EXHIBIT 4.3
RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of _____________, 2001 (this "Agreement"),
is made and entered into by and between Equifax PS, Inc., a Georgia corporation
(the "Company"), and SunTrust Bank, Atlanta, a Georgia banking corporation (the
"Rights Agent").
RECITALS
WHEREAS, on ___________, 2001, the Board of Directors of the Company
authorized and declared a dividend distribution of one right ("Right") for each
share of Common Stock, par value $.01 per share, of the Company (a "Common
Share") outstanding as of the Close of Business (as hereinafter defined) on
___________, 2001 (the "Record Date"), each Right initially representing the
right to purchase one Common Share, upon the terms and subject to the conditions
herein set forth, and further authorized and directed the issuance of one Right
with respect to each Common Share issued or delivered by the Company (whether
originally issued or delivered from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date (as hereinafter defined)
and the Expiration Date (as hereinafter defined).
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than the Company or any
Subsidiary of the Company or any employee benefit or stock ownership plan of the
Company or of any Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms of any such plan or, prior to the Spinoff Date,
Equifax Inc. or any of its Affiliates or Associates) who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the Common Shares then outstanding; provided, however, that a
Person shall not be deemed to have become an Acquiring Person solely as a result
of a reduction in the number of Common Shares outstanding or solely as a result
of any acquisition that is approved in advance by the Board of Directors of the
Company, in each case unless and until such time as (i) such Person or any
Affiliate or Associate of such Person shall thereafter become the Beneficial
Owner of any additional Common Shares, other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in which
all holders of Common Shares are treated equally or in a transaction that is
approved in advance by the Board of Directors, or (ii) any other Person who is
the Beneficial Owner of any Common Shares shall thereafter become an Affiliate
or Associate of such Person. Notwithstanding the foregoing, if the Board of
Directors determines in good faith that a Person who otherwise would be an
Acquiring Person as defined under the foregoing provisions of this Section 1(a)
has become such inadvertently, and such Person has divested or agrees to divest
as promptly as practicable (as determined by the Board of Directors of the
Company) a sufficient number of Common Shares so that such Person would no
longer be an Acquiring Person as defined under the foregoing provisions, then
such Person shall not be deemed an Acquiring Person for any purposes of this
Agreement unless and until such Person shall again become an Acquiring Person as
herein defined.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement.
(c) A Person shall be deemed the Beneficial Owner of, and to "beneficially
own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing), or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise (in each
case, other than upon exercise or exchange of the Rights); provided,
however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of, including pursuant to any agreement, arrangement or understanding
(whether or not in writing); or
(iii) of which any other Person is the Beneficial Owner, if such
Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing)
with such other Person (or any of such other Person's Affiliates or
Associates) with respect to acquiring, holding, voting or disposing of
any securities of the Company; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any
security (A) if such Person has the right to vote such security
pursuant to an agreement, arrangement or understanding (whether or not
in writing) which (1) arises solely from a revocable proxy given to
such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report), or (B) if such beneficial ownership arises solely as a result
of such Person's status as a "clearing agency", as defined in Section
3(a)(23) of the Exchange Act; and provided, further, that nothing in
this paragraph (c) shall cause a Person engaged in business as an
underwriter of securities to be the Beneficial Owner of, or to
beneficially own, any securities acquired through such Person's
participation in good faith in an underwriting syndicate until the
expiration of 40 calendar days after the date of such acquisition, or
such later date as the Board of Directors of the Company may determine
in any specific case.
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(d) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Georgia (or such other state
in which the principal office of the Rights Agent is located) are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., Eastern
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., Eastern time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean the
Common Stock, par value $.01 per share, of the Company; provided, however, that,
if the Company is the continuing or surviving corporation in a transaction
described in Section 11(a)(ii) or Section 13(a)(ii) hereof, "Common Shares" when
used with reference to the Company shall mean the capital stock or equity
security with the greatest aggregate voting power of the Company. Common Shares
when used with reference to any corporation or other legal entity, other than
the Company, including an Issuer, shall mean the capital stock or equity
security with the greatest aggregate voting power of such corporation or other
legal entity.
(g) "Company" shall mean Equifax PS, Inc., a Georgia corporation.
(h) "Distribution Date" shall mean the earliest of: (i) the Close of
Business on the tenth calendar day (or, unless the Distribution Date shall have
previously occurred, such later date as may be specified by the Board of
Directors of the Company) after the Share Acquisition Date, (ii) the Close of
Business on the tenth Business Day (or, unless the Distribution Date shall have
previously occurred, such later date as may be specified by the Board of
Directors of the Company) after the date of the commencement of a tender or
exchange offer by any Person (other than the Company or any Subsidiary of the
Company or any employee benefit or stock ownership plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan), if upon the consummation thereof such Person would
be the Beneficial Owner of 15% or more of the outstanding Common Shares, and
(iii) the Close of Business on the tenth calendar day after the first date of
public announcement by the Company or an Acquiring Person (by press release,
filing made with the Securities and Exchange Commission or otherwise) of the
first occurrence of a Triggering Event; provided, however, that if the earliest
of such dates would otherwise occur prior to the Record Date, the Distribution
Date shall mean the Close of Business on the Record Date.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Expiration Date" shall mean the earliest of (i) the Close of Business
on the Final Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof, and (iii) the time at which all exercisable
Rights are exchanged as provided in Section 27 hereof.
(k) "Final Expiration Date" shall mean the tenth anniversary of the Record
Date.
(l) "Flip-in Event" shall mean any event described in clauses (A) (B) or
(C) of Section 11(a)(ii) hereof.
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(m) "Flip-over Event" shall mean any event described in subsections (i),
(ii), (iii) or (iv) of Section 13(a) hereof.
(n) "Issuer" shall have the meaning set forth in Section 13(b) hereof.
(o) "NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotation System.
(p) "NYSE" shall mean the New York Stock Exchange, Inc.
(q) "Person" shall mean any individual, firm, corporation, partnership or
other legal entity, and shall include any successor (by merger or otherwise) of
such entity.
(r) "Purchase Price" shall mean initially [$___] per Common Share, and
shall be subject to further adjustment from time to time as provided in this
Agreement.
(s) "Redemption Price" shall mean $0.01 per Right, subject to adjustment by
resolution of the Board of Directors of the Company to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof.
