EXHIBIT 4.2
SHAREHOLDER RIGHTS AGREEMENT
between
FIRST SECURITY CORPORATION
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
as Rights Agent
Dated as of October 27, 1998
SHAREHOLDER RIGHTS AGREEMENT
Table of Contents
PAGE
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions........................................ 2
ARTICLE II
THE RIGHTS
Section 2.1 Summary of Rights.......................................... 9
Section 2.2 Legend on Common Stock Certificates........................ 9
Section 2.3 Exercise of Rights; Separation of Rights...................10
Section 2.4 Adjustments to Exercise Price; Number of Rights............13
Section 2.5 Date on Which Exercise is Effective........................15
Section 2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates...............................................16
Section 2.7 Registration, Registration of Transfer and Exchange........17
Section 2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates..18
Section 2.9 Persons Deemed Owners......................................18
Section 2.10 Delivery and Cancellation of Certificates..................18
Section 2.11 Agreement of Rights Holders................................19
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
Section 3.1 Flip-in....................................................20
Section 3.2 Flip-over..................................................23
ARTICLE IV
THE RIGHTS AGENT
Section 4.1 General....................................................24
Section 4.2 Merger or Consolidation or Change of Name of Rights Agent..25
Section 4.3 Duties of Rights Agent.....................................26
Section 4.4 Change of Rights Agent.....................................28
ARTICLE V
MISCELLANEOUS
Section 5.1 Redemption.................................................30
Section 5.2 Expiration.................................................30
Section 5.3 Issuance of New Rights Certificates........................30
Section 5.4 Supplements and Amendments.................................31
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Section 5.5 Fractional Shares..........................................31
Section 5.6 Rights of Action...........................................32
Section 5.7 Holder of Rights Not Deemed a Shareholder..................32
Section 5.8 Notice of Proposed Actions.................................33
Section 5.9 Notices....................................................33
Section 5.10 Suspension of Exercisability...............................34
Section 5.11 Costs of Enforcement.......................................34
Section 5.12 Successors.................................................34
Section 5.13 Benefits of this Agreement.................................35
Section 5.14 Descriptive Headings.......................................35
Section 5.15 Governing Law..............................................35
Section 5.16 Counterparts...............................................35
Section 5.17 Severability...............................................35
EXHIBITS
Exhibit A Form of Rights Certificate
(Together with Form of
Election of Exercise)
Exhibit B Certificate of Designation of Preferences
of Series of Shares of Preferred Stock
Exhibit C Summary of Rights
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SHAREHOLDER RIGHTS AGREEMENT
THIS SHAREHOLDER RIGHTS AGREEMENT (the "Agreement"), dated as of
October 27, 1998, by and between First Security Corporation, a Delaware
corporation (the "Company"), and First Chicago Trust Company of New York, as
Rights Agent (the "Rights Agent", which term shall include any successor Rights
Agent hereunder).
R E C I T A L S
A. The Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("RIGHT") in respect of each share of Common
Stock (as hereinafter defined) held of record as of the close of business on
August 28, 1999 (the "RECORD TIME") and (b) authorized the issuance of one Right
in respect of each share of Common Stock issued prior to the occurrence of
certain events as specified herein.
B. Each Right entitles the holder thereof, after the Separation Time,
to purchase securities of the Company (or, in certain cases, of certain other
entities) pursuant to the terms and subject to the conditions set forth herein.
C. The Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein.
A G R E E M E N T
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I - CERTAIN DEFINITIONS
1.1 CERTAIN DEFINITIONS. For purposes of this Agreement, the following
terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the shares of
Common Stock of the Company then outstanding, but shall not include the Company,
any Subsidiary (as such term is hereinafter defined) of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company, or any
entity holding shares of Common Stock for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of shares of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the shares
of Common Stock of the Company then outstanding; PROVIDED, HOWEVER, that if a
Person shall become the Beneficial Owner of 15% or more of the shares of Common
Stock of the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner (other than by means of a stock dividend or stock split) of any
additional shares of Company Stock of the Company, then such Person shall be
deemed to be an "Acquiring Person". Notwithstanding the foregoing, if the Board
of Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of shares of Common Stock
so that such Person would no longer be an "Acquiring
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Person," as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement.
(b) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934,
as such Rule is in effect on the date of this Agreement.
(c) A Person shall be deemed the "BENEFICIAL OWNER", and to have
"BENEFICIAL OWNERSHIP", of, and to "BENEFICIALLY OWN", any securities as to
which such Person or any of such Person's Affiliates or Associates is or may be
deemed to be the beneficial owner pursuant to Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, as such Rules are in effect on the date of this
Agreement, as well as any securities as to which such Person or any of such
Person's Affiliates or Associates has the right to become Beneficial Owner
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed the "Beneficial Owner", or to have "Beneficial Ownership", of, or to
"Beneficially Own", any security (i) solely because such security has been
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered security is accepted
for payment or exchange, (ii) solely because such Person or any of such Person's
Affiliates or Associates has or shares the power to vote or direct the voting of
such security pursuant to a revocable proxy given in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations under the Securities Exchange Act of 1934, except if such
power (or the arrangements relating thereto) is then reportable under Item 6 of
Schedule 13D under the
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Securities Exchange Act of 1934 (or any similar provision of a comparable or
successor report), (iii) solely because of the grant by the Company to such
Person, in connection with the execution of an agreement to acquire the Company,
or options to acquire such security or (iv) held for or pursuant to the terms of
any employee stock ownership or other employee benefit plan of the Company or a
majority-owned Subsidiary of the Company. For purposes of this Agreement, in
determining the percentage of the outstanding shares of Common Stock with
respect to which a Person is the Beneficial Owner, all shares as to which such
Person is deemed the Beneficial Owner shall be deemed outstanding.
(d) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in Salt Lake City, Utah, are generally
authorized or obligated by law or executive order to close.
(e) "CLOSE OF BUSINESS" on any given date shall mean the time on such
date (or, if such a date is not a Business Day, the time on the next succeeding
Business Day) at which the offices of the transfer agent for the Common Stock
(or, after the Separation Time, the offices of the Rights Agent) are closed to
the public.
