Stock of the Corporation then outstanding,
but shall not include any Exempt Person. Notwithstanding the foregoing:
(i) no Person shall become an "ACQUIRING PERSON" as the result of an
acquisition of shares of Common Stock by the Corporation which, by reducing
the number of shares of Common Stock outstanding, increases the
proportionate number of shares Beneficially Owned by such Person to 10% or
more of the shares of Common Stock of the Corporation then outstanding,
provided, however, that if a Person shall become the Beneficial Owner of
10% or more of the shares of Common Stock of the Corporation by reason of
share purchases by the Corporation and shall, after such share purchases by
the Corporation, become the Beneficial Owner of any additional shares of
Common Stock of the Corporation (other than from the Corporation pursuant
to a stock dividend or stock split), then such Person shall be deemed to be
an "ACQUIRING PERSON" unless, upon becoming
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the Beneficial Owner of such additional shares of Common Stock of the
Corporation, such Person is not then the Beneficial Owner of 10% or more of
the shares of Common Stock of the Corporation then outstanding;
(ii) if the Board of Directors of the Corporation determines in good
faith that a Person who would otherwise be an "ACQUIRING PERSON" has become
such inadvertently (including, without limitation, because (A) such Person
was unaware that he or it Beneficially Owned a percentage of Common Stock
that would otherwise cause such Person to be an "ACQUIRING PERSON" or (B)
such Person was aware of the extent of his or 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 Corporation, and if such Person as promptly as practicable
has divested or divests himself or itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such Person would no
longer be an "ACQUIRING PERSON," then such Person shall not be deemed to be
or to have become an "ACQUIRING PERSON" for any purposes of this Agreement;
and
(iii) no Person shall become an "ACQUIRING PERSON" by virtue of
beneficial ownership of Common Stock of the Corporation by any Affiliate
and/or Associate of such Person, which Affiliate and/or Associate is deemed
to be an Affiliate and/or Associate of such Person solely by reason of such
Affiliate and/or Associate being a director or officer of the Corporation.
(b) "ACT" shall have the meaning set forth in Section 9(b) hereof.
(c) "ADJUSTMENT SHARES" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "AFFILIATE" and "ASSOCIATE," when used with reference to any Person,
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.
(e) "AGREEMENT" shall have the meaning set forth in the first paragraph
hereof.
(f) A Person shall be deemed the "BENEFICIAL OWNER" of and shall be deemed
to "BENEFICIALLY OWN" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing), or upon the
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exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be deemed
the "BENEFICIAL OWNER" of, or to "BENEFICIALLY OWN," (A) securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for payment or exchange, or (B) securities
issuable upon exercise of Rights at any time prior to the occurrence of a
Section 11(a)(ii) Event or a Section 13 Event, or (C) securities issuable
upon exercise of Rights from and after the occurrence of a Section
11(a)(ii) Event or a Section 13 Event, which Rights were acquired by such
Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof
("ORIGINAL RIGHTS") or pursuant to Section 11(i) hereof in connection with
an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has or shares the right to vote or
dispose of, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a Person
shall not be deemed the "BENEFICIAL OWNER" of, or to "BENEFICIALLY OWN,"
any security if the agreement, arrangement or understanding to vote such
security (A) arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the Exchange Act and the applicable rules and regulations
thereunder and (B) is not also then reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person and with respect to which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (ii) of this paragraph (f)) or disposing of such
securities of the Corporation; provided, however, that nothing in this
paragraph (f) shall cause a person engaged in business as an underwriter of
securities to be the "BENEFICIAL OWNER" of, or to "BENEFICIALLY OWN," any
securities acquired through such person's participation in good faith in a
firm commitment underwriting until the expiration of forty days after the
date of such acquisition.
(g) "BOOK-ENTRY" shall mean an uncertificated book entry for the
Corporation's Common Stock.
(h) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or day
on which the Rights Agent is authorized or obligated by law or executive order
to close.
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(i) "CERTIFICATE OF DESIGNATION" shall mean the Certificate of Designation
of Series A Junior Participating Preferred Stock setting forth the powers,
preferences, rights, qualifications, limitations and restrictions of such series
of preferred stock of the Corporation, a copy of which is attached hereto as
Exhibit A.
(j) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., [ ___ ]
time, on such date; provided, however, that if such date is not a Business Day,
it shall mean 5:00 P.M., [ ___ ] time, on the next succeeding Business Day.
(k) "COMMON STOCK" when used with reference to the Corporation shall mean
the Common Stock, par value $0.01 per share, of the Corporation. "COMMON STOCK"
when used with reference to any Person other than the Corporation which is
organized in corporate form shall mean the capital stock with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person or, if such Person is a
Subsidiary of another Person, the Person which ultimately controls such
first-mentioned Person and which has issued any such outstanding capital stock,
equity securities or equity interests. "COMMON STOCK" when used with reference
to any Person which is not organized in corporate form shall mean units of
beneficial interest which (i) shall represent the right to participate generally
in the profits and losses of such Person (including, without limitation, any
flow-through tax benefits resulting from an ownership interest in such Person)
and which (ii) shall be entitled to exercise the greatest voting power of such
Person or, in the case of a limited partnership, shall have the power to remove
the general partner or partners.
(l) "COMMON STOCK EQUIVALENTS" shall have the meaning set forth in Section
11(a)(iii) hereof.
(m) "CORPORATION" shall have the meaning set forth in the first paragraph
of this Agreement.
(n) "CURRENT MARKET PRICE" shall have the meaning set forth in Section
11(d) hereof.
(o) "CURRENT VALUE" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(p) "DISTRIBUTION DATE" shall have the meaning specified in Section 3(a)
hereof.
(q) "EQUIVALENT PREFERENCE STOCK" shall have the meaning set forth in
Section 11(b) hereof.
(r) "EXCHANGE ACT" shall have the meaning specified in Section 1(d) hereof.
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(s) "EXEMPT PERSON" means the Corporation, any Subsidiary of the
Corporation, any employee benefit plan of the Corporation or any Subsidiary of
the Corporation, or any Person organized, appointed or established by the
Corporation or such Subsidiary as a fiduciary for or pursuant to the terms of
any such employee benefit plan or for the purpose of funding any such plan or
funding other employee benefits for employees of the Corporation or of any
Subsidiary of the Corporation.
(t) "EXPIRATION DATE" shall have the meaning specified in Section 7(a)
hereof.
(u) "FINAL EXPIRATION DATE" shall have the meaning specified in Section
7(a) hereof.
(v) "NASDAQ" shall have the meaning set forth in Section 11(d)(i) hereof.
(w) "ORIGINAL RIGHTS" shall have the meaning specified in Section 1(f)(i)
hereof.
(x) "PERSON" shall mean any individual, firm, corporation, partnership,
trust or other entity and shall include any successor (by merger or otherwise)
of such entity.
(y) "PREFERRED STOCK" shall mean shares of Series A Junior Participating
Preferred Stock, par value $1.00 per share, of the Corporation, having the
rights, preferences and limitations set forth in the Certificate of Designation,
and, to the extent there are not a sufficient number of shares of Series A
Junior Participating Preferred Stock authorized to permit the full exercise of
the then outstanding Rights, any other series of preferred stock of the
Corporation designated for such purpose by the Board of Directors of the
Corporation containing terms substantially similar to the terms of the Series A
Junior Participating Preferred Stock.
(z) "PRINCIPAL PARTY" shall have the meaning set forth in Section 13(b)
hereof.
(aa) "PURCHASE PRICE" shall have the meaning set forth in Section 4 hereof.
(bb) "RECORD DATE" shall have the meaning set forth in the WHEREAS clause
at the beginning of this Agreement.
(cc) "REDEMPTION PRICE" shall have the meaning set forth in Section 23(a)
hereof.
(dd) "RIGHT CERTIFICATE" shall have the meaning set forth in Section 3(a)
hereof.
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(ee) "RIGHTS" shall have the meaning set forth in the WHEREAS clause at the
beginning of this Agreement.
(ff) "RIGHTS AGENT" shall have the meaning set forth in the first paragraph
of this Agreement.
(gg) "SECTION 11(a)(ii) EVENT" shall have the meaning set forth in Section
11(a)(ii) hereof.
(hh) "SECTION 13 EVENT" shall have the meaning set forth in Section 13(a)
hereof.