(t) "Right" shall have the meaning set forth in the Recitals to this
Agreement.
(u) "Right Certificates" shall mean certificates evidencing the Rights, in
substantially the form of Exhibit A attached hereto.
(v) "Rights Agent" shall mean SunTrust Bank, Atlanta, unless and until a
successor Rights Agent shall have become such pursuant to the terms of this
Agreement, and thereafter, "Rights Agent" shall mean such successor Rights
Agent.
(w) "Securities Act" shall mean the Securities Act of 1933, as amended.
(x) "Share Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person (by press release, filing
made with the Securities and Exchange Commission or otherwise) that an Acquiring
Person has become such.
(y) "Spinoff Date" shall mean the time at which Equifax Inc. shall
distribute all of the Common Shares of the Company it owns to its shareholders
pursuant to the Distribution Agreement, Plan of Reorganization and Distribution
dated as of _____ __, 2001, as amended or supplemented from time to time.
(z) "Subsidiary" when used with reference to any Person shall mean any
corporation or other legal entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly or indirectly,
by such Person; provided, however, that for purposes of Section 13(b) hereof,
Subsidiary when used with reference to any Person shall mean
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any corporation or other legal entity of which at least 20% of the voting power
of the voting equity securities or equity interests is owned, directly or
indirectly, by such Person.
(aa) "Summary of Rights" shall mean the Summary of Rights to Purchase
Common Shares, in substantially the form of Exhibit B attached hereto.
(bb) "Trading Day" shall mean any day on which the principal national
securities exchange on which the Common Shares are listed or admitted to trading
is open for the transaction of business or, if the Common Shares are not listed
or admitted to trading on any national securities exchange, a Business Day.
(cc) "Triggering Event" shall mean any Flip-in Event or Flip-over Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall also be, prior to the Distribution
Date, the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment and
hereby certifies that it complies with the requirements of the NYSE governing
transfer agents and registrars. The Company may from time to time act as Co-
Rights Agent or appoint such Co-Rights Agents as it may deem necessary or
desirable. Any actions which may be taken by the Rights Agent pursuant to the
terms of this Agreement may be taken by any such Co-Rights Agent. To the extent
that any Co-Rights Agent takes any action pursuant to this Agreement, such Co-
Rights Agent shall be entitled to all of the rights and protections of and
subject to all of the applicable duties and obligations imposed upon, the Rights
Agent pursuant to the terms of this Agreement.
Section 3. Issue of Right Certificates.
(a) Until the Distribution Date, (i) the Rights shall be evidence by the
certificates representing Common Shares registered in the names of the record
holders thereof (which certificates representing Common Shares shall also be
deemed to be Right Certificates), together with a copy of the Summary of Rights,
(ii) the Rights shall be transferable only in connection with the transfer of
the underlying Common Shares, and (iii) the surrender for transfer of any
certificates evidencing Common Shares in respect of which Rights have been
issued, with or without a copy of the Summary of Rights, shall also constitute
the transfer of the Rights associated with the Common Shares evidenced by such
certificates.
(b) As promptly as practicable after the Record Date, the Company shall
send a copy of the Summary of Rights by first-class, postage prepaid mail, to
each record holder of Common Shares as of the close of business on the Record
Date, at the address of such holder shown on the records of the Company as of
such date.
(c) Rights shall be issued by the Company in respect of all Common Shares
(other than Common Shares issued upon the exercise or exchange of any Right)
issued or delivered by the Company (whether originally issued or
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delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares shall have stamped on, impressed on, printed on,
written on or otherwise affixed to them the following legend or such similar
legend as the Company may deem appropriate and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or transaction reporting system on
which the Common Shares may from time to time be listed or quoted, or to conform
to usage:
This Certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Equifax PS, Inc.
and SunTrust Bank, Atlanta, dated as of ___________, 2001 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of Equifax PS, Inc. Under certain circumstances, as set forth in
the Rights Agreement, such Rights may be redeemed, may expire, may be
amended or may be evidenced by separate certificates and no longer be
evidenced by this Certificate. Equifax PS, Inc. will mail to the holder of
this Certificate a copy of the Rights Agreement without charge promptly
after receipt of a written request therefor. Under certain circumstances
as set forth in the Rights Agreement, Rights beneficially owned by an
Acquiring Person or any Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement) may become null and void.
(d) As promptly as practicable after the Distribution Date, the Company
shall prepare and execute, the Rights Agent will countersign and the Company
shall send or cause to be sent (and the Rights Agent shall, if requested, send),
by first-class, insured, postage prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate, evidencing
one Right for each Common Share so held, subject to adjustment. As of and after
the Distribution Date, the Rights shall be evidenced solely by such Right
Certificates.
Section 4. Form of Right Certificates. (a) The Right Certificates (and
the form of election to purchase and form of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth as Exhibit A
hereto with such changes, marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or transaction reporting system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the provisions of
Section 22 hereof, the Right Certificates, whenever issued, on their face shall
entitle the holders thereof to purchase such number of Common Shares as shall be
set forth therein at the Purchase Price set forth therein, but the Purchase
Price, the number and kind of securities
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issuable upon exercise of each Right and the number of Rights outstanding shall
be subject to adjustment as provided herein.
(b) Any Rights Certificate issued hereunder that represents Rights
beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or an any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (b) a transfer that the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
that has the primary purpose or effect the avoidance of Section 7(d) hereof, and
any Right Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Right Certificate are or were beneficially
owned by Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Right Certificate and the Rights represented
hereby may become null and void in the circumstances specified in the Rights
Agreement.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board, President or any Vice President, either manually or
by facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent, and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent shall keep or cause
to be kept, at the principal office of the Rights Agent designated for such
purpose and at
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such other offices as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange or any transaction reporting system on which the Rights may
from time to time be listed or quoted, books for registration and transfer of
the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(d) and 14 hereof, at any time
after the Close of Business on the Distribution Date and prior to the Expiration
Date, any Right Certificate or Right Certificates representing exercisable
Rights may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of Common Shares (or other securities, as the case may be) as the
Right Certificate or Right Certificates surrendered then entitled such holder
(or former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent designated for
such purpose. Thereupon or as promptly as practicable thereafter, subject to the
provisions of Sections 7(d) and 14 hereof, the Company shall prepare, execute
and deliver to the Rights Agent, and the Rights Agent shall countersign and
deliver a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and of indemnity or security reasonably satisfactory to
them, and reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company shall prepare,
execute and deliver a new Right Certificate of like tenor to the Rights Agent
and the Rights Agent shall countersign and deliver such new Right Certificate to
the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date and prior to the Expiration Date, upon
surrender of the Right Certificate, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the office or offices
of the Rights Agent designated for
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such purpose, together with payment in cash, in lawful money of the United
States of America by certified check or bank draft payable to the order of the
Company equal to the sum of (i) the aggregate Purchase Price for the total
number of securities as to which such surrendered Rights are exercised and (ii)
an amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with the provisions of Section 9 hereof.
