EXHIBIT 4.1
RIGHTS AGREEMENT
by and between
HOSPITALITY PROPERTIES TRUST
AND
STATE STREET BANK AND TRUST COMPANY,
as Rights Agent
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Dated as of May 20, 1997
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TABLE OF CONTENTS
Section 1. Certain Definitions.......................................................................1
Section 2. Appointment of Rights Agent...............................................................5
Section 3. Issue of Rights Certificates..............................................................5
Section 4. Form of Rights Certificates...............................................................7
Section 5. Countersignature and Registration.........................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates: Mutilated, Destroyed, Lost or Stolen Rights Certificates....................8
Section 7. Exercise of Rights; Purchase Price: Expiration Date of Rights.............................9
Section 8. Cancellation and Destruction of Rights Certificates......................................11
Section 9. Reservation and Availability of Capital Stock............................................11
Section 10. Preferred Share Record Date..............................................................12
Section 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of Rights...................................................13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares...............................20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.....................20
Section 14. Fractional Rights and Fractional Shares..................................................23
Section 15. Rights of Action.........................................................................24
Section 16. Agreement of Rights Holders..............................................................24
Section 17. Rights Certificate Holder Not Deemed a Shareholder.......................................25
Section 18. Concerning the Rights Agent..............................................................25
Section 19. Merger or Consolidation or Change of Name of Rights Agent................................25
Section 20. Duties of Rights Agent...................................................................26
Section 21. Change of Rights Agent...................................................................27
Section 22. Issuance of New Rights Certificates......................................................28
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Section 23. Redemption and Termination...............................................................29
Section 24. Notice of Certain Events.................................................................29
Section 25. Notices..................................................................................30
Section 26. Supplements and Amendments...............................................................30
Section 27. Successors...............................................................................31
Section 28. Determinations and Actions by the Board etc.............................................31
Section 29. Exchange.................................................................................32
Section 30. Benefits of this Agreement...............................................................33
Section 31. Severability.............................................................................33
Section 32. Governing Law............................................................................33
Section 33. Counterparts.............................................................................33
Section 34. Descriptive Headings.....................................................................33
INDEX OF EXHIBITS
Exhibit A..............................................................................Articles Supplementary
Exhibit B..............................................................................Summary of Rights Plan
Exhibit C..........................................................................Form of Rights Certificate
ii
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of May 20, 1997, between Hospitality
Properties Trust, a Maryland real estate investment trust (the "Company"), and
State Street Bank and Trust Company , a Massachusetts trust company (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, on May 20, 1997 (the "Rights Dividend Declaration Date"), the
Board of Trustees of the Company authorized and declared a dividend distribution
of one Right (as hereinafter defined) for each Common Share (as hereinafter
defined) of the Company outstanding at the Close of Business (as hereinafter
defined) on June 20, 1997 (the "Record Date"), and authorized the issuance of
one Right (as such number may hereinafter be adjusted pursuant to the provisions
of Section 11(i) hereof) for each Common Share of the Company issued between the
Record Date (whether originally issued or delivered from the Company's treasury)
and the Distribution Date (as hereinafter defined) and under certain
circumstances thereafter, each Right initially representing the right to
purchase one one-hundredth of a Preferred Share (as hereinafter defined) of the
Company, upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
10% or more of the Common Shares of the Company then outstanding, but shall not
include an Exempt Person.
"Act" shall mean the Securities Act of 1933, as amended.
"Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
"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.
"Agreement" shall mean this Rights Agreement as originally executed or
as it may from time to time be supplemented or amended pursuant to the
applicable provisions hereof.
"Beneficial Owner" - a Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event, or
(C) securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which are Original Rights or
securities issued pursuant to Section 11(i) hereof in connection with
an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to vote
or dispose of or has "beneficial ownership" of (as determined pursuant
to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations under
the Exchange Act; and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof)
with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (A) of the proviso
to subparagraph (ii) of this definition or disposing of any voting
securities of the Company; provided, however, that nothing in this
definition shall cause a person engaged in business as an underwriter
of securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired through such person's participation in
good faith in a firm commitment underwriting until the expiration of
forty days after the date of such acquisition.