(ii) "SPREAD" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(jj) "STOCK ACQUISITION TIME" shall mean the time of occurrence of
whichever of the following first occurs: (i) the first 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 Corporation
or an Acquiring Person that an Acquiring Person has become such or (ii) the
communication to the Corporation (including, without limitation, to the
directors of the Corporation) of any notice (including, without limitation, any
written consent or notice related thereto) from the Acquiring Person indicating
or reflecting that the Acquiring Person has become such.
(kk) "SUBSIDIARY" shall mean, with respect to any Person, any corporation
or other entity of which securities or other ownership interests having ordinary
voting power sufficient, in the absence of contingencies, to elect a majority of
the board of directors or other persons performing similar functions are at the
time beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
(ll) "SUBSTITUTION PERIOD" shall have the meaning set forth in Section
11(a)(iii) hereof.
(mm) "TRADING DAY" shall have the meaning set forth in Section 11(d)(i)
hereof.
(nn) "VOTING STOCK" shall mean (i) the shares of Common Stock of the
Corporation and (ii) any other shares of capital stock of the Corporation
entitled to vote generally in the election of directors or entitled to vote
together with the shares of Common Stock in respect of any merger,
consolidation, sale of all or substantially all of the Corporation's assets,
liquidation, dissolution or winding up.
Section 2. Appointment of Rights Agent. The Corporation hereby appoints the
Rights Agent to act as agent for the Corporation and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Stock of the Corporation) in accordance with
the terms and conditions
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hereof, and the Rights Agent hereby accepts such appointment. The Corporation
may from time to time act as co-Rights Agent or appoint such co-Rights Agents as
it may deem necessary or desirable, upon 10 days' prior written notice to the
Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no
event be liable for, the acts or omissions of any such co-Rights Agent. Any
actions which may be taken by the Rights Agent pursuant to the terms of this
Agreement may be taken by any such co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the earlier of the Close of Business on (i) the tenth day after
the date on which the Stock Acquisition Time occurs, or (ii) the tenth Business
Day (or such specified or unspecified later date on or after the Record Date as
may be determined by action of the Board of Directors of the Corporation prior
to such time as any Person becomes an Acquiring Person) after the commencement
by any Person (other than an Exempt Person) of, or the first public announcement
of the intention of any Person (other than an Exempt Person) to commence, a
tender or exchange offer for an amount of Common Stock of the Corporation which,
together with the shares of such stock already owned by such Person, constitutes
10% or more of the outstanding Common Stock of the Corporation (including any
such date which is after the date of this Agreement and prior to the issuance of
the Rights) (the earlier of (i) and (ii) being herein referred to as the
"DISTRIBUTION DATE"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the Book-Entries, or
certificates, for shares of Common Stock of the Corporation registered in the
names of the holders of Common Stock of the Corporation (which Book-Entries, or
certificates, for Common Stock of the Corporation shall be deemed also to be
certificates for Rights) and not by separate Book Entries, or Right
Certificates, and (y) the Rights will be transferable only in connection with
the transfer of the underlying Common Stock. As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class, insured,
postage-prepaid mail, to each record holder of Common Stock of the Corporation
as of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Corporation, a Right Certificate, in
substantially the form of Exhibit B hereto (a "RIGHT CERTIFICATE"), evidencing
one Right for each share of Common Stock of the Corporation so held, subject to
adjustment and to the provisions of Section 14(a) hereof. As of the Close of
Business on the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) On the Record Date or as soon as practicable thereafter, the
Corporation will send a copy of a Summary of Rights to Purchase Preferred Stock,
in substantially the form attached hereto as Exhibit C, by first-class,
postage-prepaid mail, to each record holder of its Common Stock as of the Close
of Business on the Record Date, at the address of such holder shown on the
records of the Corporation. With respect to Book-Entries or certificates for
Common Stock of the Corporation outstanding as of the Record
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Date, until the earlier of the Distribution Date or the Expiration Date, the
Rights will be evidenced by such Book-Entries or certificates for Common Stock
together with the Summary of Rights. Until the earlier of the Distribution Date
or the Expiration Date, the transfer of any Common Stock represented by a
Book-Entry or the surrender for transfer of any certificate for Common Stock of
the Corporation outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the transfer of the Rights associated
with the Common Stock represented by such Book-Entry or certificate.
(c) Certificates issued by the Corporation for Common Stock (whether upon
transfer of outstanding Common Stock, original issuance or disposition from the
Corporation's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date shall also be deemed to be certificates
for the Rights and shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between the Corporation and
____________, as it may be amended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal executive offices of the
Corporation. 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 Corporation will mail to
the holder of this certificate a copy of the Rights Agreement (as in effect
on the date of mailing) without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights beneficially owned by an Acquiring Person, or any
Associate or Affiliate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock of the Corporation represented by such
certificates shall be evidenced by such certificates alone and registered
holders of Common Stock of the Corporation shall also be the registered holders
of the associated Rights, and the surrender for transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock of the Corporation represented by such certificates.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase, certification and assignment to be printed on the
reverse thereof) shall each be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Corporation may deem
appropriate and as are not inconsistent with
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the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Sections 11
and 22 hereof, the Right Certificates, whenever distributed, shall be dated as
of the Record Date and on their face shall entitle the holders thereof to
purchase such number of one one-thousandths of a share of Preferred Stock as
shall be set forth therein at the price per one one-thousandths of a share of
Preferred Stock set forth therein (the "PURCHASE PRICE"), but the amount and
type of securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided in this Agreement.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Corporation
manually or by facsimile by the Chief Financial Officer, the Treasurer, the
Chief Executive Officer, the President or the Senior Vice President and General
Counsel and also by the Chief Financial Officer, the Treasurer, the Secretary or
any Assistant Secretary. The Right Certificates shall be countersigned by the
Rights Agent manually and shall not be valid for any purpose unless so
countersigned. In case any officer of the Corporation who shall have signed any
of the Right Certificates shall cease to be such officer of the Corporation
before countersignature by the Rights Agent and issuance and delivery by the
Corporation, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent, and issued and delivered by the Corporation with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Corporation; and any Right Certificate may be
signed on behalf of the Corporation by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the
Corporation to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office in [City], [State], books in any form or medium
(including electronic media) 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
by each of the Right Certificates on its face and the date and certificate
number of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e) 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 Expiration Date, any Right Certificate or Right
Certificates may be transferred, split
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up, combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of shares of Preferred
Stock (or other securities, cash or assets, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent in [City], [State]. Neither the Rights Agent nor the Corporation
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Right Certificate or Right Certificates until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate or Right
Certificates and shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Corporation shall reasonably request. Thereupon the Rights Agent
shall, subject to Sections 7(e) 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 Corporation may require payment from the holders of
Right Certificates of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of such Right Certificates.
(b) Upon receipt by the Corporation and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a valid Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to the
Corporation and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Right Certificate
if mutilated, the Corporation will execute and deliver a new Right Certificate
of like tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Sections 9(c), 11(a)(iii) and 23(a) hereof) in whole
or in part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase and certificate on the
reverse side thereof duly executed, to the Rights Agent at the principal office
of the Rights Agent in [City], [State], together with payment of the Purchase
Price for each one one-thousandth of a share of Preferred Stock as to which the
Rights are exercised, at or prior to the earliest of (i) the Close of Business
on _________ ____, 2011
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[10 years after Record Date] (the "FINAL EXPIRATION DATE"), (ii) the time at
which the Rights are redeemed as provided in Section 23 or (iii) the time at
which the Rights are exchanged as provided in Section 24 (the earliest of (i),
(ii) and (iii) being herein referred to as the "EXPIRATION DATE").
(b) The Purchase Price for each one one-thousandth of a share of Preferred
Stock issued pursuant to the exercise of a Right shall initially be $_________,
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) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and certificate duly executed, accompanied by payment (in cash, or by
certified bank check or money order payable to the order of the Corporation) of
the Purchase Price for the Preferred Stock (or other shares, securities, cash or
other assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of the Rights pursuant
hereto in cash, or by certified bank check or money order payable to the order
of the Corporation, the Rights Agent shall, subject to Section 20(k) hereof, (i)
(A) promptly requisition from any transfer agent of the Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the number of shares of Preferred Stock to be purchased (and
the Corporation hereby irrevocably authorizes its transfer agent to comply with
all such requests), or (B) if the Corporation shall have elected to deposit the
total number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing interests in such number of one one-thousandths
of a share of Preferred Stock as are to be purchased (in which case certificates
for the shares of Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Corporation
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Corporation the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) 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 in
lieu of 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, 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, subject to the provisions of Section 14 hereof.