In lieu of the cash payment referred to in the immediately preceding sentence,
following the occurrence of a Triggering Event, the registered holder of a Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part upon surrender of the Right Certificate as
described above together with an election to exercise such Rights without
payment of cash on the reverse side thereof duly completed. With respect to any
Rights as to which such an election is made, the holder shall receive a number
of Common Shares or other securities having a value equal to the difference
between (x) the value of the Common Shares or other securities that would have
been issuable upon payment of the cash amount as described above, and (y) the
sum of items (i) and (ii) above. For purposes of this Section 7(a), the value of
any Common Share or other security shall be the current per share market price
of a Common Share (determined pursuant to Section 11(d) hereof) on the Trading
Day immediately preceding the date of the first occurrence of a Triggering
Event.
(b) Upon receipt of a Right Certificate representing exercisable Rights
with the form of election to purchase duly executed, accompanied by either
payment as described in Section 7(a) above or a duly completed election to
exercise without payment of cash, the Rights Agent shall promptly (i)
requisition from any transfer agent of the Common Shares (or make available, if
the Rights Agent is the transfer agent) certificates representing the number of
Common Shares to be purchased (and the Company hereby irrevocably authorizes and
directs its transfer agent to comply with all such requests), (ii) after receipt
of such certificates, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, (iii) when appropriate, requisition from the
Company or any transfer agent therefor (or make available, if the Rights Agent
is the transfer agent) certificates representing the number of equivalent common
shares to be issued in lieu of the issuance of Common Shares in accordance with
the provisions of Section 11(a)(iii) hereof, (iv) when appropriate, after
receipt of such certificates, cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, (v) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of the
issuance of fractional shares in accordance with the provisions of Section 14
hereof or in lieu of the issuance of Common Shares in accordance with the
provisions of Section 11(a)(iii) hereof, (vi) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such Right
Certificate, and (vii) when appropriate, deliver any due xxxx or other
instrument provided to the Rights Agent by the Company for delivery to the
registered holder of such Right Certificate as provided by Section 11(1) hereof.
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(c) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, the Company shall prepare, execute
and deliver a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised and the Rights Agent shall countersign and deliver such
new Right Certificate to the registered holder of such Right Certificate or to
his duly authorized assigns, subject to the provisions of Section 14 hereof.
(d) Notwithstanding anything in this Agreement to the contrary, from and
after the later of the Distribution Date and the first occurrence of a
Triggering Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transfer of Rights, or (B) a transfer
that the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 7(d), shall become null and void without any further
action, no holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or otherwise, and
any Right Certificate delivered to the Rights Agent for transfer to an Acquiring
Person or any Affiliate or Associate thereof shall be cancelled. The Company
shall use all reasonable efforts to ensure that the provisions of this Section
7(d) and Section 4(b) hereof are complied with, but shall have no liability to
any holder of Rights Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(e) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to any purported transfer, split up, combination or exchange of any
Right Certificate pursuant to Section 6 hereof or exercise of a Right
Certificate as set forth in this Section 7 unless the registered holder of such
Right Certificate shall have (i) completed and signed the certificate following
the form of assignment or form of election to purchase, as applicable, set forth
on the reverse side of the Right Certificate surrendered for such transfer,
split up, combination, exchange or exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall have reasonably requested.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
stock transfer agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by this Agreement. The Company shall deliver to
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the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Company Covenants Concerning Securities and Rights. The Company
covenants and agrees that:
(a) So long as the Common Shares issuable upon the exercise of the Rights
may be listed on a national securities exchange, it shall endeavor to cause,
from and after such time as the Rights become exercisable, all securities
reserved for issuance upon the exercise of Rights to be listed on such exchange
upon official notice of issuance.
(b) It shall take all such action as may be necessary to ensure that all
Common Shares and/or other securities delivered upon exercise of Rights, at the
time of delivery of the certificates for such securities shall be (subject to
payment of the Purchase Price) duly and validly authorized and issued, fully
paid and nonassessable securities.
(c) It shall pay when due and payable any and all federal and state
transfer taxes and charges that may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates representing
securities issued upon the exercise of Rights; provided, however, that the
Company shall not be required to pay any transfer tax or charge which may be
payable in respect of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates representing securities
issued upon the exercise of Rights in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise, or
to issue or deliver any certificates representing securities issued upon the
exercise of any Rights until any such tax or charge shall have been paid (any
such tax or charge being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
(d) It shall use its best efforts (i) to file on an appropriate form, as
soon as practicable following the later of the first occurrence of a Triggering
Event or the Distribution Date, a registration statement under the Securities
Act with respect to the securities issuable upon exercise of the Rights, (ii) to
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company shall
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time after the date set forth in clause (i) of the first sentence of this
Section 9(d), the exercisability of the Rights in order to prepare and file such
registration statement and to permit it to become
11
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company shall determine that a
registration statement should be filed under the Securities Act or any state
securities laws following the Distribution Date, the Company may temporarily
suspend the exercisability of the Rights in each relevant jurisdiction until
such time as a registration statement has been declared effective and, upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding anything in this Agreement to the contrary, the Rights shall not
be exercisable in any jurisdiction if the requisite registration or
qualification in such jurisdiction shall not have been effected or the exercise
of the Rights shall not be permitted under applicable law.
(e) Notwithstanding anything in this Agreement to the contrary, after the
Distribution Date it shall not, except as permitted by Section 23, 26 or 27
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will eliminate or
otherwise diminish the benefits intended to be afforded by the Rights.