(f) "COMMON STOCK" shall mean the shares of Common Stock, par value
$1.25 per share, of the Company.
(g) "EXERCISE PRICE" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the Exercise Price
shall equal $85.00.
(h) "EXPIRATION TIME" shall mean the earlier of (i) the Redemption
Time (as defined below) or (ii) the close of business on the tenth anniversary
of the date hereof.
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(i) "FLIP-IN DATE" shall mean any Stock Acquisition Date (as defined
below) which is not the result of a Flip-over Transaction or Event (as defined
below).
(j) "FLIP-OVER STOCK" of any Person shall mean the capital stock (or
similar equity interest) with the greatest voting power in respect of the
election of directors (or other Persons similarly responsible for the direction
of the business and affairs) of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately controls
such first-mentioned Person.
(k) "FLIP-OVER TRANSACTION OR EVENT" shall mean a transaction or
series of transactions at any time after a Person has become an Acquiring Person
in which, directly or indirectly, (a) the Company shall consolidate with, or
merge with and into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or the Company) or
cash or any other property, or (c) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer) assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries.
(l) "JUNIOR PREFERRED STOCK" shall mean the series of Junior Series B
Preferred Stock, no par value per share, of the Company created by a Certificate
of Designation of Preferences of Series of Preferred Stock in substantially the
form set forth in Exhibit B hereto appropriately completed.
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(m) "MARKET PRICE" per share of any security on any date (the
"DETERMINATION DATE") shall mean the arithmetic average of the daily closing
prices per share of such security (determined as described below) on each of the
20 consecutive Trading Days through and including the Trading Day immediately
preceding the Determination Date; PROVIDED, HOWEVER, that if an event of a type
analogous to any of the events described in Section 2.4 hereof shall have caused
the closing price on one or more Trading Days during such period of 20 Trading
Days not to be fully comparable with the closing price on the Determination
Date, each such closing price so used shall be appropriately adjusted in order
to make it fully comparable with the closing price on the Determination Date.
The closing price per share of any security on any date shall be the last
reported sale price, regular way, or, in case no such sale takes place or is
reported on such date, the average of the closing bid and asked prices, regular
way, for such security, 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, Inc. or, if such security is not listed
or admitted to trading on the New York Stock Exchange, Inc., as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such security is
listed or admitted to trading or, if such security is not listed or admitted to
trading on any national securities exchange, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other self-regulatory organization or registered securities information
processor (as such terms are used under the Securities Exchange Act of 1934) as
then reports trading information concerning such security, or, if on any such
date such security is not listed or admitted to trading on any national
securities exchange or quoted by any such organization, the average of the
closing bid and asked prices as furnished by any registered securities dealer
that is a market
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maker (as such term is used under the Securities Exchange Act
of 1934) in such security and which is selected by the Board of Directors of the
Company; PROVIDED, HOWEVER, that if on any such date such security is not listed
or admitted to trading on a national securities exchange or traded in the
over-the-counter market, the closing price of such security on such date shall
mean the fair market value of such security on such date as determined in good
faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm, and set forth in a certificate
delivered to the Rights Agent.
(n) "PERSON" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the Securities
Exchange Act of 1934, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
(o) "REDEMPTION PRICE" shall mean an amount (calculated to the nearest
one one-hundredth of a cent) equal to the Exercise Price, as in effect at the
Redemption Time, divided by 10,000 (I.E., initially $0.01).
(p) "REDEMPTION TIME" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1 hereof.
(q) "SEPARATION TIME" shall mean the close of business on the earlier
of (i) the tenth day after the Flip-in Date or (ii) the tenth business day (or
such later date as may be determined by action of the Board of Directors prior
to such time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding shares of Common Stock for or pursuant to the
terms of any such plan) of, or of the first public announcement of the intention
of any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of
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any Subsidiary of the Company or any entity holding shares of Common Stock for
or pursuant to the terms of any such plan) to commence, a tender or exchange
offer the consummation of which would result in any Person becoming the
Beneficial Owner of shares of Common Stock aggregating 15% or more of the then
outstanding shares of Common Stock (including any such date which is after the
date of this Agreement and prior to the issuance of the Rights); PROVIDED that,
if the foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time.
(r) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement by the Company (by any means) or by an Acquiring Person (by means
of filing a Schedule 13D under the Securities Act of 1934 (or any comparable or
successor report or schedule) or an amendment thereto) that an Acquiring Person
has become such.
(s) "SUBSIDIARY" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities
ordinarily having voting power in respect of the election of directors (or other
Persons similarly responsible for the direction of the business and affairs) of
such corporation or other entity, or a majority of the equity interest is
Beneficially Owned, directly or indirectly, by such Person.
(t) "TRADING DAY", when used with respect to any security, shall mean
a day on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such security is not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal national securities
exchange on which such security is listed or admitted to trading is open for the
transaction of business or, if such security is not listed or admitted to
trading on any national securities exchange, a Business Day.
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ARTICLE II - THE RIGHTS
2.1 SUMMARY OF RIGHTS. The summary of rights attached hereto as
Exhibit C shall be deemed to be provided to each holder of record of Common
Stock as of the Record Time and will be available to stockholders by mail upon
written request to the Company.
2.2 LEGEND ON COMMON STOCK CERTIFICATES. Certificates for the Common
Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Shareholder Rights
Agreement, dated as of October 27, 1998 (as such may be amended from
time to time, the "Rights Agreement"), between First Security
Corporation (the "Company") and First Chicago Trust Company of New
York, as Rights Agent, 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 Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be redeemed, may be
exchanged for shares of Common Stock or other securities or assets of
the Company, may expire, may become void (if they are "Beneficially
Owned" by an "Acquiring Person" or an Affiliate or Associate thereof,
as such terms are defined in the Rights Agreement, or by any
transferee of any of the foregoing) or may be evidenced by separate
certificates and may no longer be evidenced by this certificate. The
Company will mail or arrange for the mailing of a copy of the Rights
Agreement to the holder of this certificate without charge within five
days after the receipt of a written request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
2.3 EXERCISE OF RIGHTS; SEPARATION OF RIGHTS. (a) Subject to
adjustment as herein set forth, each Right will entitle the holder thereof,
after the Separation Time, to purchase, for the Exercise Price, one
one-thousandth of a share of Junior Preferred Stock.