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(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or any Affiliate or Associate of an Acquiring
Person, (ii) a transferee of any such Acquiring Person (or of any such Affiliate
or Associate) who becomes a transferee after such Acquiring Person becomes such
or (iii) a transferee of any such Acquiring Person (or of any such Affiliate or
Associate) who becomes a transferee prior to or concurrently with such Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from such Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Corporation has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further action, and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The
Corporation shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) are complied with, but shall have no liability to any holder
of Right Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any of its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Corporation shall be obligated to undertake any action with
respect to a registered holder of any Right Certificate upon the occurrence of
any purported transfer or exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate following
the form of assignment or election to purchase set forth on the reverse side of
the Right Certificate surrendered for such assignment or exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Corporation
shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Corporation or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Corporation shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Corporation otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Right Certificates to the Corporation, or shall, at the
written request of the Corporation, destroy such canceled Right Certificates and
in such case shall deliver a certificate of destruction thereof to the
Corporation.
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Section 9. Reservation and Availability of Capital Stock.
(a) The Corporation covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Section 11(a)(ii) Event or a Section 13
Event, out of its authorized and unissued shares of Common Stock or other
securities or out of its authorized and issued shares held in its treasury), the
number of shares of Preferred Stock (and, following the occurrence of a Section
11(a)(ii) Event or a Section 13 Event, Common Stock of the Corporation or other
securities) that, as provided in this Agreement, will be sufficient to permit
the exercise in full of all outstanding Rights.
(b) So long as the Preferred Stock (and, following the occurrence of a
Section 11(a)(ii) Event or a Section 13 Event, Common Stock of the Corporation
or other securities) issuable upon the exercise of Rights may be listed on any
national securities exchange, the Corporation shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Corporation shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event or a Section 13 Event in which the consideration to be delivered
by the Corporation upon exercise of the Rights has been determined in accordance
with this Agreement, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Securities Act of
1933, as amended (the "ACT"), with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing and (iii)
cause such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the earlier of (A) the date as
of which the Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Corporation 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 Corporation may, acting by resolution of its Board of Directors, temporarily
suspend, for a period of time not to exceed 90 days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Corporation 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 qualifications in such jurisdiction shall not have been obtained.
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(d) The Corporation covenants and agrees that it will take all such action
as may be necessary to ensure that all one one-thousandths of a share of
Preferred Stock (and, following the occurrence of a Section 11(a)(ii) Event or a
Section 13 Event, Common Stock of the Corporation or other securities) delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Corporation further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any shares of Preferred Stock (or shares of Common Stock of the Corporation
or other securities, as the case may be) upon the exercise of Rights. The
Corporation shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a Person
other than, or the issuance or delivery of certificates or depositary receipts
for shares of Preferred Stock (or shares of Common Stock of the Corporation or
other securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or deliver any certificates for shares of Preferred Stock
(or Common Stock of the Corporation or other securities, as the case may be) or
depositary receipts for Preferred Stock upon the exercise of any Rights until
any such tax shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it has been
established to the Corporation's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-thousandths of a share of Preferred Stock
(or shares of Common Stock of the Corporation or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of shares of Preferred Stock (or shares of
Common Stock of the Corporation or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Corporation's transfer books for the Preferred Stock (or Common Stock or other
securities, as the case may be) are closed, such Person shall be deemed to have
become the record holder of such shares (fractional and otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Corporation's transfer books for the Preferred Stock (or Common Stock or other
securities, as the case may be) 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 stockholder of the Corporation with respect to shares for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any
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preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Corporation, 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, or
fractions thereof, 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 Corporation shall at any time after the date of
this Agreement (A) declare or pay a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock into a
greater number of shares, (C) combine or consolidate the outstanding Preferred
Stock into a smaller number of shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation), except as otherwise
provided in Section 7(e) and 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 Preferred Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of Preferred Stock or
capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Stock or capital
stock, as the case may be, transfer books of the Corporation were open, he would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs which
would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) In the event (a "SECTION 11(a)(ii) EVENT") that any Person, alone or
together with its Affiliates and Associates, shall become an Acquiring Person,
then each holder of a Right, except as provided below and in Section 7(e)
hereof, shall thereafter have the right to receive, upon exercise thereof at the
then current Purchase Price in accordance with the terms of this Agreement, in
lieu of a number of one one-thousandths of a share of Preferred Stock, such
number of shares of Common Stock of the Corporation as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of such Section 11(a)(ii) Event,
whether or not such Right was then exercisable, and (y) dividing that product
(which, following such first occurrence, shall thereafter be adjusted as
appropriate in accordance with Section 11(f) hereof and, as so adjusted, shall
be referred to as the "PURCHASE PRICE" for each Right and for all purposes of
this Agreement) by
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50% of the Current Market Price per share of the Common Stock of the Corporation
on the date of such first occurrence (such number of shares being hereinafter
referred to as the "ADJUSTMENT SHARES"). The Corporation shall notify the Rights
Agent as to any Persons who are deemed by the Corporation to be Acquiring
Persons or Associates, Affiliates or transferees (as described in subparagraphs
(ii) and (iii) of Section 7(e) hereof) of such Persons and shall identify any
Rights pertaining thereto.
(iii) In lieu of issuing shares of Common Stock of the Corporation in
accordance with Section 11(a)(ii) hereof, the Corporation, acting by resolution
of its Board of Directors, may, and, in the event that the number of shares of
Common Stock which are authorized by the Corporation's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights are not sufficient to permit exercise in full
of the Rights in accordance with Section 11(a)(ii) hereof, the Corporation,
acting by resolution of its Board of Directors, shall (A) determine the excess
of (1) the value of the Adjustment Shares issuable upon the exercise of a Right
(the "CURRENT VALUE"), over (2) the Purchase Price attributable to each Right
(such excess, the "SPREAD") and (B) with respect to each Right (subject to
Section 7(e) hereof), make adequate provision to substitute for all or any part
of the Adjustment Shares, upon payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) Preferred Stock or other equity
securities of the Corporation (including, without limitation, shares, or units
of shares, of preferred stock which the Board of Directors of the Corporation
has deemed to have the same value as shares of Common Stock of the Corporation
(such Preferred Stock or shares or units of preferred stock hereinafter called
"COMMON STOCK EQUIVALENTS")), (4) debt securities of the Corporation, (5) other
assets or (6) any combination of the foregoing, which, when combined with the
Adjustment Shares (if any) to be issued, has an aggregate value equal to the
Current Value, where such aggregate value has been determined by action of the
Board of Directors of the Corporation based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of the
Corporation; provided, however, if the Corporation shall not have made adequate
provision to deliver value pursuant to clause (B) above within 30 days following
the first occurrence of a Section 11(a)(ii) Event, then the Corporation shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock of the
Corporation (to the extent available) and then, if necessary, cash, which shares
or cash have an aggregate value equal to the Spread. If, after the occurrence of
a Section 11(a)(ii) Event, the number of shares of Common Stock that are
authorized by the Corporation's certificate of incorporation but not outstanding
or reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit exercise in full of the Rights in accordance with
Section 11(a)(ii) hereof and the Corporation, acting by resolution of its Board
of Directors, shall determine in good faith that it is likely that sufficient
additional shares of its Common Stock could be authorized for issuance upon
exercise in full of the Rights, the 30 day period set forth above may be
extended to the extent necessary, but not more than 90 days after the
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occurrence of such Section 11(a)(ii) Event, in order that the Corporation may
seek stockholder approval for the authorization of such additional shares (such
period as it may be extended, the "SUBSTITUTION PERIOD"). To the extent that the
Corporation determines that some action is to be taken pursuant to the terms of
this Section 11(a)(iii), the Corporation (x) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all outstanding Rights
and (y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek such stockholder approval for the
authorization of additional shares or to decide the appropriate form of
distribution to be made pursuant to the first sentence of this Section
11(a)(iii) and to determine the value thereof. In the event of any such
suspension, the Corporation shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock of the Corporation
shall be the Current Market Price per share of the Common Stock of the
Corporation on the date of the first occurrence of the Section 11(a)(ii) Event,
and the per share or per unit value of any Common Stock Equivalents shall be
deemed to equal the Current Market Price per share of the Common Stock of the
Corporation on such date.