(f) In the event that the Company is obligated to issue other securities of
the Company and/or pay cash pursuant to Section 11, 13 or 14 hereof, it shall
make all arrangements necessary so that such other securities and/or cash are
available for distribution by the Rights Agent, if and when appropriate.
Section 10. Record Date. Each Person in whose name any certificate
representing Common Shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Common Shares transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such securities on, and such
certificate shall be dated, the next succeeding Business Day on which the Common
Shares transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a shareholder of the Company with respect to
securities for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Securities or
Number of Rights. The Purchase Price, the number and kind of securities issuable
upon exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
12
(a) (i) In the event that the Company shall at any time after the date of
this Agreement (A) effect a dividend on the Common Shares payable in Common
Shares, (B) subdivide the outstanding Common Shares, (C) combine the outstanding
Common Shares into a smaller number of shares or (D) issue any shares of its
capital stock in a reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), the Purchase Price in
effect at the time of the record date for such dividend or on the effective date
of such subdivision, combination or reclassification, and/or the number and/or
kind of shares of capital stock issuable on such date upon exercise of a Right,
shall be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive upon payment of the Purchase Price
then in effect the aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such date and at a time
when the Common Shares transfer books of the Company were open, the holder of
such Right would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof or Section 13 hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) or Section 13 hereof.
(ii) Subject to the provisions of Section 23, 26 or 27 hereof,
in the event that:
(A) any Acquiring Person or any Affiliate or Associate of any
Acquiring Person, at any time after the date of this Agreement, directly or
indirectly, shall (1) merge into the Company or otherwise combine with the
Company and the Company shall be the continuing or surviving corporation of
such merger or combination (other than in a transaction subject to Section
13 hereof), (2) merge or otherwise combine with any Subsidiary of the
Company, (3) in one or more transactions (other than in connection with the
exercise or exchange of Rights or the exercise or conversion of securities
exercisable for or convertible into shares of any class of capital stock of
the Company or any of its Subsidiaries) transfer any assets to the Company
or any of its Subsidiaries in exchange (in whole or in part) for shares of
any class of capital stock of the Company or any of its Subsidiaries or for
securities exercisable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries, or otherwise
obtain from the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital stock of the
Company or any of its Subsidiaries or securities exercisable for or
convertible into shares of any class of capital stock of the Company or any
of its Subsidiaries (other than as part of a pro rata distribution to all
holders of such shares of any class of capital stock of the Company, or any
of its Subsidiaries), (4) sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise dispose (in one or more transactions), to,
from, with or of, as the case may be, the Company or any of its
Subsidiaries (other than in a transaction subject to Section 13 hereof ),
assets, including securities, on terms and conditions less favorable to the
Company than
13
the Company would be able to obtain in arm's-length negotiation with an
unaffiliated third party, (5) receive any compensation from the Company or
any of its Subsidiaries other than compensation as a director or for full-
time employment as a regular employee, in either case, at rates in
accordance with the Company's (or its Subsidiaries') past practices, or (6)
receive the benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantage provided by
the Company or any of its Subsidiaries; or
(B) during such time as there is an Acquiring Person, there shall
be any reclassification of securities (including any reverse stock split),
or recapitalization of the Company, or any merger or consolidation of the
Company with any of its Subsidiaries or any other transaction or series of
transactions involving the Company or any of its Subsidiaries (whether or
not with or into or otherwise involving an Acquiring Person), other than a
transaction subject to Section 13 hereof, which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity securities or of securities
exercisable for or convertible into equity securities of the Company or any
of its Subsidiaries of which an Acquiring Person or any Affiliate or
Associate of any Acquiring Person, is the Beneficial Owner; or
(C) any Acquiring Person shall at any time after the date of this
Agreement, become the Beneficial Owner of 20% or more of the Common Shares
then outstanding (other than pursuant to any transaction set forth in
Section 13(a) hereof); provided, however, that a Person shall not be deemed
to have become the Beneficial Owner of 20% or more of the Common Shares
then outstanding for the purposes of this Section 11(a)(ii)(C) solely as a
result of a reduction in the number of Common Shares outstanding or solely
as a result of any acquisition that is approved in advance by the Board of
Directors of the Company, in each case unless and until such time as (1)
such Person or any Affiliate or Associate of such Person shall thereafter
become the Beneficial Owner of any additional Common Shares, other than as
a result of a stock dividend, stock split or similar transaction effected
by the Company in which all holders of Common Shares are treated equally or
in a transaction that is approved in advance by the Board of Directors, or
(2) any other Person who is the Beneficial Owner of any Common Shares shall
thereafter become an Affiliate or Associate of such Person; then, and in
each such case, proper provision shall be made so that each holder of a
Right, except as provided below, shall thereafter have a right to receive,
upon exercise thereof in accordance with the terms of this Agreement at an
exercise price per Right equal to the product of the then-current Purchase
Price multiplied by the number of Common Shares for which a Right was
exercisable immediately prior to the first occurrence of a Triggering
Event, such number of Common Shares as shall equal the result obtained by
(x) multiplying the then-current Purchase Price by the number of Common
Shares for which a Right was exercisable immediately prior to the first
occurrence of a Triggering Event, and dividing that product by (y) 50%
14
of the current per share market price of the Common Shares (determined
pursuant to Section 11(d) hereof) on the date of the first occurrence of a
Triggering Event.