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(b) Until the Separation Time, (i) no Right may be exercised and (ii)
each Right will be evidenced by the certificate for the associated share of
Common Stock and will be transferable only together with, and will be
transferred by a transfer of, such associated share. Notwithstanding any other
provision of this Agreement, any Rights held by the Company or any of its
Subsidiaries other than in a fiduciary capacity shall not be exercisable.
Nothing in the preceding sentence shall be construed as limiting the right of
the Company and it Subsidiaries to acquire or transfer Rights.
(c) Subject to the terms and conditions herein set forth, after the
Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised and (ii) may be transferred independently of the shares of Common
Stock in respect of which they were originally issued. Promptly following the
Separation Time, the Rights Agent will mail to each holder of record of Common
Stock as of the Separation Time, at such holder's address as shown by the
records of the Company (the Company hereby agreeing to furnish copies of such
records to the Rights Agent for this purpose), (x) a certificate (a "Rights
Certificate") in substantially the form of Exhibit A hereto appropriately
completed, representing the number of Rights held by such holder at the
Separation Time and having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any national securities
exchange or other self-regulatory organization (as such terms are used under the
Securities Exchange Act of 1934) on which the Rights may from time to time be
listed or through which the Rights may from time to time be traded, or to
conform to usage, and (y) a disclosure statement describing the Rights.
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(d) Subject to Sections 2.3(b) and 5.10, Rights may be exercised on
any Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised together with a sum sufficient to cover any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares or depositary receipts (or both) in a name other than
that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d) above, and subject to the
conditions set forth in this Agreement, the Rights Agent will thereupon promptly
(i)(A) requisition from a transfer agent for the stock or other securities
purchasable upon exercise of the Rights Certificates evidencing such number of
shares or other securities to be purchased (the Company hereby irrevocably
authorizing its transfer agents to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 5.5 hereof not to issue certificates
representing fractional shares, requisition from the depositary selected by the
Company depositary receipts representing the fractional shares to be purchased
or requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 hereof and (ii) after receipt
of such certificates, depositary receipts and/or cash, deliver the same to or
upon the order of the registered holder of such Rights Certificate, registered
(in the case of certificates or depositary receipts) in such name or names as
may be designated by such holder.
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(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent
to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) cause to be kept
available until the Expiration Time out of its authorized and unissued shares of
capital stock a number of shares of preferred stock that will be sufficient to
permit the creation and establishment of the Junior Preferred Stock and the
exercise in full of all outstanding Rights; (ii) immediately upon the occurrence
of the Separation Time, file with the Secretary of State of the State of
Delaware a Certificate of Designation of a Series of Preferred Stock in
substantially the form set forth in Exhibit B hereto and take all such further
action as may be necessary to create and establish the Junior Preferred Stock;
(iii) take all such action as may be necessary to ensure that all shares
delivered upon exercise of Rights shall, at the time of delivery thereof
(subject to payment of the Exercise Price), be duly and validly authorized,
executed, issued and delivered and fully paid and nonassessable; (iv) take all
such action as may be necessary to ensure that all securities other than shares
delivered upon exercise of Rights shall, at the time of delivery thereof
(subject to payment of the Exercise Price), be duly and validly authorized,
executed, issued and delivered and valid and binding obligations of the issuer
thereof; (v) take all such action as may be necessary to comply with any
applicable requirements of the Securities Act of 1933 or the Securities Exchange
Act of 1934, and the rules and regulations thereunder, and any other applicable
law, rule or regulation, in connection with the issuance of any shares upon
exercise of Rights; (vi) use its best efforts to cause all shares and other
securities issued upon exercise of Rights to be listed on a national securities
exchange or traded in the over-the-counter market, as
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reported by NASDAQ or another self-regulatory organization or registered
securities information processor (as such terms are used under the Securities
Exchange Act of 1934), upon issuance; and (vii) pay when due and payable any and
all federal and state transfer taxes and charges which may be payable in respect
of the original issuance or delivery of the Rights Certificates or of any shares
issued upon the exercise of Rights, provided that the Company shall not be
required to pay any transfer tax or charge which may be payable in respect of
any transfer involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for shares in a name other than that of the
holder of the Rights being transferred or exercised.
2.4 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS. (a) In the event
the Company shall at any time after the Record Time and prior to the Separation
Time (i) declare or pay a dividend on Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares of Common Stock, (x) the Exercise Price in
effect after such adjustment will be equal to the Exercise Price in effect
immediately prior to such adjustment divided by the number of shares of Common
Stock (the "Expansion Factor") that a holder of one share of Common Stock
immediately prior to such dividend, subdivision or combination would hold
thereafter as a result thereof and (y) each Right held prior to such adjustment
will become that number of Rights equal to the Expansion Factor, and the
adjusted number of Rights will be deemed to be distributed among the shares of
Common Stock with respect to which the original Rights were associated (if they
remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
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In the event the Company shall, at any time after the Record Time and
prior to the earlier of (i) either (x) the occurrence of the events described in
Section 3.1(c) hereof or (y) the consummation of a Flip-over Transaction or
Event, (ii) the redemption of the Rights pursuant to Section 5.1 of the Rights
Plan, and (iii) the Expiration Time, issue any shares of Common Stock otherwise
than in a transaction referred to in the preceding paragraph, each such share of
Common Stock so issued shall automatically have one new Right associated with
it, which Right shall be evidenced by the certificate representing such share
(if such share is issued prior to the Separation Time) or by a Rights
Certificate (if such share is issued after the Separation Time).
(b) In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Common Stock (other than pursuant to a
regular periodic cash dividend or a dividend paid solely in Common Stock)
whether by dividend, in a reclassification or recapitalization (including any
such transaction involving a merger, consolidation or binding share exchange),
or otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (ii) promptly file
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with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate and (iii) mail a brief summary thereof to each holder of
Rights.
(d) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the securities so purchasable which
were expressed in the initial Rights Certificates issued hereunder.