(b) In the event that the Corporation shall fix a record date for the
issuance of rights, options or warrants to all holders of shares of Preferred
Stock entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Stock (or shares having the
same rights, privileges and preferences as the shares of Preferred Stock
("EQUIVALENT PREFERENCE STOCK")) or securities convertible into shares of
Preferred Stock or Equivalent Preference Stock at a price per share of Preferred
Stock or Equivalent Preference Stock (or having a conversion price per share, if
a security convertible into shares of Preferred Stock or Equivalent Preference
Stock) less than the Current Market Price per share of the Preferred Stock (as
defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date plus the number of additional shares of Preferred Stock
and/or Equivalent Preference Stock which the aggregate offering price of the
total number of 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 shares
of Preferred Stock outstanding on such record date plus the number of additional
shares of Preferred Stock or Equivalent Preference Stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
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 Corporation, whose determination shall be described in a
statement filed with the Rights Agent. Such adjustment shall be made
successively
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whenever such a record date is fixed; and in the event that such rights, options
or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Corporation shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Corporation is
the continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular periodic cash dividend or a dividend payable in Preferred
Stock, but including any dividend payable in stock other than Preferred Stock)
or subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Market
Price per share of Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Corporation,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one share
of Preferred Stock, and the denominator of which shall be such Current Market
Price per share of Preferred Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "CURRENT MARKET
PRICE" per share of Common Stock of the Corporation on any date shall be deemed
to be the average of the daily closing prices per share of such Common Stock of
the Corporation for the 30 consecutive Trading Days immediately prior to such
date; provided, however, that in the event that the Current Market Price per
share of Common Stock of the Corporation is determined during a period following
the announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into such Common Stock (other than the Rights) or (B) any
subdivision, combination or reclassification of such Common Stock, and prior to
the expiration of the 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, as the case may be, then, and in each such case, the
Current Market Price shall be appropriately adjusted to take into account the
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock of the Corporation are not listed or admitted to
trading on the New York Stock Exchange, as reported in the
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principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares of
Common Stock of the Corporation are listed or admitted to trading or, if the
shares of Common Stock of the Corporation are not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or such other system then in use, or, if on any such
date the shares of Common Stock of the Corporation are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in shares of Common Stock of the
Corporation selected by the Corporation, acting by resolution of the Board of
Directors of the Corporation, or, if on any such date no market maker is making
a market in shares of Common Stock of the Corporation, the fair value of such
shares on such date as determined in good faith by the Corporation, acting by
resolution of the Board of Directors of the Corporation (which determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes). The term "TRADING DAY" shall mean a day on which
the principal national securities exchange on which the shares of Common Stock
of the Corporation are listed or admitted to trading is open for the transaction
of business or, if the shares of Common Stock of the Corporation are not listed
or admitted to trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "CURRENT MARKET
PRICE" per share of Preferred Stock shall be determined in the same manner as
set forth for the Common Stock of the Corporation in Section 11(d)(i) hereof
(other than the last clause of the second sentence thereof). If the Current
Market Price per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in Section 11(d)(i) hereof, the Current Market
Price per share of Preferred Stock shall be conclusively deemed to be an amount
equal to 1000 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the Common
Stock of the Corporation occurring after the date of this Agreement) multiplied
by the Current Market Price per share of the Common Stock of the Corporation. If
neither the Common Stock of the Corporation nor the Preferred Stock is publicly
held or so listed or traded, the Current Market Price per share of Preferred
Stock shall mean the fair value per share as determined in good faith by the
Corporation, acting by resolution of its Board of Directors, whose determination
shall be described in a statement filed with Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the Current
Market Price of one one-thousandth of a share of Preferred Stock shall be equal
to the Current Market Price of one share of Preferred Stock divided by 1000.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however, that any
adjustments which by
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reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a share of Common Stock or other share or the nearest
one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from the
date of the transaction which mandates such adjustment or (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Corporation other than
Preferred Stock, thereafter the Purchase Price and the number of such other
shares so receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Stock contained in Sections
11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock
shall apply on like terms to any such other shares; provided, however, that the
Corporation shall not be liable for its inability to reserve and keep available
for issuance upon exercise of the Rights pursuant to Section 11(a)(ii) a number
of shares of its Common Stock greater than the number then authorized by the
Certificate of Incorporation of the Corporation but not outstanding or reserved
for any other purpose.
(g) All Rights originally issued by the Corporation subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Corporation 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 one-thousandths of
a share of Preferred Stock (calculated to the nearest one-millionth of a share
of Preferred Stock) obtained by (i) multiplying (A) the number of one
one-thousandths of a share covered by a Right immediately prior to such
adjustment of the Purchase Price by (B) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Corporation 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 one one-thousandths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number
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of Rights shall be exercisable for the number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
one-hundred-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Corporation shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 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
Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Corporation, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Corporation, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Corporation, 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 shares of Preferred Stock, or fraction thereof, issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per one one-thousandth 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 the then par value, if any, of the one one-thousandth of a
share of Preferred Stock issuable upon exercise of the Rights, the Corporation
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally issue fully paid
and nonassessable shares of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Corporation may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date the
Preferred Stock, or a fraction thereof,
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and other capital stock or securities of the Corporation, if any, issuable upon
such exercise over and above the Preferred Stock and other capital stock or
securities of the Corporation, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided, however,
that the Corporation shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Corporation, acting by resolution of its Board of Directors 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 it in its sole
discretion shall determine to be advisable in order that any consolidation or
subdivision of the Preferred Stock, issuance wholly for cash of any Preferred
Stock at less than the Current Market Price, issuance wholly for cash of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for Preferred Stock, stock dividends or issuance of rights, options
or warrants referred to hereinabove in this Section 11, hereafter made by the
Corporation to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) The Corporation covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Corporation in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Corporation in a transaction which complies with Section 11(o) hereof) or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets, cash flow or earning
power aggregating more than 50% of the assets, cash flow or earning power of the
Corporation and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Corporation or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof) if (x) at the
time of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the "PRINCIPAL PARTY" for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(o) The Corporation covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23, Section 24 or Section 27 hereof,
take (or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or eliminate the benefits intended to be afforded by the Rights.
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(p) Anything in this Agreement to the contrary notwithstanding, in the
event the Corporation shall at any time after the date of this Agreement and
prior to the Distribution Date (i) declare or pay any dividend on its Common
Stock payable in Common Stock of the Corporation or (ii) subdivide its
outstanding Common Stock into a greater number of shares (by reclassification or
otherwise than by payment of dividends in Common Stock) or (iii) combine or
consolidate its outstanding Common Stock into a smaller number of shares, then
in any such case, (x) the number of one one-thousandths of a share of Preferred
Stock purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-thousandths of a share of
Preferred Stock so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of shares of Common Stock of the
Corporation outstanding immediately before such event and the denominator of
which is the number of shares of such Common Stock outstanding immediately after
such event and (y) action shall be taken such that each share of Common Stock of
the Corporation outstanding immediately after such event shall have issued with
respect to it that number of Rights which each share of Common Stock of the
Corporation outstanding immediately prior to such event had issued with respect
to it. The adjustments provided for in this Section 11(p) 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(p), the adjustments
provided for in this Section 11(p) shall be in addition and prior to any
adjustment required pursuant to Section 11(a)(ii).
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13, the
Corporation 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 its
Common Stock and Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate (or if prior to the
Distribution Date, to each holder of a certificate representing shares of its
Common Stock) in accordance with Section 26 of this Agreement. Notwithstanding
the foregoing sentence, the failure of the Corporation to make such certificates
or give such notice shall not affect the validity or the force or effect of the
requirement for such adjustment. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained. Any
adjustment to be made pursuant to Sections 11 and 13 shall be effective as of
the date of the event giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow
or Earning Power.