(iii) Upon the occurrence of the Distribution Date or a Flip-in
Event, if there shall not be sufficient Common Shares authorized but
unissued or issued but not outstanding to permit the issuance of all the
Common Shares issuable in accordance with the provisions hereof upon the
exercise of a Right, the Board of Directors of the Company shall use its
best efforts promptly to authorize and, subject to the provisions of
Section 9(d) hereof, make available for issuance additional Common Shares
or other equity securities of the Company having equivalent voting rights
and an equivalent value (as determined in good faith by the Board of
Directors of the Company) to the Common Shares (for purposes of this
Section 11(a)(iii), "equivalent common shares"). In the event that
equivalent common shares are so authorized, upon the exercise of a Right in
accordance with the provisions of Section 7 hereof, the registered holder
shall be entitled to receive (A) Common Shares, to the extent any are
available and (B) a number of equivalent common shares, which the Board of
Directors of the Company shall have determined in good faith to have a
value equivalent to the excess of (x) the aggregate current per share
market value of all the Common Shares issuable in accordance with
subsection (ii) hereof upon the exercise of a Right (the "Exercise Value")
over (y) the aggregate current per share market value of any Common Shares
available for issuance upon the exercise of such Right; provided, however,
that if at any time after 90 calendar days after the first occurrence of a
Flip-in Event, there shall not be sufficient Common Shares and/or
equivalent common shares available for issuance upon the exercise of a
Right, then the Company shall be obligated to deliver, upon the surrender
of such Right and without requiring payment of the Purchase Price, Common
Shares (to the extent available), equivalent common shares (to the extent
available) and then cash (to the extent permitted by applicable law and any
agreements or instruments to which the Company is a party in effect
immediately prior to the first occurrence of any Flip-in Event), which
securities and cash shall have an aggregate value equal to the excess of
(1) the Exercise Value over (2) the product of the then-current Purchase
Price multiplied by the number of Common Shares for which a Right was
exercisable immediately prior to the first occurrence of a Triggering
Event. To the extent that any legal or contractual restrictions prevent the
Company from paying the full amount of cash payable in accordance with the
foregoing sentence, the Company shall pay to holders of the Rights as to
which such payments are being made all amounts which are not then
restricted on a pro rata basis and shall continue to make payments on a pro
rata basis as funds become available until the full amount due to each such
Rights holder has been paid.
(b) In the event that the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Common Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Shares (or securities having equivalent rights,
privileges and preferences as the Common Shares (for purposes of this Section
11(b), "equivalent common shares")) or securities convertible into Common Shares
or equivalent common shares at a price per Common Share or equivalent common
share (or having a conversion price per share, if a security convertible into
Common Shares or equivalent common shares) less than the current per share
market price of the Common
15
Shares (determined pursuant to Section 11(d) hereof) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares and/or equivalent
common shares so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such current per
share market price and the denominator of which shall be the number of Common
Shares outstanding on such record date plus the number of additional Common
Shares and/or equivalent common shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Common Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In the event that the Company shall fix a record date for the making of
a distribution to all holders of Common Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend), assets, stock (other than a dividend
payable in Common Shares) or subscription rights, options or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the current per share market price of the Common Shares (as
determined pursuant to Section 11(d) hereof) on such record date or, if earlier,
the date on which Common Shares begin to trade on an ex-dividend or when-issued
basis for such distribution, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
evidences of indebtedness, cash, assets or stock so to be distributed or of such
subscription rights, options or warrants applicable to one Common Share, and the
denominator of which shall be such current per share market price of the Common
Shares. Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per share
market price" of Common Shares on any date shall be deemed to be the average of
the daily closing prices per share of such Common Shares for the 30 consecutive
Trading Days immediately prior to such date; provided, however, that in the
event that the current per share market price of the Common Shares is determined
during a period following the announcement by the issuer of such Common Shares
of (i) a dividend or distribution on such Common Shares payable in such Common
Shares or securities convertible into such Common Shares (other than the Rights)
or
16
(ii) any subdivision, combination or reclassification of such Common Shares, and
prior to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to take into account ex-dividend trading
or to reflect the current per share market price per Common Share equivalent.
The closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE or, if the Common Shares are not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Common Shares are listed or admitted
to trading or, if the Common Shares are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use, or, if on any such date the
Common Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Shares selected by the Board of Directors of the Company.
If the Common Shares are not publicly held or not so listed or traded, or not
the subject of available bid and asked quotes, "current per share market price"
shall mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent.
(e) Except as set forth below, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in such price; provided, however, that any adjustments which by reason
of this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one ten
thousandth of a Common Share or other security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment and (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any securities of the Company other than Common Shares, thereafter the number of
such other securities so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Shares contained in
this Section 11, and the provisions of Sections 7, 9, 10 and 13 hereof with
respect to the Common Shares shall apply on like terms to any such other
securities.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares issuable
from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
17
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) and Section 11(c) hereof made with
respect to a distribution of subscription rights, options or warrants applicable
to Common Shares, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of Common Shares (calculated to the nearest one-
thousandth of a Common Share) obtained by (i) multiplying (x) the number of
Common Shares issuable upon exercise of a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect, on or after the date of any adjustment of the
Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of Common Shares issuable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of Common Shares for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least 10 calendar days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to the provisions of Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Right Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number or kind of securities issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number and kind of securities which were expressed in the
initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Common Shares or other
securities issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of
18
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Common Shares or such other securities at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the number
of Common Shares or other securities of the Company, if any, issuable upon such
exercise over and above the number of Common Shares or other securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due xxxx or other appropriate instrument evidencing
such holder's right to receive such additional Common Shares or other securities
upon the occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Agreement to the contrary, the Company
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent
that in its good faith judgment the Board of Directors of the Company shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Common Shares, (ii) issuance wholly for cash of Common Shares at less than
the current per share market price therefor, (iii) issuance wholly for cash of
Common Shares or securities which by their terms are convertible into or
exchangeable for Common Shares, (iv) stock dividends, or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Common Shares shall not be taxable to such
shareholders.