2.5 DATE ON WHICH EXERCISE IS EFFECTIVE. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price for such Rights (and any applicable taxes and other governmental
charges payable by the exercising holder hereunder) was made; PROVIDED, HOWEVER,
that if the date of such surrender and payment is a date upon which the stock
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the stock transfer books of the
Company are open.
2.6 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES. (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding
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that such individuals or any of them have ceased to hold such offices prior to
the countersignature and delivery of such Rights Certificates.
Promptly after the Company learns of the Separation Time, the Company
will notify the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Company to the Rights Agent for countersignature,
and the Rights Agent shall manually countersign and deliver such Rights
Certificates to the holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose until manually countersigned
by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. (a) After the
Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) below, the Company will execute,
and the Rights Agent will countersign and deliver, in the name of the holder or
the designated transferee or transferees, as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing the same aggregate
number of Rights as did the Rights Certificate so surrendered.
-16-
(b) Except as otherwise provided in Section 3.1(b) hereof, all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
(d) The Company shall not be required to register the transfer or
exchange of any Rights after the Rights have been redeemed under Section 5.1
hereof or become void pursuant to Section 3.1(b) hereof.
2.8 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES. (a) If
any mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, the Company shall execute and the Rights Agent shall
countersign and deliver in exchange therefor a new Rights Certificate evidencing
the same number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, in the absence of notice to the Company or the Rights
Agent that such Rights Certificate has been acquired by a BONA FIDE purchaser,
the Company
-17-
shall execute and upon its request the Rights Agent shall
countersign and deliver, in lieu of any such destroyed, lost or stolen Rights
Certificate, a new Rights Certificate evidencing the same number of Rights as
did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8
in lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights duly issued hereunder.
2.9 PERSONS DEEMED OWNERS. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
2.10 DELIVERY AND CANCELLATION OF CERTIFICATES. All Rights
Certificates surrendered upon exercise or for redemption, registration of
transfer or exchange shall, if
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surrendered to any person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent.
The Company may at any time deliver to the Rights Agent for cancellation any
Rights Certificates previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Rights Certificates
so delivered shall be promptly cancelled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for any Rights
Certificates cancelled as provided in this Section 2.10, except as expressly
permitted by this Agreement. The Rights Agent shall return all cancelled Rights
Certificates to the Company.
2.11 AGREEMENT OF RIGHTS HOLDERS. Every holder of Rights by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated share of
Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
-19-
(d) Rights beneficially owned by certain Persons will under the
circumstances set forth in Section 3.1(b) become void; and
(e) This Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III - ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
TRANSACTIONS
3.1 FLIP-IN. (a) In the event that prior to the Expiration Time a
Flip-in Date shall occur, then, if applicable law permits Rights owned by
certain Persons referred to in Section 3.1(b) hereof to become void pursuant to
the provisions thereof, the Company shall take such action as shall be necessary
to ensure and provide that, except as provided below, each Right shall
constitute the right to purchase from the Company, upon exercise thereof in
accordance with the terms hereof (but subject to Section 5.10 hereof), that
number of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on or
after such Stock Acquisition Date an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred with respect to
the Common Stock).
(b) Notwithstanding the foregoing, to the extent permitted by
applicable law, any Rights that are or were Beneficially Owned on or after the
Stock Acquisition Date by an Acquiring Person or an Affiliate or Associate
thereof or by any transferee, direct or indirect, of any of the foregoing shall
become void and any holder of such Rights (including transferees) shall
thereafter have no right to exercise or transfer such Rights. If any Rights
Certificate is presented for assignment or exercise and the Person presenting
the same does not complete the
-20-
certification set forth at the end of the form of assignment or notice of
election to exercise and provide such additional evidence of the identity of the
Beneficial Owner and its Affiliates and Associates (or former Beneficial Owners
and their Affiliates and Associates) as the Company shall reasonably request,
then the Company shall be entitled to conclusively deem the Beneficial Owner
thereof to be an Acquiring Person or an Affiliate or Associate thereof or a
transferee of any of the foregoing and accordingly will, to the extent permitted
by applicable law, deem the Rights evidenced thereby to be void and not
transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at any
time after a Flip-in Date and prior to the time that an Acquiring Person becomes
the Beneficial Owner of more than 50% of the outstanding shares of Common Stock,
but only if applicable law permits Rights owned by certain Persons referred to
in Section 3.1(b) hereof to become void pursuant to the provisions thereof,
elect to exchange all or part of the then-outstanding Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
3.1(b)) for shares of Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted in order to protect the interests of
holders of Rights generally in the event that after the Separation Time an event
of a type analogous to any of the events described in Section 2.4(a) or (b)
shall have occurred with respect to the Common Stock (such exchange ratio, as
adjusted from time to time, being hereinafter referred to as the "EXCHANGE
RATIO").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. Promptly after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying
-21-
the steps to be taken to receive shares of Common Stock in exchange for Rights)
to the Rights Agent and the holders of the then-outstanding Rights by mailing
such notice in accordance with Section 5.9.
(d) Whenever the Company shall become obligated under Section 3.1(a)
or (c) to issue shares of Common Stock upon exercise of or in exchange for
Rights, the Company, at its option, may substitute therefor shares of Junior
Preferred Stock, at a ratio of one one-thousandth of a share of Junior Preferred
Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Common Stock or Junior Preferred Stock of the
Company to permit the exercise or exchange in full of the Rights in accordance
with Section 3.1(a) or (c), the Company shall either (i) cause sufficient
additional shares to be authorized (PROVIDED that if such authorization is not
obtained, the Company will take the action specified in clause (ii) of this
sentence) or (ii) take such action as shall be necessary to ensure and provide,
to the extent permitted by applicable law and any agreements or instruments in
effect on the Stock Acquisition Date to which it is a party, that each Right
shall thereafter constitute the right to receive, (x) at the Company's option,
either (A) in return for the Exercise Price, debt or equity securities or other
assets (or a combination thereof) having a fair value equal to twice the
Exercise Price, or (B) without payment of consideration (except as otherwise
required by applicable law), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the Exercise Price, or (y) if
the Board of Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Flip-in Date times the Exchange Ratio in
effect on the Flip-in Date, where in any case set
-22-
forth in (x) or (y) above the fair value of such debt or equity securities or
other assets shall be as determined in good faith by the Board of Directors of
the Company, after consultation with a nationally recognized investment banking
firm.