(a) In the event (a "SECTION 13 EVENT") that, following the Stock
Acquisition Time, directly or indirectly, (x) the Corporation shall consolidate
or otherwise combine
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with or merge with or into, any other Person (other than a wholly owned
Subsidiary of the Corporation in a transaction which complies with Section 11(o)
hereof) and the Corporation shall not be the surviving or continuing corporation
of such consolidation, combination or merger, (y) any Person (other than a
wholly owned Subsidiary of the Corporation in a transaction which complies with
Section 11(o) hereof) shall consolidate or otherwise combine with or merge with
or into the Corporation and the Corporation shall be the surviving or continuing
corporation of such consolidation, combination or merger and, in connection
therewith, all or part of the Common Stock of the Corporation shall be changed
into or exchanged for stock or other securities of the Corporation or any other
Person or cash or any other property or (z) the Corporation shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets, cash flow or earning power
aggregating more than 50% of the assets, cash flow or earning power of the
Corporation and its Subsidiaries (taken as a whole and calculated on the basis
of the Corporation's most recent regularly prepared financial statement) to any
other Person or Persons (other than the Corporation or any wholly owned
Subsidiary of the Corporation in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case (except as provided in
Section 13(d) hereof), proper provision shall be made so that (i) each holder of
a Right (except as provided in Section 7(e) hereof) shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradable shares of
Common Stock of the Principal Party (as hereinafter defined), not subject to any
liens, encumbrances, rights of call, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by dividing the then current
Purchase Price by 50% of the Current Market Price per share of Common Stock of
such Principal Party on the date of consummation of such merger, consolidation,
sale or transfer (provided that the Purchase Price and the number of shares of
Common Stock of such Principal Party so receivable upon exercise of a Right
shall, from and after such Section 13 Event, be subject to further adjustment in
accordance with Section 11(f) hereof to reflect any events occurring in respect
of the Common Stock of such Principal Party after the occurrence of such Section
13 Event); (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Corporation pursuant to this Agreement; (iii) the term "CORPORATION" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock in accordance
with Section 9 hereof) in connection with such consummation as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be possible, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any Section 13 Event.
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(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of any securities into which shares of Common Stock of the
Corporation are converted in such merger or consolidation, or (B) if no
securities are so issued, (x) the Person that is the other party to such
merger, if such Person survives such merger, or (y) if the Person that is
the other party to the merger does not survive the merger, the Person that
does survive the merger (including the Corporation if it survives) or (z)
the Person resulting from the consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets, cash flow or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12 month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, "PRINCIPAL PARTY" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "PRINCIPAL PARTY" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Corporation shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Corporation and such issuer shall have executed and delivered
to the Rights Agent a supplemental agreement containing the provisions set forth
in paragraphs (a) and (b) of this Section 13 and further providing that, as soon
as practicable after the date of any such 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 will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date; and
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(ii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter, subject to
Section 7(e) hereof, become exercisable in the manner described in Section 13(a)
hereof.
(d) The Corporation covenants and agrees that it will not, after the
occurrence of a Section 11(a)(ii) Event, engage in any Section 13 Event if at
the time of or after such event there are any charter or by-law provisions or
any rights, warrants or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits intended to be afforded
by the Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractions of 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 of the Rights for any day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use, or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
(selected by the Corporation, acting by resolution of its Board of Directors).
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
Corporation, acting by resolution of its Board of Directors shall be used.
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(b) The Corporation shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred
Stock). Fractions of Preferred Stock in integral multiples of one one-thousandth
of a share of Preferred Stock may, at the election of the Corporation, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Corporation and a depositary selected by it, provided that such agreement
shall provide that the holders of depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Stock. In lieu of fractional shares which are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Corporation
shall pay to the registered holders of Right Certificates at the time such Right
Certificates are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one share of Preferred Stock. For
purposes of this Section 14(b), the current market value of a share of Preferred
Stock shall be the closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to
the date of such exercise.
(b) Following the occurrence of a Section 11(a)(ii) Event or a Section 13
Event, the Corporation shall not be required to issue fractions of shares of its
Common Stock upon exercise of the Rights or to distribute certificates or
Book-Entries which evidence fractional shares of its Common Stock. In lieu of
fractional shares of its Common Stock, the Corporation may pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one share of its Common Stock. For purposes of this Section 14(c), the
current market value of one share of Common Stock of the Corporation shall be
the closing price of one share of Common Stock of the Corporation (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Stock of the Corporation); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of Common Stock of the
Corporation), without the consent of the Rights Agent or of any holder of any
other Right Certificate (or, prior to the Distribution Date, of Common Stock of
the Corporation) may, in his own behalf and for his own benefit, enforce, and
may institute
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and maintain any suit, action or proceeding against the Corporation to enforce,
or otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations hereunder 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 such Right consents and agrees with the Corporation and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Close of Business on the earlier of the Distribution Date
or the Expiration Date, the Rights shall be evidenced by the Book-Entries or
certificates for shares of Common Stock of the Corporation registered in the
name of the holders of such shares (which Book-Entries or certificates for
shares of Common Stock of the Corporation shall also constitute certificates for
Rights) and each Right will be transferable only in connection with the transfer
of Common Stock of the Corporation;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer;
(c) the Corporation and the Rights Agent may deem and treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock Book-Entry or certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificate or the associated Common Stock
certificate made by anyone other than the Corporation or the Rights Agent) for
all purposes whatsoever, and neither the Corporation nor the Rights Agent shall
be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Corporation nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Corporation must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
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Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right or Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-thousandths of a share of Preferred Stock or any other securities of the
Corporation 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 or Right
Certificate, as such, any of the rights of a stockholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24), 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 Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Corporation also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(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 Preferred Stock or Common Stock of the Corporation or for other
securities of the Corporation, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged by the
proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the
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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. The purchase
of all or substantially all of the Rights Agent's assets employed in the
performance of transfer agent activities shall be deemed a merger or
consolidation for purposes of this Section 19. 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 Corporation and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it (which
may be legal counsel for the Corporation), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(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 an Acquiring Person and the
determination of the Current Market Price per share of Preferred Stock and
Common Stock) be proved or established by the Corporation prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President (if any) or the Senior
Vice President and General Counsel and by the Treasurer or the Secretary of the
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Corporation and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Corporation 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 Corporation of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 13 or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it be
responsible for any determination by the Board of Directors of the Corporation
of the Current Market Price of the Preferred Stock or Common Stock of the
Corporation; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock of the Corporation or Preferred Stock or other securities to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of Preferred Stock or Common Stock of the Corporation or other securities
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Corporation agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, the President (if any), the
Senior Vice President and General Counsel, the Secretary or the Treasurer of the
Corporation, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any
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action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Corporation or become pecuniarily interested in any transaction in which
the Corporation may be interested, or contract with or lend money to the
Corporation or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Corporation or for any other legal entity.
(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, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Corporation or to holders of the
Rights resulting from any such act, omission, 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 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 for it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Corporation.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Corporation and to each transfer
agent of the Common Stock of the Corporation and Preferred Stock by registered
or certified mail, and to the holders of the Right Certificates by first-class
mail. The Corporation may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock of the
Corporation and Preferred Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the
Corporation shall appoint a successor to the Rights Agent. If the Corporation
shall
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fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Corporation), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Corporation or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State of _______ (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 _______), in good
standing, having a principal office in the State of ________, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Corporation shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of its Common Stock and Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Corporation
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by resolution of its Board of Directors, to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares of stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of its Common Stock
following the Distribution Date (other than upon exercise of a Right) and prior
to the Expiration Date, the Corporation (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Corporation, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Corporation, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if and to the extent
that the Corporation shall be advised by counsel that such issuance would create
a significant risk of material adverse tax consequences to the Corporation or
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the Person to whom such Right Certificate would be issued and (ii) no such Right
Certificate shall be issued if and to the extent that appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Corporation may, by resolution of its Board of Directors, at its
option, at any time prior to the earlier of (x) the Stock Acquisition Time 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 $.001 per Right
(payable in cash, shares of Common Stock (based on the Current Market Price of
the Common Stock at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors of the Corporation), appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "REDEMPTION PRICE").