"Board" shall mean the Board of Trustees of the Company.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the states in which either the Rights Agent
or the Transfer Agent is located are authorized or obligated by law or executive
order to close.
"Close of Business" on any given date shall mean 5:00 P.M., Boston
time, on such date; provided, however, that if such date is not a Business Day,
it shall mean 5:00 P.M., Boston time, on the next succeeding Business Day.
"Common Shares" when used with reference to the Company shall mean the
common shares of beneficial interest, par value $.01 per share, of the Company
or any other shares of beneficial interest or capital stock of the Company into
which such shares shall be reclassified or changed. "Common Shares" when used
with reference to any Person which shall be organized in corporate form, other
than the Company, shall mean the capital stock or other equity security with the
greatest voting power or the equity securities or other equity interest having
power to control or direct the management of such Person or, if such Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person and which has or have issued any such outstanding
capital stock,
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equity securities or equity interest. "Common Shares" when used with reference
to any Person which shall not be organized in corporate form shall mean units of
beneficial interest which (i) shall represent the right to participate generally
in the profits and losses of such Person (including, without limitation, any
flow-through tax benefits resulting from an ownership interest in such Person)
and (ii) shall be entitled to exercise the greatest voting power of such Person
or, in the case of a limited partnership, shall have the power to remove the
general partner or partners.
"Common Shares Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Company" shall mean the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such, or until a
Principal Party shall assume, and thereafter be liable for, all obligations and
duties of the Company hereunder pursuant to the applicable provisions of this
Agreement, and thereafter "Company" shall mean such successor corporation or
Principal Party.
"Continuing Trustee" shall mean any member of the Board (while such
Person is a member of the Board) who is not an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, or a representative or nominee of an
Acquiring Person or of any such Affiliate or Associate, and who either (i) was a
member of the Board prior to the Stock Acquisition Date or (ii) on or subsequent
to the Stock Acquisition Date became a member of the Board and whose nomination
for election or election to the Board was recommended or approved by a majority
of the Continuing Trustee, then on the Board.
"Current Market Price" when used with respect to Common Shares or
Preferred Shares shall mean the applicable amount determined pursuant to Section
11(d) hereof.
"Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
"Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
"Equivalent Preferred Shares" shall have the meaning set forth in
Section 11(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Ratio" shall have the meaning set forth in Section 29(a)
hereof.
"Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit or employee share or stock plan of the
Company or of any Subsidiary of the Company, (iv) any Person or entity
organized, appointed, established or holding Common Shares of the Company by,
for or pursuant to the terms of any such plan, (v) any Person who becomes an
Acquiring Person solely as a result of a reduction in the number of Common
Shares of the Company outstanding due to the repurchase of Common Shares of the
Company by the Company, unless and until any such Person shall purchase or
otherwise become the Beneficial Owner of additional Common Shares of the Company
constituting 1% or more of the then outstanding Common Shares of the Company,
(vi) any Person who or which shall have executed a written agreement with the
Company (which shall have been approved by a majority of the Outside Trustees)
prior to the date on which such Person became the Beneficial Owner of 10% or
more of the Common Shares then outstanding, which agreement imposes one or more
limitations (the "Thresholds") on the amount of such Person's Beneficial
Ownership of Common Shares, if and so long as the Thresholds continue to be
binding on such Person and such Person is in substantial compliance (as
determined by a majority of the Outside
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Trustees) with the terms of such written agreement, (vii) any Person who or
which is then serving as the Company's investment advisor, or (viii) Health and
Retirement Properties Trust, a Maryland real estate investment trust or any
entity which is a successor to such real estate investment trust.
"Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
"Final Expiration Date" shall mean the Close of Business on April 30,
2007.
"Original Rights" shall mean Rights acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof.
"Outside Trustees" shall mean members of the Board who are not officers
of the Company or any of its Subsidiaries or officers or stockholders of the
Person who or which is then serving as the Company's investment advisor and who
are not Acquiring Persons or representatives, nominees, Affiliates or Associates
of Acquiring Persons.
"Person" shall mean any individual, firm, corporation, partnership,
trust or other entity and includes, without limitation, an unincorporated group
of persons who, by formal or informal agreement, have embarked on a common
purpose or act.