3.2 FLIP-OVER. (a) Prior to the Expiration Time the Company shall not
enter into any agreement with any Acquiring Person with respect to, or
consummate or permit to occur, any Flip-over Transaction or Event, unless and
until it shall have entered into a supplemental agreement with the Person
engaging in such Flip-over Transaction or Event (the "FLIP-OVER ENTITY"), for
the benefit of the holders of the Rights, providing that, upon consummation or
occurrence of the Flip-over Transaction or Event (i) each Right shall thereafter
constitute the right to purchase from the Flip-over Entity, upon exercise
thereof in accordance with the terms hereof, that number of shares of Flip-over
Stock of the Flip-over Entity having an aggregate Market Price on the date of
consummation or occurrence of such Flip-over Transaction or Event equal to twice
the Exercise Price for an amount in cash equal to the Exercise Price (such right
to be appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that after such date of consummation or occurrence
an event of a type analogous to any of the events described in Section 2.4(a) or
(b) shall have occurred with respect to the Flip-over Stock) and (ii) the
Flip-over Entity shall thereafter be liable for, and shall assume, by virtue of
such Flip-over Transaction or Event and such supplemental agreement, all the
obligations and duties of the Company pursuant to this Agreement. The provisions
of this Section 3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof in connection therewith, the Company shall not
enter into any agreement with respect to, or consummate or permit to occur, any
Flip-over Transaction or Event if at the time
-23-
thereof there are any rights, warrants or securities outstanding or any other
arrangements, agreements or instruments which would eliminate or otherwise
diminish in any respect the benefits intended to be afforded by this Rights
Agreement to the holders of Rights upon consummation or occurrence of such
transaction or event.
ARTICLE IV - THE RIGHTS AGENT
4.1 GENERAL. (a) The Company hereby appoints the Rights Agent to act
as agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company agrees to pay to
the Rights Agent reasonable compensation as shall be agreed to in writing from
time to time for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses (including expenses
incurred by the Rights Agent under Section 4.4) and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without 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.
(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 certificate for
securities purchasable upon exercise of Rights, Rights Certificate, certificate
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate,
-24-
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.
4.2 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 is a party, or any corporation succeeding to the shareholder services
business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case, at the time
such successor Rights Agent succeeds to the agency created by this Agreement,
any of the Rights Certificates have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in case
at that time any of the Rights Certificates have not been countersigned, any
successor Rights Agent may countersign such Rights 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 Rights Certificates will have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name
-25-
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
4.3 DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel will 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 deems it necessary or desirable that any fact or matter be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by a person believed by the Rights Agent to be the
Chairman of the Board, the President or any Vice President and by the Treasurer
or any Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will 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 will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable
-26-
upon exercise of Rights or the Rights Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and recitals
are and will be deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due authorization, execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any certificate for securities
purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b) hereof) or any adjustment required under the provisions of
Section 2.4, 3.1 or 3.2 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
-27-
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
4.4 CHANGE OF RIGHTS AGENT. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 60 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9.
-28-
The Company may remove the Rights Agent upon 60 days' notice in writing, mailed
to the Rights Agent and to each transfer agent of the Common Stock by registered
or certified mail, and to the holders of the Rights in accordance with Section
5.9. If the Rights Agent should resign or be removed or otherwise become
incapable of acting, the Company will appoint a successor to the Rights Agent.
If the Company fails to make such appointment within a period of 30 days after
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
any Rights (which holder shall, with such notice submit such holder's Rights
Certificate for inspection by the Company), then the holder of any Rights or the
Rights Agent may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a national bank or a corporation
organized and doing business under the laws of the United States or of the
States of New York, California or Utah, in good standing, having its principal
office in the States of New York, California or Utah, which is authorized under
such laws to exercise the powers of the Rights Agent contemplated by this
Agreement and is subject to supervision or examination by federal or state
authority and which (A) has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000, or (B) is an affiliate of
a corporation described in clause (A) of this sentence. After appointment, the
successor Rights Agent will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company will file notice thereof in writing with the predecessor Rights Agent
-29-
and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the holders of the Rights in accordance with Section 5.9. Failure to
give any notice provided for in this Section 4.4, 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.
ARTICLE V - MISCELLANEOUS
5.1 REDEMPTION. (a) The Board of Directors of the Company may, at its
option, at any time prior to the Flip-in Date, elect to redeem all (but not less
than all) the then-outstanding Rights at the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price in cash.
Promptly after the action of the Board of Directors electing to redeem, and
thereby redeeming, the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding Rights by mailing
such notice in accordance with Section 5.9.
5.2 EXPIRATION. No Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
redeemed, as provided in Section 5.1 hereof.
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors
-30-
to reflect any adjustment or change in the number or kind or class of shares of
stock purchasable upon the exercise of Rights made in accordance with the
provisions of this Agreement.
5.4 SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent. Without limiting the foregoing, the Company may at any time before the
Flip-in Date amend this Agreement to lower the thresholds set forth in Sections
1.1(a) and 1.1(q) to not less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding shares of Common Stock then known by the
Company to be beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares for or pursuant
to the terms of any such plan) and (ii) 10%.
5.5 FRACTIONAL SHARES. If the Company elects not to issue certificates
representing fractional shares upon exercise of Rights, the Company shall, in
lieu thereof, (a) evidence such fractional shares by depositary receipts issued
pursuant to an appropriate agreement between the Company and a depositary
selected by it, PROVIDED that such agreement shall provide that each holder of a
depositary receipt shall have all of the rights, privileges and preferences to
which such holder would be entitled as a beneficial owner of such fractional
share, or (b) pay to the registered holder of such Rights the same fraction of
the Market Price (determined as of the date of exercise) of one share of the
stock issuable upon such exercise.