(b) Immediately upon the action of the Board of Directors of the
Corporation ordering the redemption of the Rights (or at such time subsequent to
such action as the Board of Directors may determine), 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. Within 10 days after the action of the Board of Directors
ordering the redemption of the Rights, the Corporation shall give notice of such
redemption to 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 Stock of the Corporation. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made. Neither
the Corporation nor any of its Affiliates or Associates may redeem, acquire or
purchase any Rights at any time in any manner other than that specifically set
forth in this Section 23 or Section 24 hereof and other than in connection with
the repurchase of Common Stock of the Corporation prior to the Distribution
Date.
Section 24. Exchange.
(a) The Board of Directors of the Corporation may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for shares
of Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "EXCHANGE RATIO"). Notwithstanding
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the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Corporation ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Corporation shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Corporation promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock for Rights
will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Corporation, at its
option, may substitute shares of Preferred Stock (or any other series of
preferred stock of the Corporation containing terms substantially similar to the
terms of the Preferred Stock) for some or all of the shares of Common Stock
exchangeable for Rights, at the initial rate of one one-thousandth of a share of
Preferred Stock (or of such other series of preferred stock of the Corporation)
for each share of Common Stock, as appropriately adjusted to reflect adjustments
in the voting rights of the Preferred Stock pursuant to the terms thereof, so
that the fraction of a share of Preferred Stock (or of such other series of
preferred stock of the Corporation) delivered in lieu of each share of Common
Stock shall have the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of Common Stock
or Preferred Stock (or any other series of preferred stock of the Corporation
containing terms substantially similar to the terms of the Preferred Stock)
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Corporation shall
take all such action as may be necessary to authorize additional shares of
Common Stock or Preferred Stock (or such other series of preferred stock of the
Corporation) for issuance upon exchange of the Rights.
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(e) The Corporation shall not be required to issue fractions of shares of
Common Stock or to distribute Book-Entries or certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares, the
Corporation shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of Section 11(d) hereof)
for the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Corporation shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Time propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular periodic dividend out of earnings or retained earnings of the
Corporation), or (ii) to offer to the holders of Preferred Stock options, rights
or warrants to subscribe for or to purchase any additional Preferred Stock or
shares of stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of the Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (iv) to effect any merger, consolidation or other
combination into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets, cash flow or earning power of
the Corporation and its Subsidiaries (taken as a whole) to, any other Person, or
(v) to effect the liquidation, dissolution or winding up of the Corporation,
then, in each such case, the Corporation shall give to each holder of a Right,
in accordance with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend or
distribution of rights or warrants, or the date on which such reclassification,
merger, consolidation, combination, sale, transfer, liquidation, dissolution or
winding up is to take place and the date of participation therein by the holders
of Common Stock of the Corporation or Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty days prior to the record date for
determining holders of Preferred Stock for purposes of such action, and in the
case of any such other action, at least twenty days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of Common Stock of the Corporation or Preferred Stock, whichever shall
be the earlier. The failure to give notice required by this Section 25 or any
defect therein shall not affect the legality or validity of the action taken by
the Corporation or the vote upon any such action.
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(b) In case any of the events set forth in Section 11(a)(ii) or Section
13(a) of this Agreement shall occur, then, in any such case, (i) the Corporation
shall as soon as practicable thereafter give to each holder of a Right, to the
extent feasible and in accordance with Section 26, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) or Section 13(a) hereof, and (ii) all
references in Section 25(a) hereof to Preferred Stock shall be deemed thereafter
to refer also to Common Stock or other securities issuable in respect of the
Rights.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Corporation shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Principal Financial Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Corporation or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Corporation) as follows:
[Rights Agent]
[Suite #]
[Address]
[City, State Zip]
Attention: [ ____________ ]
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Right Certificate (or if
prior to the Distribution Date to each holder of a certificate representing
shares of Common Stock of the Corporation) shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed to such Right holder (or
if prior to the Distribution Date to such holder of Common Stock of the
Corporation) at the address of such holder as shown on the registry books of the
Corporation.
Section 27. Supplements and Amendments. Prior to the Stock Acquisition Time
and subject to the penultimate sentence of this Section 27, the Corporation may,
by resolution of its Board of Directors, and the Rights Agent shall, if the
Corporation so
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directs, supplement or amend any provision of this Agreement in any respect
whatsoever (including, without limitation, any extension of the period in which
the Rights may be redeemed) without the approval of any holders of certificates
representing shares of Common Stock of the Corporation. From and after the Stock
Acquisition Time and subject to the penultimate sentence of this Section 27,
without the approval of any holders of certificates representing shares of
Common Stock of the Corporation or of Right Certificates, the Corporation may,
by resolution of its Board of Directors, and the Rights Agent shall, if the
Corporation so directs, supplement or amend this Agreement in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, (iii)
to shorten or lengthen any time period hereunder or (iv) to change or supplement
or make any other provisions in any manner which the Corporation may deem
necessary or desirable, which shall not adversely affect the interests of, or
diminish substantially or eliminate the benefits intended to be afforded by the
Rights to, the holders of Right Certificates (other than an Acquiring Person or
an Affiliate or Associate of any such Person); provided, however, that this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights may be
redeemed or to modify the ability (or inability) of the Board of Directors of
the Corporation to redeem the Rights, in either case at such time as the Rights
are not then redeemable or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of or the
benefits to the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of any such Person). Upon the delivery of a certificate
from an appropriate officer of the Corporation which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the
Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price or the Final Expiration Date.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Corporation or the Rights Agent shall bind and
inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
(a) For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Directors of the
Corporation shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically
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granted to such Board of Directors, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the Corporation or the Corporation in good faith, (x) shall be
final, conclusive and binding on the Corporation, the Rights Agent, the holders
of the Right Certificates and all other parties and (y) shall not subject the
Board of Directors of the Corporation to any liability to the holders of the
Rights and Right Certificates.
(b) Nothing contained in this Agreement shall be deemed to be in derogation
of the obligation of the Board of Directors of the Corporation to exercise its
fiduciary duty. Without limiting the foregoing, nothing contained in this
Agreement shall be construed to suggest or imply that the Board of Directors of
the Corporation shall not be entitled to reject any tender offer, or to take any
other action (including, without limitation, the commencement, prosecution,
defense or settlement of any litigation and the submission of additional or
alternative offers or other proposals) with respect to any tender offer that the
Board of Directors believes is necessary or appropriate in the exercise of such
fiduciary duty.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Corporation, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock of the Corporation) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Corporation, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock of the Corporation).
Section 31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Corporation determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire
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until the Close of Business on the tenth Business Day following the date of such
determination by the Board of Directors.
Section 32. 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 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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SIGNATURE
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: PRINCIPAL FINANCIAL GROUP, INC.
By By
---------------------------- ----------------------------------
Name: Name:
Title: Title:
Attest: [RIGHTS AGENT]
By By
---------------------------- ----------------------------------
Name: Name:
Title: Title:
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EXHIBIT A
PRINCIPAL FINANCIAL GROUP, INC.