Section 12. Certificate of Adjusted Purchase Price or Number of Securities.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares a copy of such certificate, and (c) if such adjustment is made after the
Distribution Date, mail a brief summary of such adjustment to each holder of a
Right Certificate in accordance with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, following the Share Acquisition Date, directly
or indirectly:
(i) the Company shall consolidate with, or merge with or into,
any other Person and the Company shall not be the continuing or
surviving corporation of such consolidation or merger; or
(ii) any Person shall consolidate with the Company, or merge with
or into the Company and the Company shall be the continuing or
surviving corporation of such merger or consolidation and, in
connection with such merger or consolidation, all or part of the
Common Shares shall be changed into or
19
exchanged for stock or other securities of any other Person or cash or
any other property; or
(iii) the Company shall be a party to any statutory share
exchange with any other Person; or
(iv) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power (including, without limitation,
securities creating any obligation on the part of the Company and/or
any of its Subsidiaries) representing in the aggregate more than 50%
of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons; then, and in each such
case, proper provision shall be made so that (A) each holder of a
Right (except as otherwise provided herein) shall thereafter have the
right to receive, upon the exercise thereof in accordance with the
terms of this Agreement at an exercise price per Right equal to the
product of the then-current Purchase Price multiplied by the number of
Common Shares for which a Right was exercisable immediately prior to
the first occurrence of a Triggering Event, such number of validly
authorized and issued, fully paid, nonassessable and freely tradable
Common Shares of the Issuer, free and clear of any liens, encumbrances
and other adverse claims and not subject to any rights of call or
first refusal, as shall be equal to the result obtained by (x)
multiplying the then-current Purchase Price by the number of Common
Shares for which a Right is exercisable immediately prior to the first
occurrence of a Triggering Event and dividing that product by (y) 50%
of the current per share market price of the Common Shares of the
Issuer (determined pursuant to Section 11(d) hereof), on the date of
consummation of such Flip-over Event; (B) the Issuer shall thereafter
be liable for, and shall assume, by virtue of the consummation of such
Flip-over Event, all the obligations and duties of the Company
pursuant to this Agreement; (C) the term "Company" shall thereafter be
deemed to refer to the Issuer; and (D) the Issuer shall take such
steps (including, without limitation, the reservation of a sufficient
number of its Common Shares to permit the exercise of all outstanding
Rights) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be possible, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) For purposes of this Section 13, "Issuer" shall mean (i) in the
case of any Flip-over Event described in Sections 13(a)(i) or (ii) above, the
Person that is the continuing, surviving, resulting or acquiring Person
(including the Company as the continuing or surviving corporation of a
transaction described in Section 13(a)(ii) above), (ii) in the case of any Flip-
over Event described in Section 13(a)(iii) above, the Person acquiring the
securities of the shareholders of the Company in such exchange and (iii) in the
case of any Flip-over Event described in Section 13(a)(iv) above, the Person
that is the party receiving the greatest portion of the assets or earning power
(including, without limitation, securities creating any obligation on the part
of the Company and/or any of its Subsidiaries) transferred pursuant to such
transaction or transactions; provided, however,
20
that, in any such case, (A) if (1) no class of equity security of such Person
is, at the time of such merger, consolidation or transaction and has been
continuously over the preceding 12-month period, registered pursuant to Section
12 of the Exchange Act, and (2) such Person is a Subsidiary, directly or
indirectly, of another Person, a class of equity security of which is and has
been so registered, the term "Issuer" shall mean such other Person; and (B) in
case such Person is a Subsidiary, directly or indirectly, of more than one
Person, a class of equity security of two or more of which are and have been so
registered, the term Issuer shall mean whichever of such Persons is the issuer
of the equity security having the greatest aggregate market value.
Notwithstanding the foregoing, if the Issuer in any of the Flip-over Events
listed above is not a corporation or other legal entity having outstanding
equity securities, then, and in each such case, (x) if the Issuer is directly or
indirectly wholly owned by a corporation or other legal entity having
outstanding equity securities, then all references to Common Shares of the
Issuer shall be deemed to be references to the Common Shares of the corporation
or other legal entity having outstanding equity securities which ultimately
controls the Issuer, and (y) if there is no such corporation or other legal
entity having outstanding equity securities, (I) proper provision shall be made
so that the Issuer shall create or otherwise make available for purposes of the
exercise of the Rights in accordance with the terms of this Agreement, a kind or
kinds of security or securities having a fair market value at least equal to the
economic value of the Common Shares which each holder of a Right would have been
entitled to receive if the Issuer had been a corporation or other legal entity
having outstanding equity securities; and (II) all other provisions of this
Agreement shall apply to the issuer of such securities as if such securities
were Common Shares.
(c) The Company shall not consummate any Flip-over Event, unless the
Issuer shall have a sufficient number of authorized Common Shares (or other
securities as contemplated in Section 13(b) above) which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior to such consummation the Company and the
Issuer shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in subsections (a) and (b) of this
Section 13 and further providing that as promptly as practicable after the
consummation of any Flip-over Event, the Issuer shall:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities issuable
upon exercise of the Rights on an appropriate form, and shall use its
best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date;
(ii) take all such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights;
and
21
(iii) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act.
(d) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a Flip-
over Event occurs at any time after the occurrence of a Flip-in Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a) hereof.
Section 14. Fractional Rights and Fractional Securities.
(a) The Company shall not be required to issue fractions of Right or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company shall pay as promptly as practicable to the
registered holders of the Right Certificates with regard to which such
fractional Rights otherwise would be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For the purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights otherwise would have been issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the NYSE or, if the Rights are not listed or admitted to trading on
the NYSE, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of Common Shares
or other securities issuable upon exercise or exchange of the Rights or to
distribute certificates which evidence any such fractional securities. In lieu
of issuing any such fractional securities, the Company may pay to any Person to
whom or which such fractional securities would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of one such
security. For purposes of this Section 14(b), the current market value of a
Common Share or other security issuable upon the exercise or exchange of Rights
shall be the closing price thereof (as determined in the same manner as set
forth for Common Shares in the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise or exchange;
22
provided, however, that if neither the Common Shares nor any such other
securities are publicly held or listed or admitted to trading on any national
securities exchange, or the subject of available bid and asked quotes, the
current market value of one Common Share or such other security shall be
determined in good faith by the Board of Directors of the Company.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the holder of any Common Shares), may in his own behalf
and for his own benefit enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise Rights evidenced by such Right Certificate or Common Share
certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations under this
Agreement, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights shall be transferable only
in connection with the transfer of the Common Shares;
(b) After the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat the person in whose
name the Right Certificate (or, prior to the Distribution Date, the associated
Common Share certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificate or the associated Common Share certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary;
(d) Such holder expressly waives any right to receive any fractional Rights
and any fractional securities upon exercise or exchange of a Right, except as
otherwise provided in Section 14 hereof; and
23
(e) Notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, that the Company shall use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Common Shares or any other
securities of the Company which may at any time be issuable upon the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions of this Agreement or exchanged pursuant to the provisions of Section
27 hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, suit, action, proceeding or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate evidencing Common Shares or other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed,
24
executed and, where necessary, verified or acknowledged, by the proper Person or
Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
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 shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter 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
25
be deemed to be conclusively proved and established by a certificate signed by
any one of the Chairman of the Board, the President or any Vice President of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution and delivery hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof (including any adjustment which results in
Rights becoming void) or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of stock or other securities to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of stock or other securities will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President or any Vice President of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may
26
be interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof. The Rights Agent shall not be under any duty
or responsibility to insure compliance with any applicable federal or state
securities laws in connection with the issuance, transfer or exchange of Right
Certificates.