-31-
5.6 RIGHTS OF ACTION. Subject to the terms of this agreement, rights
of action in respect of this Agreement, other than rights of action vested
solely in the Rights Agent, are vested in the respective holders of the Rights;
and any holder of any Rights, without the consent of the Rights Agent or of the
holder of any other Rights, may, on such holder's own behalf and for such
holder's own benefit and the benefit of other holders of Rights, enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise such
holder's Rights in the manner provided in such holder's Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
5.7 HOLDER OF RIGHTS NOT DEEMED A STOCKHOLDER. No holder, as such, of
any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised in accordance with the
provisions hereof.
-32-
5.8 NOTICE OF PROPOSED ACTIONS. In case the Company shall propose
after the Separation Time and prior to the Expiration Time (i) to effect or
permit (in cases where the Company's permission is required) occurrence of any
Flip-in Date or Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the Flip-in Date
or the date on which such Flip-over Transaction or Event, liquidation,
dissolution, or winding up is to take place, and such notice shall be so given
at least 20 Business Days prior to the date of the taking of such proposed
action.
5.9 NOTICES. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
First Security Corporation
X.X. Xxx 00000
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
First Chicago Trust Company of New York
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
-33-
Attention: Tenders & Exchange Administration
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
5.10 SUSPENSION OF EXERCISABILITY. To the extent that the Company
determines in good faith that some action need be taken pursuant to Section
3.1(e) or to comply with federal or state securities laws, the Company may
suspend the exercisability of the Rights for a period of up to ninety (90) days
following the date of the occurrence of the Separation Time or the Flip-in Date
in order to take such action or comply with such laws. In the event of any such
suspension, the Company shall issue as promptly as practicable a public
announcement stating that the exercisability of the Rights has been temporarily
suspended.
5.11 COSTS OF ENFORCEMENT. The Company agrees that if the Company or
any other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
5.12 SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
-34-
5.13 BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 DESCRIPTIVE HEADINGS. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.15 GOVERNING LAW. This Agreement and each Right 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.
5.16 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.
5.17 SEVERABILITY. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
-35-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
"COMPANY"
FIRST SECURITY CORPORATION
By /s/ Xxxxxx X. Xxxxx
---------------
Its: President and Chief Operating Officer
"RIGHTS AGENT"
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By /s/ Xxxxxx Xxxxxxxxxx
-----------------
Its: Assistant Vice President
-36-
EXHIBIT A
[Form of Rights Certificate]
Certificate No. _________ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY
EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED
BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR
TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.
Rights Certificate
FIRST SECURITY CORPORATION
This certifies that ___________________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Shareholder Rights Agreement, dated as of
October 27, 1998 (as such may be amended from time to time, the "Rights
Agreement"), between First Security Corporation, a Delaware corporation (the
"Company"), and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent", which term shall include any successor Rights Agent under the
Rights Agreement), to purchase from the Company at any time after the Separation
Time (as such term is defined in the Rights Agreement) and prior to the close of
business on August 28, 2009, one one-thousandth of a fully paid share of Junior
Series B Preferred Stock, no par value per share (the "Junior Preferred Stock"),
of the Company (subject to adjustment as provided in the Rights Agreement) at
the Exercise Price referred to below, upon presentation and surrender of this
Rights Certificate with the Form of Election to Exercise duly executed at the
principal office of the Rights Agent in
X-0
Xxxx Xxxx Xxxx, Xxxx. The Exercise Price shall initially be $85.00 per Right and
shall be subject to adjustment in certain events as provided in the Rights
Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase capital
stock of an entity other than the Company or shares of capital stock of the
Company other than Junior Preferred Stock, all as provided in the Rights
Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances at its option at a redemption price of $0.01 per Right or (b)
exchanged by the Company under certain
A-2
circumstances at its option for one share of Common Stock or one one-thousandth
of a share of Junior Preferred Stock per Right (or, in certain cases, other
securities or assets of the Company), subject in each case to adjustment in
certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of any
securities which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporation 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 Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Date: ______________________
ATTEST: FIRST SECURITY CORPORATION
__________________________ By_____________________________
Secretary
A-3
Countersigned:
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
as Rights Agent
By______________________________
Authorized Signatory
A-4
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificates.)
FOR VALUE RECEIVED _____________________________ hereby sells, assigns
and transfers unto ________________________________________________________
(Please print name
--------------------------------------------------------------------------------
and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ___________________, 19___
Signature Guaranteed: _____________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
A-5
-------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
-------------------------------
Signature
-------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced by such Rights Certificate to be void and not transferable or
exercisable.
A-6
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise the Rights Certificate.)
TO: FIRST SECURITY CORPORATION
The undersigned hereby irrevocably elects to exercise ________________
whole Rights represented by the attached Rights Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of such Rights and requests
that certificates for such shares be issued in the name of:
_________________________________
Address:_________________________
_________________________________
Social Security or Other Taxpayer
Identification Number:___________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
_________________________________
Address:_________________________
_________________________________
Social Security or Other Taxpayer
Identification Number:___________
Dated: __________________, 19___
Signature Guaranteed: _____________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
A-7
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
-------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by the enclosed
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
-------------------------------
Signature
-------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the enclosed Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
A-8
EXHIBIT B
CERTIFICATE OF DESIGNATION, VOTING POWERS, PREFERENCES AND
RIGHTS OF THE SERIES OF THE PREFERRED STOCK
OF FIRST SECURITY CORPORATION
To Be Designated
Junior Series B Preferred Stock
First Security Corporation, a Delaware corporation (the
"Corporation"), acting in accordance with the requirements of Section 151 of the
General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the Corporation, the Board of Directors
of the Corporation at a meeting thereof duly called and held on October 26,
1998, at which a quorum was present and acting throughout, duly adopted the
following resolution creating a series of 380,000 shares of Preferred Stock of
no par value per share each to be designated "Junior Series B Preferred Stock":
RESOLVED, that there is hereby established a series of Junior
Series B Preferred Stock, no par value per share, of the Corporation,
and the designation and certain powers, preferences and other rights
of the shares of such series, and certain qualifications, limitations
and restrictions thereon, are hereby fixed as follows:
(i) The distinctive serial designation of this series shall
be "Junior Series B Preferred Stock" (hereinafter called "this
Series"). Each Share of this Series shall be identical in all
respects with the other shares of this Series except as to the
dates from and after which dividends thereon shall be cumulative.