"Preferred Shares" shall mean the Junior Participating Preferred Shares
of beneficial interest, par value $.01 per share, of the Company, having the
rights, powers and preferences as set forth on Exhibit A hereto.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" shall have the meaning set forth in Section 4(a)
hereof and, if applicable, Section 11(a)(ii) or Section 13(a) hereof.
"Record Date" shall have the meaning set forth in the WHEREAS clause at
the beginning of the Agreement.
"Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
"Right" shall have the meaning set forth in the WHEREAS clause at the
beginning of the Agreement.
"Rights Agent" shall mean the Person named as the "Rights Agent" in the
first paragraph of this Agreement until a successor Rights Agent shall have
become such pursuant to the applicable provisions hereof, and thereafter,
"Rights Agent" shall mean such successor Rights Agent. If at any time there is
more than one Person appointed by the Company as Rights Agent pursuant to the
applicable provisions of this Agreement, "Rights Agent" shall mean and include
each such Person.
"Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.
"Rights Dividend Declaration Date" shall have the meaning set forth in
the WHEREAS clause at the beginning of the Agreement.
"Section 11(a)(ii) Event" shall have the meaning set forth in Section
11(a)(ii) hereof.
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"Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.
"Section 13 Event" shall have the meaning set forth in Section 13(a)
hereof.
"Spread" shall have the meaning set forth in Section 11(a)(iii) hereof.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company that an Acquiring Person has become such.
"Subsidiary" shall mean, with reference to any Person, any corporation
or other entity of which securities or other ownership interest having ordinary
voting power sufficient, in the absence of contingencies, to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly beneficially owned or otherwise controlled, by such
Person and any Affiliate of such Person.
"Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Summary of Rights" shall have the meaning set forth in Section 3(a)
hereof.
"Thresholds" shall have the meaning set forth in Section 11(d)(ii)
hereof.
"Trading Day" shall have the meaning set forth in Section 11(d)(ii)
hereof.
"Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 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 prior to the Distribution Date also
be the holders of the Common Shares of the Company) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and in no event be
liable for, the acts or omissions of any such coRights Agent. Any actions which
may be taken by the Rights Agent pursuant to the terms of this Agreement may be
taken by any such co-Rights Agent.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth Business Day (or such specified later date as may be determined by the
Board with the concurrence of a majority of the Continuing Trustees before the
occurrence of the Distribution Date) after the Stock Acquisition Date (or, if
the tenth Business Day after the Stock Acquisition Date occurs before the Record
Date, the Close of Business on the Record Date) or (ii) the Close of Business on
the tenth Business Day (or such specified or unspecified later date as may be
determined by the Board with the concurrence of a majority of the Continuing
Trustees before the occurrence of the Distribution Date) after the date that a
tender or exchange offer by any Person (other than an Exempt Person) is first
published or sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon consummation thereof, such
Person would be an Acquiring Person (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraphs (b) and (c) of this Section 3) by the
certificates for the Common Shares
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of the Company registered in the names of the holders of the Common Shares of
the Company either with the Summary of Rights to Purchase Preferred Stock,
substantially in the form attached hereto as Exhibit B (the "Summary of
Rights"), attached or bearing the legend set forth in Section 3(c) hereof (which
certificates for Common Shares of the Company shall be deemed also to be
certificates for Rights) and not by separate certificates and (y) the Rights
will be transferable only in connection with the transfer of the underlying
Common Shares of the Company (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the Common
Shares of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, one or more
rights certificates in substantially the form of Exhibit C hereto (the "Rights
Certificates") evidencing one Right for each Common Share of the Company so
held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per Common Share of the Company has been made pursuant
to Section 11(i) hereof, at the time of distribution of the Rights Certificates,
the Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of the Summary of Rights by first-class, postage
prepaid mail, to each record holder of the Common Shares of the Company as of
the Close of Business on the Record Date, at the address of such holder shown on
the records of the Company. With respect to certificates for the Common Shares
of the Company outstanding as of the Record Date, as set forth in paragraph (a)
above, until the earlier of the Distribution Date or the Expiration Date, the
Rights will be evidenced by such certificates for the Common Shares of the
Company with or without a copy of the Summary of Rights attached, and the
registered holders of the Common Shares of the Company shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any certificates
representing Common Shares of the Company in respect of which Rights have been
issued shall also constitute the transfer of the Rights associated with such
Common Shares of the Company.