(j) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise, transfer, split up, combination or exchange, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise, transfer, split up, combination or exchange,
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 calendar days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 calendar days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares by registered or certified
mail, and to the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 calendar days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State of Georgia or the
State of New York (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the State
of Georgia or the State of New York), in good standing, having a principal
office in the State of Georgia or the State of New York, which is authorized
under such laws to exercise corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined
27
capital and surplus of at least $50 million. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price per share and the number or kind of securities issuable upon
exercise of the Rights made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale by the Company of Common
Shares following the Distribution Date and prior to the Expiration Date, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant to
the exercise or conversion of securities issued prior to the Distribution Date
which are exercisable for, or convertible into, Common Shares, and (b) may, in
any other case, if deemed necessary, appropriate or desirable by the Board of
Directors of the Company, issue Right Certificates representing an equivalent
number of Rights as would have been issued in respect of such Common Shares if
they had been issued or sold prior to the Distribution Date, as appropriately
adjusted as provided herein as if they had been so issued or sold; provided,
however, that (i) no such Right Certificate shall be issued if, and to the
extent that, in its good faith judgment the Board of Directors of the Company
shall have determined that the issuance of such Right Certificate could have a
material adverse tax consequence to the Company or to the Person to whom or
which such Right Certificate otherwise would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
otherwise shall have been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, redeem all
but not less than all of the then-outstanding Rights at the Redemption Price at
any time prior to the Close of Business on the later of (i) the Distribution
Date and (ii) the Share Acquisition Date, or on such later date as the Board of
Directors may designate prior to such time as the Rights are no longer
redeemable hereunder.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights shall terminate and the
only right thereafter of the
28
holders of Rights shall be to receive the Redemption Price. Promptly after the
action of its Board of Directors ordering the redemption of the Rights, the
Company shall publicly announce such action, and within 10 calendar days
thereafter, the Company shall give notice of such redemption to the holders of
the then-outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Company; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of the redemption of the Rights. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. The notice of redemption mailed to the holders of Rights
shall state the method by which the payment of the Redemption Price will be
made. The Company may, at its option, pay the Redemption Price in cash, Common
Shares (based upon the current per share market price of the Common Shares
(determined pursuant to Section 11(d) hereof) at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors of the
Company (based upon the fair market value of such other consideration,
determined by the Board of Directors of the Company in good faith) or any
combination thereof.
(c) At any time following the Share Acquisition Date, the Board of
Directors of the Company may relinquish the right to redeem the Rights under
this Section 23 by duly adopting a resolution to that effect. Immediately upon
adoption of such resolution, the rights of the Board of Directors of the Company
to redeem the Rights shall terminate without further action and without any
notice. Promptly after adoption of such a resolution, the Company shall publicly
announce such action; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of the action of the Board of
Directors of the Company.
(d) If, following the occurrence of a Share Acquisition Date and following
the expiration of the right of redemption hereunder, (i) a Person who is an
Acquiring Person shall have transferred or otherwise disposed of a number of
Common Shares in one transaction or series of transactions, not directly or
indirectly involving the Company or any of its Subsidiaries, which did not
result in the occurrence of a Triggering Event such that such Person is
thereafter the Beneficial Owner of 10% or less of the outstanding Common Shares,
and (ii) there are no other Persons immediately following the occurrence of the
event described in clause (i) who are Acquiring Persons, then the right of
redemption hereunder shall be reinstated and shall thereafter be exercisable
subject to the provisions of this Section 23.
Section 24. Notice of Certain Events.
(a) In case, after the Distribution Date, the Company shall propose (i) to
pay any dividend payable in stock of any class to the holders of Common Shares
or to make any other distribution to the holders of Common Shares (other than a
regular periodic cash dividend), (ii) to offer to the holders of Common Shares
rights, options or warrants to subscribe for or to purchase any additional
Common Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Common Shares (other than a
reclassification involving only the subdivision of
29
outstanding Common Shares), (iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of assets or earning power (including, without limitation, securities creating
any obligation on the part of the Company and/or any of its Subsidiaries)
representing more than 50% of the assets and earning power of the Company and
its Subsidiaries, taken as a whole, to any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Right Certificate, in
accordance with Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution or
offering of rights, options or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares, if any such date is to be fixed,
and such notice shall be so given, in the case of any action covered by clause
(i) or (ii) above, at least 10 calendar days prior to the record date for
determining holders of the Common Shares for purposes of such action, and, in
the case of any such other action, at least 10 calendar days prior to the date
of the taking of such proposed action or the date of participation therein by
the holders of the Common Shares, whichever shall be the earlier.
(b) In case any Triggering Event shall occur, then, in any such case, the
Company shall as soon as practicable thereafter give to the Rights Agent and
each holder of a Right Certificate, in accordance with Section 25 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights.
Section 25. Notices.
(a) Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Equifax PS, Inc.
______________________________
______________________________
Attention: Corporate Secretary
(b) Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
SunTrust Bank, Atlanta
Corporate Trust Department
30
X.X. Xxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Department Manager
(c) Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate (or, if
prior to the Distribution Date, to the holder of any certificate evidencing
Common Shares) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution Date and
subject to the last sentence of this Section 26, the Company may in its sole and
absolute discretion and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of Rights or shares of the Company. From and after the Distribution Date
and subject to the last sentence of this Section 26, the Company may in its sole
and absolute discretion and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder,
or (iv) to supplement or amend the provisions hereunder in any manner which the
Company may deem desirable, including, without limitation, the addition of other
events requiring adjustment to the Rights under Sections 11 or 13 hereof or
procedures relating to the redemption of the Rights, which supplement or
amendment shall not, in the good faith determination of the Board of Directors
of the Company, adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Upon the delivery of a certificate from an officer of the
Company that states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute such
supplement or amendment; provided, however, that the failure or refusal of the
Rights Agent to execute such supplement or amendment shall not affect the
validity of any supplement or amendment adopted by the Company, any of which
shall be effective in accordance with the terms thereof. Notwithstanding
anything in this Agreement to the contrary, no supplement or amendment shall be
made at such time as the Rights are not then redeemable which decreases the
stated Redemption Price or the period of time remaining until the Final
Expiration Date or which modifies a time period relating to when the Rights may
be redeemed.