(ii) The number of shares in this Series shall initially be
380,000, which number may from time to time be increased or
decreased (but not below the number then outstanding) by the
Board of Directors. Shares of this Series purchased by the
Corporation shall be cancelled and shall revert
B-1
to authorized but unissued shares of Preferred Stock undesignated
as to series. Shares of this Series may be issued in fractional
shares, which fractional shares shall entitle the holder, in
proportion to such holders' fractional share, to all rights of a
holder of a whole share of this Series.
(iii) The holders of full or fractional shares of this
Series shall be entitled to receive, when and as declared by the
Board of Directors, but only out of funds legally available
therefor, dividends, (A) on each date that dividends or other
distributions (other than dividends or distributions payable in
Common Stock of the Corporation) are payable on or in respect of
Common Stock comprising part of the Reference Package (as defined
below), in an amount per whole share of this Series equal to the
aggregate amount of dividends or other distributions (other than
dividends or distributions payable in Common Stock of the
Corporation) that would be payable on such date to a holder of
the Reference Package and (B) on the last day of March, June,
September and December in each year, in an amount per whole share
of this Series equal to the excess (if any) of $320.00 over the
aggregate dividends paid per whole share of this Series during
the three month period ending on such last day. Each such
dividend shall be paid to the holders of record of shares of this
Series on the date, not exceeding sixty days preceding such
dividend or distribution payment date, fixed for the purpose by
the Board of Directors in advance of payment of each particular
dividend or distribution. Dividends on each full and each
fractional share of this Series shall be cumulative from the date
such full or fractional share is originally issued; provided that
any such full or fractional share originally issued after a
dividend record date and on or prior to the dividend payment date
to which such record date relates shall not be entitled to
receive the dividend payable on such dividend payment date or any
amount in respect of the period from such original issuance to
such dividend payment date.
The term "Reference Package" shall initially mean 1,000
shares of Common Stock, par value $1.25 per share ("Common
Stock"), of the Corporation. In the event the Corporation shall
at any time after the close of business on ________________,
19___* (A) declare or pay a dividend on any Common Stock payable
in Common Stock, (B) subdivide any Common Stock or (C) combine
any Common Stock into a smaller number of shares, then and in
each such case the Reference Package after such
----------
* For a certificate of designation relating to shares to be issued pursuant to
Section 2.3 of the Rights Agreement, insert the Separation Time. For a
certificate of designation relating to shares to be issued pursuant to Section
3.1(d) of the Rights Agreement, insert the Stock Acquisition Date.
B-2
event shall be the Common Stock that a holder of the Reference
Package immediately prior to such event would hold thereafter as
a result thereof.
Holders of shares of this Series shall not be entitled to
any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends, as herein provided on this
Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other
stock ranking junior to this Series as to dividends and upon
liquidation) shall be declared or paid or set aside for payment
or other distribution declared or made upon the Common Stock or
upon any other stock ranking junior to this Series as to
dividends or upon liquidation, nor shall any Common Stock nor any
other stock of the Corporation ranking junior to or on a parity
with this Series as to dividends or upon liquidation be redeemed,
purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation
(except by conversion into or exchange for stock of the
Corporation ranking junior to this Series, as to dividends and
upon liquidation), unless, in each case, the full cumulative
dividends (including the dividend to be due upon payment of such
dividend, distribution, redemption, purchase or other
acquisition) on all outstanding shares of this Series shall have
been, or shall contemporaneously be, paid.
(iv) In the event of any merger, consolidation,
reclassification or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of this Series shall at the same time be similarly
exchanged or changed in an amount per whole share equal to the
aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, that a holder of
the Reference Package would be entitled to receive as a result of
such transaction.
(v) In the event of any liquidation, dissolution or winding
up of the affairs of the Corporation, whether voluntary or
involuntary, the holders of full and fractional shares of this
Series shall be entitled, before any distribution or payment is
made on any date to the holders of the Common Stock or any other
stock of the Corporation ranking junior to this Series upon
liquidation, to be paid in full an amount per whole share of this
Series equal to the greater of (A) $___________* or (B) the
aggregate amount distributed or to be distributed prior to such
date in connection
----------
* Insert an amount equal to 1000 times the Exercise Price in effect as of the
Separation Time.
B-3
with such liquidation, dissolution or winding up to a holder of
the Reference Package (such greater amount being hereinafter
referred to as the "Liquidation Preference"), together with
accrued dividends to such distribution or payment date, whether
or not earned or declared. If such payment shall have been made
in full to all holders of shares of this Series, the holders of
shares of this Series as such shall have no right or claim to any
of the remaining assets of the Corporation.
This Series shall be subordinate to, and shall be entitled
to a distribution upon liquidation after, all series of Preferred
Stock of the Corporation except for such Series as by its terms
ranks pari passu with, or subordinate to, this Series.
In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any
liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, shall be insufficient to pay in
full all amounts to which such holders are entitled pursuant to
the first paragraph of this Section (v), after giving effect to
the second paragraph of this Section (v), no such distribution
shall be made on account of any shares of any other class or
series of Preferred Stock ranking on a parity with the shares of
this Series upon such liquidation, dissolution or winding up
unless proportionate distributive amounts shall be paid on
account of the shares of this Series, ratably in proportion to
the full distributable amounts for which holders of all such
parity shares are respectively entitled upon such liquidation,
dissolution or winding up.
Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then
outstanding shall be entitled to be paid out of assets of the
Corporation available for distribution to its stockholders all
amounts to which such holders are entitled pursuant to the first
and second paragraphs of this Section (v) before any payment
shall be made to the holders of Common Stock or any other stock
of the Corporation ranking junior upon liquidation to this
Series.
For the purposes of this Section (v), the consolidation or
merger of the Corporation with any other corporation shall not be
deemed to constitute a liquidation, dissolution or winding up of
the Corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of
stockholders required by law or by the Certificate of
Incorporation, as amended, of the Corporation, each whole share
of this Series shall, on any matter, vote as a class with any
other capital stock comprising part of the Reference Package and
voting on such matter and shall have the number of votes thereon
that a holder of the Reference Package would have.