(c) Rights shall be issued in respect of all Common Shares of
the Company which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date, and to the extent provided in Section 22 hereof, in
respect of Common Shares of the Company issued after the Distribution Date and
prior to the Expiration Date. Certificates representing such Common Shares of
the Company shall also be deemed to be certificates for Rights, and shall, as
promptly as practicable following the Record Date, bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between
Hospitality Properties Trust (the "Company") and State Street Bank and
Trust Company (the "Rights Agent") dated as of May 20, 1997 (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt of
a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights beneficially owned (as such term is
defined in the Rights Agreement) by, any Person who is, was or becomes
an Acquiring Person, or any Affiliate or Associate
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thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, may become null and void. The Rights shall not be exercisable,
and shall be void so long as held, by a holder in any jurisdiction
where the requisite qualification to the issuance to such holder, or
the exercise by such holder, of the Rights in such jurisdiction shall
not have been obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Shares of the Company represented by such certificates shall be
evidenced by such certificates alone, and registered holders of Common Shares of
the Company shall also be the registered holders of the associated Rights, and
the transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Shares of the Company represented by such
certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit C hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders thereof
to purchase such number of one one-hundredths of a Preferred Share as shall be
set forth therein at the exercise price set forth therein (such exercise price
per one one-hundredth of a share, as adjusted from time to time hereunder, the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which a majority of the Continuing Trustees has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
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Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed under seal (or
with the same force and effect as a document executed under seal) on behalf of
the Company by its Chairman of the Board, its President or any Vice President
and by the Treasurer or any Assistant Treasurer, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificates may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates: Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the Expiration
Date, any Rights Certificate or Rights Certificates may be transferred, split
up, combined or exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share (or, following a Triggering Event, Common Shares, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Rights Certificates surrendered then entitled such holder (or former holder
in the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer or
exchange of any such surrendered Rights Certificate or Rights Certificates until
the registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Rights Certificate or
Rights Certificates and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
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(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to each of them of the loss, theft, destruction
or mutilation of a valid Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to each of them,
and reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price: Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-hundredths of a Preferred Share (or Common Shares,
other securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earliest of (i) the
Final Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof or exchanged as provided in Section 29 hereof or
(iii) the time at which the Rights expire pursuant to Section 13(d) hereof (the
earliest of (i), (ii) and (iii) being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one one-hundredth of a
Preferred Share pursuant to the exercise of a Right shall initially be $100 and
shall be subject to adjustment from time to time as provided in Sections 11 and
13(a) hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate on
the reverse side of the Rights Certificate duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price, as such
amount may be reduced pursuant to Section 11(a)(iii) hereof, per one
one-hundredth of a Preferred Share (or Common Shares, other securities, cash or
other assets, as the case, may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax or other governmental charge, the
Rights Agent shall, subject to Sections 7(f) and 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-hundredths of a Preferred
Share to be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the Company shall have elected
to deposit the total number of Preferred Shares issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the Company the amount
of cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by
- 9 -
such holder, and (iv) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate. The payment
of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified check, cashier's check
or bank draft payable to the order of the Company. In the event that the Company
is obligated to issue other securities (including Common Shares) of the Company,
pay cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent, if and
when appropriate. The Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon any exercise of Rights, a number of
Rights be exercised so that only whole Preferred Shares would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person which a majority of the Continuing Trustees in
its sole discretion determines is or was involved in or caused or facilitated,
directly or indirectly, such Section 11(a)(ii) Event, (ii) a transferee of any
such Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after such Acquiring Person becomes such or (iii) a transferee of any
such Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with such Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from such Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which a majority of the Continuing Trustees has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall become null
and void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but the Company and the Rights Agent shall have no liability to
any holder of Rights Certificates or other Person as a result of the Company's
failure to make any determinations with respect to an Acquiring Person or any of
their Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Rights
Certificate upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
assignment or exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered
- 10 -
to the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form or if surrendered to the Rights Agent, shall
be cancelled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
(and, following the occurrence of a Triggering Event, out of its authorized and
unissued Common Shares and/or other securities or out of its authorized and
issued shares held in its treasury), the number of Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) that, as provided in this Agreement (including Section 11(a)(iii)
hereof), will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
national securities exchange, the Company shall use its reasonable efforts to
cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use all reasonable efforts to (i) file,
as soon as practicable following the earliest date after the first occurrence of
a Triggering Event in which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with this
Agreement, a registration statement under the Act on an appropriate form with
respect to the securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable after
such filing and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable for
such securities or (B) the Expiration Date. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the securities
or "blue sky" laws of the various states in connection with the exercisability
of the Rights. The Company may, acting by resolution of its Board (which
resolution shall be effective only with the concurrence of a majority of the
Continuing Trustees), temporarily suspend, for a period of time not to exceed
ninety (90) days after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. In the event of
any such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. In
addition, if the Company shall determine that a registration statement is
required in other circumstances following the Distribution Date, the Company may
similarly temporarily suspend the exercisability of the Rights until such time
as a registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not otherwise be permitted
under applicable law or a registration statement shall not have been declared
effective.