Certificate of Designation,
Preferences and Rights
Pursuant to Section 151
of the General Corporation Law
of the State of Delaware
--------------------
Certificate of Designation,
Preferences and Rights
of
Series A Junior Participating Preferred Stock
I, [officer], being the [title] of Principal Financial Group, Inc., a
corporation organized and existing under the General Corporation Law of Delaware
(the "CORPORATION"), do hereby certify:
FIRST: That, pursuant to authority expressly vested in the Board of
Directors of the Corporation by the provisions of its Certificate of
Incorporation, the Board of Directors on ___________, __________ duly adopted
the following resolution:
RESOLVED that a Series A Junior Participating Preferred Stock, par value
$1.00 per share, be, and it hereby is, created by this Board of Directors,
pursuant to authority expressly vested in it by the provisions of the
Certificate of Incorporation of the Corporation, and that the designation,
relative powers, preferences and rights, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Number of Shares. ___________ shares of the
Preferred Stock of the Corporation shall constitute a series of Preferred Stock
designated as Series A Junior Participating Preferred Stock (hereinafter
referred to as the "SERIES A PREFERRED STOCK"). Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
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Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $0.01
of the Corporation (the "COMMON STOCK") and of any other junior stock which may
be outstanding, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, annual
dividends payable in cash on the fifteenth day of December in each year (each
such date being referred to herein as a "DIVIDEND PAYMENT DATE"), commencing on
the first Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $10.00 per share, or (b) subject to
the provision for adjustment hereinafter set forth, 1000 times the aggregate per
share amount of all cash dividends, and 1000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock since the immediately preceding Dividend Payment Date, or,
with respect to the first Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Dividend Payment Date and the next subsequent Dividend
Payment Date, a dividend of $10.00 per share on the Series A Preferred Stock
shall nevertheless be payable on such subsequent Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
or Series A Preferred Stock from the Dividend Payment Date next preceding the
date of issue of such shares of Series A Preferred Stock, unless the date of
issue of such shares is prior to the record date for the first Dividend Payment
Date, in which case dividends on
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such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Dividend Payment Date. Accrued but unpaid dividends shall
accumulate but shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provisions for adjustment as hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 1000 votes
(and each one one-thousandth of a share of Series A Preferred Stock shall
entitle the holder thereof to one vote) on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation, in any other certificate of designation creating a series of
preferred stock or any similar stock, or by law, the holders of shares of Series
A Preferred Stock and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as provided herein, in Section 10 or by applicable law, holders
of Series A Preferred Stock shall have no special voting rights and their
consent shall not be
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required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for authorizing or taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on any
shares or stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding-up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock
except dividends paid ratably on the Series A Preferred Stock, and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding-up) to the Series A Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding-up)
with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(v) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the
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Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever,
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock, without designation as to series, and may be reissued as part
of a new series of preferred stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein, in the Restated Certificate of Incorporation, in any other
certificate of designation creating a series of preferred stock or any similar
stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding-Up. Upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, no
distribution shall be made (A) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding-up) to the
Series A Preferred Stock unless prior thereto, the holders of shares of Series A
Preferred Stock shall have received the higher of (i) $1000 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, or (ii) an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1000 times the aggregate amount to be distributed per share to holders of Common
Stock; nor shall any distribution be made (B) to the holders of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or winding-up)
with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all other such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding-up. In the event the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the provision in clause (A) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, or otherwise changed, then in any
such case each share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount
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per share (subject to the provision for adjustment hereinafter set forth) equal
to 1000 times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall not
be redeemable.
Section 9. Rank. Unless otherwise provided in the Restated Certificate of
Incorporation of the Corporation or a Certificate of Designation relating to a
subsequent series of preferred stock of the Corporation, the Series A Preferred
Stock shall rank junior to all other series of the Corporation's preferred stock
as to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding-up, and senior to the Common Stock of this Corporation.
Section 10. Amendment. The Restated Certificate of Incorporation of the
Corporation, as amended, shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single series.
Section 11. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share (in one one-thousandths of a share and integral multiples
thereof) which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A
Preferred Stock.
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48
IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf
of the Corporation by its [title] and attested by its Secretary this th day
of , .
-------------------------------
Name: [officer]
Title: [title]
ATTEST:
-----------------------------
Name:
Title: Secretary
7
49
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER __________ ____, 2011 OR EARLIER IF THE BOARD OF DIRECTORS
ORDERS THE REDEMPTION OR EXCHANGE OF THE RIGHTS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS
HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE
ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH
JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE.
Rights Certificate
PRINCIPAL FINANCIAL GROUP, INC.
This certifies that __________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of _______ ____, 2001, as the same may be amended from time
to time (the "RIGHTS AGREEMENT"), between Principal Financial Group, Inc., a
Delaware corporation (the "CORPORATION"), and ______________, a ________
corporation (the "RIGHTS AGENT"), to purchase from the Corporation at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M. ([ ____ ] time) on_________ ____, 2011, at the principal
office of the Rights Agent, or its successors as Rights Agent, one
one-thousandth of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, par value $1.00 per share (the "PREFERRED
STOCK"), of the Corporation, at a purchase price of $______ per one
one-thousandth of a share of Preferred Stock (the "PURCHASE PRICE"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and the Certificate contained therein duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-thousands
of a share of Preferred Stock which may be purchased upon exercise thereof) set
forth above, and the Purchase Price per one one-thousandth of a share of
Preferred
50
Stock set forth above, are the number and Purchase Price as of , ,
based on the shares of Preferred Stock as constituted at such date.
From and after the first occurrence of a Section 11(a)(ii) Event (as
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person (or of any Associate or Affiliate
thereof) who becomes a transferee after such Acquiring Person (or any Associate
or Affiliate thereof) becomes such or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of such Acquiring Person (or of
any Associate or Affiliate thereof) who becomes a transferee prior to or
concurrently with such Acquiring Person becoming such, such Rights shall become
null and void and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
The Rights evidenced by this Right Certificate shall not be exercisable,
and shall be void so long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have been obtained or be
obtainable.
As provided in the Rights Agreement, the Purchase Price and the number of
one one-thousandths of a share of Preferred Stock or the number and kind of
other securities which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events, including Section 11(a)(ii) Events and
Section 13 Events (as defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, as it may be amended from time to time,
which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the
Corporation and the holders of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of such Rights
under the specific circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file at the principal executive offices of the
Corporation and the above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
one one-thousandths of a share of Preferred Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have
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51
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 Right Certificate may be redeemed by the Corporation at a redemption price
of $.001 per Right at any time prior to the earlier of (i) the Stock Acquisition
Time (as defined in the Rights Agreement) and (ii) the close of business on the
Expiration Date (as defined in the Rights Agreement). Subject to the provisions
of the Rights Agreement, the rights evidenced by this Right Certificate may be
exchanged in whole or part for shares of Common Stock or fractional shares of
Preferred Stock (or any other substantially similar series of preferred stock of
the Corporation).
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Corporation, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
Other than those provisions relating to the redemption price of the Rights
and the Expiration Date, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Corporation in any respect whatsoever
up until the Stock Acquisition Time and thereafter in certain respects which do
not adversely affect the interests of holders of Right Certificates (other than
an Acquiring Person or the Affiliates or Associates thereof).
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Preferred Stock
or of any other securities of the Corporation which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or 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.
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52
WITNESS the facsimile signature of the proper officers of the Corporation
and its corporate seal. Dated as of ______ _____, _____.
ATTEST: PRINCIPAL FINANCIAL GROUP, INC.
By
----------------------------- ---------------------------------
Secretary Title:
Countersigned:
[RIGHTS AGENT]
By
--------------------------
Authorized Signature
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53
[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
Corporation, with full power of substitution.
Dated:_____________, ____
-----------------------------------
Signature
Signatures Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement); and (2)
after due inquiry and to the best
54
knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate thereof.
------------------------------------
Signature
2
55
NOTICE
The signature to the foregoing Assignment 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.
56
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Principal Financial Group, Inc.:
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock issuable upon the exercise of such Rights (or such other securities of the
Corporation or of any other Person which may be issuable upon the exercise of
the Rights) and requests that certificates for such shares be issued in the name
of:
Please insert social security
or other identifying 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:__________________, ____
57
[Form of Election to Purchase -- continued]
--------------------------
Signature
(Signature must conform in
all respects to name of
holder as specified on the
face of this Right
Certificate.)
Signature Guaranteed:
--------------------------------------------------------------------------------
(To be completed if applicable)
The undersigned hereby certifies that (1) the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement); (2) after due inquiry
and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the
Rights evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person of an Affiliate or Associate thereof.
--------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above in the Forms of Assignment
and Election is not completed, the Corporation will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an Assignment, will affix a legend to that effect on any Right
Certificates issued in exchange for this Rights Certificate.
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58
EXHIBIT C
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
PRINCIPAL FINANCIAL GROUP, INC.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
The Board of Directors of Principal Financial Group, Inc. (the
"CORPORATION") has authorized the issuance of one Preferred Share Purchase Right
(a "RIGHT") for each outstanding share of Common Stock, par value $0.01 per
share, of the Corporation (the "COMMON STOCK"). The following is a summary of
the terms of the Rights.
Each Right entitles the registered holder to purchase from the Corporation
one one-thousandth of a share of Series A Junior Participating Preferred Stock,
par value $1.00 per share, of the Corporation (the "PREFERRED STOCK") at a price
of $______ per one one-thousandth of a share of Preferred Stock, subject to
adjustment (the "PURCHASE PRICE"). The description and terms of the Rights are
set forth in a Rights Agreement, dated as of ___________ ____, 2001(the Rights
Agreement, as it may be amended from time to time, is hereinafter referred to as
the "RIGHTS AGREEMENT") between the Corporation and ___________________, as
Rights Agent (the "RIGHTS AGENT").