B-4
IN WITNESS WHEREOF, First Security Corporation has caused this
Certificate to be signed by its duly authorized officers this _______ day of
_________, ___________.
FIRST SECURITY CORPORATION
By:______________________________
Name:
Title:
Attest:
--------------------------
B-5
EXHIBIT C
DO NOT DESTROY. ATTACH TO
YOUR FIRST SECURITY
CORPORATION STOCK CERTIFICATE.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On October 26, 1998, the Board of Directors of First Security
Corporation (the "Company") declared a dividend distribution of one Right for
each outstanding share of the Company's Common Stock to shareholders of records
at the close of business on August 28, 1999. Each Right entitles the registered
holder to purchase from the Company a unit consisting of one one-thousandth of a
share (a "Unit") of Junior Series B Preferred Stock, no par value per share (the
"Preferred Stock"), at an Exercise Price of $85.00 per Unit, subject to
adjustment. The description and terms of the Rights are set forth in a
Shareholder Rights Agreement (the "Rights Agreement") between the Company and
First Chicago Trust Company of New York, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common Stock
(and become separately traded) on the close of business on the earlier of (i)
the tenth day after the commencement of a tender offer or exchange offer that
would result in a Person or group (except the Company and its subsidiaries)
beneficially owning 15% or more of such outstanding shares of Common Stock (or
such later date as the Board of Directors may fix by resolution prior to such
tenth day), and (ii) the date of the public announcement by the Company or by a
person or of group of affiliated or associated persons that such Person has
C-1
acquired or obtained the right to acquire beneficial ownership of 15% or more of
the outstanding shares of Common Stock of the Company (an "Acquiring Person"),
or such later date as the Board of Directors may fix by resolution prior to such
date (the earlier to occur of (i) or (ii) is hereinafter referred to as the
"Separation Time"). Until the Separation Time, (i) no right may be exercised and
(ii) the Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates. New Common Stock
certificates issued after August 28, 1999 will contain a notation incorporating
the Rights Agreement by reference. Common Stock certificates outstanding on
August 28, 1999 need not be surrendered or altered and will be deemed to
represent the interest in the number of Rights without further action.
The Rights will expire at the close of business on August 28, 2009
(the "Expiration Time"), unless earlier redeemed by the Company as described
below.
As soon as practicable after the Separation Time, Rights Certificates
will be mailed to holders of record of the Common Stock as of the Separation
Time and, thereafter, the separate Rights Certificates alone will represent the
Rights.
In the event that prior to the Expiration Time a person or
group of persons becomes an Acquiring Person (the beneficial owner of more than
15% of the then-outstanding shares of Common Stock of the Company), and PROVIDED
THAT applicable law permits the Rights of such Acquiring Person to become null
and void pursuant to the provisions of the Rights Agreement, then each holder of
a Right, except such Acquiring Person or its Affiliates or successors, will
thereafter have the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of the Company) having
a market value equal to two times the Exercise Price of the Right or, at the
option of the Board of Directors of the
C-2
Company by resolution adopted prior to the time an Acquiring Person becomes the
Beneficial Owner of 50% or more of the outstanding Common Stock of the Company,
all Rights (except the Rights held by the Acquiring Person) will be exchanged on
the basis of one share of Common Stock of the Company for each Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void.
For example, at an exercise price of $100.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase
$200.00 worth of Common Stock (or other consideration, as noted above) for
$100.00. Assuming that the Common Stock had a per share value of $50.00 at such
time, the holder of each valid Right would be entitled to purchase four shares
of Common Stock for $100.00. Or, if the Board of Directors so elects, as
described above, each Right (not owned by an Acquiring Person or certain related
parties) would be exchanged for one share of Common Stock of the Company without
additional consideration being paid.
Prior to the Expiration Time, the Company is prohibited from entering
into any agreement with an Acquiring Person which will result in (i) the Company
being acquired in a merger or other business combination transaction whether the
Company is merged into such Acquiring Person (or person acting with the
Acquiring Person) or the Acquiring Person (or person acting with the Acquiring
Person) is merged into the Company, or (ii) 50% or more of the Company's (or a
Subsidiary of the Company's) assets or earning power being sold or transferred
to an Acquiring Person (or person acting with the Acquiring Person).
C-3
Prior to the Expiration Time, unless the Rights will be redeemed in
the manner provided in the Rights Agreement, the Company is prohibited from
entering into any agreement which will cause the Company to be a participant in
a transaction described in items (i) through (iv) of the preceding paragraph, if
there are agreements or rights which, if such transactions were consummated,
would eliminate or otherwise diminish the benefits intended by the Rights
Agreement to holders of Rights.
The Exercise Price and the number of Rights are subject to adjustment
from time to time to prevent dilution in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Stock of the
Company, pursuant to a formula adjustment set forth in the Rights Agreement.
(Said formula will maintain the proportionality of the Exercise Price and the
number of Rights after such corporate action.) Further, if the Company issues or
distributes any securities or assets in exchange for Common Stock, whether by
dividend, reclassification or recapitalization, the Board of Directors, in its
discretion, may make such adjustments in the Exercise Price and the number of
Rights as the Board deems appropriate.
At any time prior to the date on which a person or group becomes the
beneficial owner of 15% or more of the outstanding Common Stock of the Company
(or a later date as determined by resolution of the Board of Directors), the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (as may be adjusted by changes to the Exercise 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 $.01 redemption price in cash.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive
C-4
dividends. While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
The Rights Agreement may be amended at any time to cure any ambiguity
or to correct or supplement any provision which may be inconsistent with other
provisions or otherwise defective. Any of the provisions of the Rights Agreement
may be amended by the Board of Directors of the Company prior to the date on
which an Acquiring Person announces that such Person has acquired beneficial
ownership of 15% or more of the Common Stock of the Company, or such later date
not more than thirty days after such date, as the Board of Directors may
determine (the "Flip-in Date"). After the close of business on the Flip-in Date,
the provisions of the Rights Agreement may be amended by the Board of Directors
to make changes that are deemed necessary and desirable, but which do not
adversely affect the interests of holders of Rights generally.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
____________, 1999. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
C-5