Section 27. Exchange.
(a) The Board of Directors of the Company may, at its option, at any time
after the later of the Distribution Date and the first occurrence of a
Triggering Event, exchange all or part of the then-outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio
of one Common Share per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction
31
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 27(a) hereof, and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right with respect to such Rights thereafter
of the holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. Promptly after the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 27(a) hereof,
the Company shall publicly announce such action, and within 10 calendar days
thereafter shall give notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange shall state the method
by which the exchange of the Common Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 27, the Company, at its
option, may substitute for any Common Share exchangeable for a Right, (i)
equivalent common shares (as such term is used in Section 11(a)(iii) hereof),
(ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value which the
Board of Directors of the Company shall have determined in good faith to be
equal to the current market value of one Common Share (determined pursuant to
Section 11(d) hereof) on the Trading Day immediately preceding the date of
exchange pursuant to this Section 27.
Section 28. Successors; Certain Covenants. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights
32
Agent and the registered holders of the Right Certificates (or prior to the
Distribution Date, the Common Shares).
Section 30. Determinations and Actions by the Board of Directors, etc. For
all purposes of this Agreement, any calculation of the number of Common Shares
or other securities outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement. The Board of Directors
of the Company shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or exchange or not to redeem or
exchange the Rights or to supplement or amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board of Directors in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject any member of the Board to any liability to
the holders of the Rights.
Section 31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the internal substantive
laws of the State of Georgia and for all purposes shall be governed by and
construed in accordance with the internal substantive laws of such State
applicable to contracts to be made and performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL]
Attest: EQUIFAX PS, INC.
By: By:
------------------------------- ----------------------------
Secretary Name:
Title:
[SEAL]
Attest: SUNTRUST BANK, ATLANTA
By: By:
------------------------------- ----------------------------
Name: Name:
Title: Title:
34
Exhibit A
Form of Right Certificate
Rights
Certificate No. R-
NOT EXERCISABLE AFTER ___________, 2011 OR EARLIER IF REDEEMED. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED
IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) MAY BECOME NULL AND VOID.
Right Certificate
Equifax PS, Inc.
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of ____________, 2001 (the "Rights Agreement"), between
Equifax PS, Inc., a Georgia corporation (the "Company"), and SunTrust Bank,
Atlanta, a Georgia banking corporation (the "Rights Agent"), to purchase from
the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M. (Eastern time) on ____________,
2011 at the principal office or offices of the Rights Agent designated for such
purpose, one fully paid nonassessable share of common stock, par value $.01 per
share (the "Common Shares"), of the Company, at a purchase price of [$____] per
Common Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase and related Certificate
duly executed. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exercised. The number of
Rights evidenced by this Right Certificate (and the number of Common Shares
which may be purchased upon exercise thereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of ___________,
2001, based on the Common Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of securities issuable upon the exercise of the Rights evidenced by this
Right Certificate are subject to adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Right Certificates, which limitations of
rights
35
include the temporary suspension of the exercisability of the Rights under the
circumstances specified in the Rights Agreement. Copies of the Rights Agreement
are on file at the above-mentioned office of the Rights Agent.
Pursuant to the Rights Agreement, from and after the later of the
Distribution Date and the first occurrence of a Flip-in Event (as such term is
defined in the Rights Agreement), (i) any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Affiliate or Associate of
such Acquiring Person) shall be void and any holder of such Rights shall
thereafter have no right to exercise such Rights under any provision of the
Rights Agreement, (ii) no Right Certificate shall be issued pursuant to the
Rights Agreement that represents Rights beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof, (iii) no Right Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring Person or
any Affiliate or Associate thereof or to any nominee of such Acquiring Person or
Affiliate or Associate thereof, and (iv) any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person or any Affiliate or Associate
thereof shall be cancelled.
This Right Certificate, with or without other Right Certificates, may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the holder to purchase a like number of Common
Shares (or other securities, as the case may be) as the Right Certificate or
Right Certificates surrendered shall have entitled such holder (or former holder
in the case of a transfer) to purchase, upon presentation and surrender hereof
at the principal office of the Rights Agent designated for such purpose, with
the Form of Assignment (if appropriate) and the related Certificate duly
executed.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $0.01 per Right. The Rights Agreement may be supplemented and amended
by the Company, as provided therein.
The Company is not required to issue fractional Common Shares or other
securities issuable upon the exercise of any Right or Rights evidenced hereby.
In lieu of issuing such fractional Common Shares or other securities, the
Company may make a cash payment, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Shares
or of any other securities of the Company which may at any time be issuable upon
the exercise of the Right or Rights represented hereby, nor shall anything
contained herein or in the Rights Agreement be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised in accordance with
the provisions of the Rights Agreement.
36
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of __________, 20__.
ATTEST: Equifax PS, Inc.
By: By:
------------------------------- ----------------------------
Secretary Title:
[SEAL]
Countersigned:
SunTrust Bank, Atlanta
By:
------------------------------------
Authorized Signature
37
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED,___________________________________________________ hereby
sells, assigns and transfers unto_______________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ____________, 20__
_________________________
Signature
Signature Guaranteed:
38
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated: __________, 20__
_________________________
Signature
39
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To Equifax PS, Inc.
The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Right Certificate to purchase the Common Shares or other
securities issuable upon the exercise of such Rights and requests that
certificates for such securities be issued in the name of:
Please insert social security or other identifying number: ________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number: _______________
________________________________________________________________________________
(Please print name and address)
Optional Election to Exercise without Payment of Cash:
With respect to the exercise of the ________ Rights specified above, the
undersigned hereby elects to exercise such Rights without payment of cash and to
receive a number of Common Shares or other securities having a value (as
determined pursuant to the Rights Agreement) equal to the difference between (i)
the value of the Common Shares or other securities that would have been issuable
upon the exercise thereof upon payment of the cash amount as provided in the
Rights Agreement, and (ii) the amount of such cash payment.
Dated: __________, 20__
_______________________________
Signature
Signature Guaranteed:
40
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, 20__
__________________________
Signature
41
NOTICE
Signatures on the foregoing Form of Assignment and Form of Election to
Purchase and in the related Certificates must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
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.
42