Initially, the Rights will be attached to all Common Stock book-entries or
certificates representing shares then outstanding, and no separate book-entries
or certificates representing the Rights ("RIGHT CERTIFICATES") will be
distributed. The Rights will separate from the Common Stock and a "DISTRIBUTION
DATE" will occur upon the earlier to occur of (i) ten days following the time
(the "STOCK ACQUISITION TIME") of a public announcement or notice to the
Corporation that a person or group of affiliated or associated persons (an
"ACQUIRING PERSON") acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding Common Stock of the Corporation, and
(ii) ten business days (or, if determined by the Board of Directors, a specified
or unspecified later date) following the commencement or announcement of an
intention to make a tender offer or exchange offer which, if successful, would
cause the bidder to own 10% of more of the outstanding Common Stock.
59
The Rights Agreement provides that, until the Distribution Date, (i) the
Rights will be transferred with and only with the Common Stock, (ii) new Common
Stock certificates issued after __________ ____, 2001, upon transfer, new
issuance or reissuance of the Common Stock, will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any of the Common Stock book-entries or certificates outstanding
will also constitute the transfer of the Rights associated with the shares of
Common Stock represented by such certificate or book-entry. As soon as
practicable following the Distribution Date, separate Right Certificates will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and such separate Right Certificates alone will evidence
the Rights. Except in connection with issuance of Common Stock pursuant to
employee stock plans, options and certain convertible securities, and except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on __________ ____, 2011, unless earlier redeemed or exchanged by the
Corporation as described below.
In the event that, after the Stock Acquisition Time, the Corporation is
acquired in a merger or other business combination transaction (except certain
transactions with a person who became an Acquiring Person as a result of a
tender offer described in the next succeeding paragraph) or 50% or more of its
assets, cash flow or earning power is sold, proper provision shall be made so
that each holder of a Right shall thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring corporation which at the time of such
transaction would have a market value (as defined in the Rights Agreement) of
two times the Purchase Price of the Right. In the event that, after the Stock
Acquisition Time, the Corporation were the surviving corporation of a merger and
its Common Stock were changed or exchanged, proper provision shall be made so
that each holder of a Right will thereafter have the right to receive upon
exercise that number of shares of common stock of the Corporation having a
market value of two times the exercise price of the Right.
In the event that a person or group becomes an Acquiring Person, each
holder of a Right (other than the Acquiring Person) will thereafter have the
right to receive upon exercise that number of shares of Common Stock (or, in
certain circumstances, cash, a reduction in the Purchase Price, Preferred Stock,
other equity securities of the Corporation, debt securities of the Corporation,
other property or a combination thereof) having a market value (as defined in
the Rights Agreement) of two times the Purchase Price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person (or an affiliate, associate or transferee thereof) will be null
and void. A
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60
person will not be an Acquiring Person if the Board of Directors of the
Corporation determines that such person or group became an Acquiring Person
inadvertently and such person or group promptly divests itself of a sufficient
number of shares of Common Stock so that such person or group is no longer an
Acquiring Person.
The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of Preferred Stock of certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the current market price of Preferred Stock or (iii) upon the distribution to
holders of Preferred Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to above). The number
of Rights and number of shares of Preferred Stock issuable upon the exercise of
each Right are also subject to adjustment in the event of a stock split,
combination or stock dividend on the Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock which may, upon the election of the Corporation, be
evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time prior to the earlier of the Stock Acquisition Time and the
Expiration Date (as defined in the Rights Agreement), the Board of Directors may
redeem the Rights in whole, but not in part, at a price of $.001 per Right (the
"REDEMPTION PRICE"). Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
At any time after a person becomes an Acquiring Person and prior to the
acquisition by such Person of 50% or more of the outstanding shares of Common
Stock, the Board of Directors of the Corporation may exchange the Rights (other
than Rights beneficially owned by such Person which have become void), in whole
or part, at an exchange ratio of one share of Common Stock per Right (subject to
adjustment). The Corporation, at its option, may substitute one-thousandth
(subject to adjustment) of a share of Preferred Stock (or other series of
substantially similar preferred stock of the Corporation) for each share of
Common Stock to be exchanged.
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61
Each share of Preferred Stock purchasable upon exercise of the Rights will
have a minimum preferential dividend of $10 per year, but will be entitled to
receive, in the aggregate, a dividend of 1000 times the dividend declared on the
shares of Common Stock. In the event of liquidation, the holders of the shares
of Preferred Stock will be entitled to receive a minimum liquidation payment of
$1000 per share, but will be entitled to receive an aggregate liquidation
payment equal to 1000 times the payment made per share of Common Stock. Each
share of Preferred Stock will have one thousand votes, voting together with the
shares of Common Stock. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 1000 times the amount and type of
consideration received per share of Common Stock. The rights of the shares of
Preferred Stock as to dividends and liquidation, and in the event of mergers and
consolidations, are protected by anti-dilution provisions.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Corporation, other than rights resulting from
such holder's ownership of shares of Common Stock, including, without
limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to stockholders or to the Corporation,
stockholders may, depending upon the circumstances, recognize taxable income in
the event that the Rights become exercisable for Common Stock (or other
consideration) of the Corporation or for common stock of the acquiring
corporation as set forth above.
Other than those provisions relating to the Redemption Price and expiration
date of the Rights, any of the provisions of the Rights Agreement may be amended
by the Board of Directors prior to the Stock Acquisition Time. After such time,
the provisions of the Rights Agreement may be amended by the Board of Directors
in order to cure any ambiguity, to correct or supplement defective or
inconsistent provisions, to shorten or lengthen any time period under the Rights
Agreement, to make changes which do not adversely affect the interests of the
holders of Rights (excluding the interests of any Acquiring Person) or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
The term "VOTING STOCK" means (i) the shares of Common Stock of the
Corporation and (ii) any other shares of capital stock of the Corporation
entitled to vote generally in the election of directors or entitled to vote
together with the shares of Common Stock in respect of any merger,
consolidation, sale of all or substantially all of the Corporation's assets,
liquidation, dissolution or winding up.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Corporation's Registration Statement on
Form S-1 dated ___________ ____, 2001. Copies of the Rights Agreement are
available free of charge
4
62
from the Corporation. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, as it may be amended from time to time, which is hereby incorporated
herein by reference.
5
63
================================================================================
PRINCIPAL FINANCIAL GROUP, INC.
and
[RIGHTS AGENT]
----------------
RIGHTS AGREEMENT
Dated as of ___________ ____, 2001
================================================================================
64
TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions......................................................................1
Section 2. Appointment of Rights Agent..............................................................6
Section 3. Issue of Right Certificates..............................................................7
Section 4. Form of Right Certificates...............................................................8
Section 5. Countersignature and Registration........................................................9
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates........................................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...........................10
Section 8. Cancellation and Destruction of Right Certificates......................................12
Section 9. Reservation and Availability of Capital Stock...........................................13
Section 10. Preferred Stock Record Date.............................................................14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.............15
Section 12. Certificate of Adjusted Purchase Price or Number of Shares..............................23
Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power.........23
Section 14. Fractional Rights and Fractional Shares.................................................26
Section 15. Rights of Action........................................................................27
Section 16. Agreement of Right Holders..............................................................28
Section 17. Right Certificate Holder Not Deemed a Stockholder.......................................29
Section 18. Concerning the Rights Agent.............................................................29
Section 19. Merger or Consolidation or Change of Name of Rights Agent...............................29
i
65
Section 20. Duties of Rights Agent..................................................................30
Section 21. Change of Rights Agent..................................................................32
Section 22. Issuance of New Right Certificates......................................................33
Section 23. Redemption..............................................................................34
Section 24. Exchange................................................................................34
Section 25. Notice of Certain Events................................................................36
Section 26. Notices.................................................................................37
Section 27. Supplements and Amendments..............................................................37
Section 28. Successors..............................................................................38
Section 29. Determinations and Actions by the Board of Directors, etc...............................38
Section 30. Benefits of this Agreement..............................................................39
Section 31. Severability............................................................................39
Section 32. Governing Law...........................................................................40
Section 33. Counterparts............................................................................40
Section 34. Descriptive Headings....................................................................40
Exhibit A - Form of Certificate of Designation
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Stock
ii