- 11 -
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-hundredths of a
Preferred Share (and, following the occurrence of a Triggering Event, Common
Shares and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued, fully paid and
nonassessable.
(e) The Company further covenants and agrees that, except as
set forth in Section 6(a) hereof, it will pay when due and payable any and all
federal and state transfer taxes and similar governmental charges which may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for a number of one one-hundredths of a Preferred Share (or
Common Shares and/or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax or
other governmental charge which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of one one-hundredths of a Preferred Share (or Common
Shares and/or other securities, as the case may be) in respect of a name other
than that of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise, nor shall the Company be required to issue or deliver
any certificates for a number of one one-hundredths of a Preferred Share (or
Common Shares and/or other securities, as the case may be) in a name other than
that of the registered holder upon the exercise of any Rights until such tax or
charge shall have been paid (any such tax or charge being payable by the holder
of such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax or charge is due.
Section 10. Preferred Share Record Date. Each person in whose name any
certificate for a number of one one-hundredths of a Preferred Share (or Common
Shares and/or other securities, as the case may be) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of such fractional Preferred Share (or Common Shares and/or other securities, as
the case may be) represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer taxes
and other governmental charges) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Shares (or Common
Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Shares (or Common
Shares and/or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the Rights shall be
exercisable, including without limitation the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares, or
fractions thereof, purchasable upon the exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide or split the outstanding Preferred Shares, (C)
combine or consolidate the outstanding Preferred Shares into a smaller number of
shares or (D) issue any shares of its capital stock in a reclassification of the
Preferred
- 12 -
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, split, combination, consolidation or
reclassification, and the number and kind of Preferred Shares or capital stock,
as the case may be, issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the aggregate number
and kind of Preferred Shares or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date and at a time when
the Preferred Shares (or other capital stock, as the case may be) transfer books
of the Company were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, split, combination,
consolidation or reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii)
hereof.
(ii) In the event (a "Section 11(a)(ii) Event") any Person
(other than an Exempt Person) alone or together with its Affiliates and
Associates (other than an Exempt Person) shall, at any time after the Rights
Dividend Declaration Date, become an Acquiring Person, unless the event causing
such Person to become an Acquiring Person is (x) a Section 13 Event or (y) an
acquisition of Common Shares of the Company pursuant to a tender offer or an
exchange offer for all outstanding Common Shares of the Company at a price and
on terms determined by at least a majority of the Outside Trustees, after
receiving advice from one or more investment banking firms, to be (a) at a price
which is fair to shareholders (taking into account all factors which such
Outside Trustees deem relevant including, without limitation, prices which could
reasonably be achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and (b) otherwise in the best interests
of the Company and its shareholders, then promptly after the date of occurrence
of a Section 11(a)(ii) Event, proper provision shall be made so that each holder
of a Right (except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu of a
number of one one-hundredths of a Preferred Share, such number of Common Shares
of the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, whether or not such Right was then
exercisable, and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the Current Market Price
per share of Common Shares of the Company on the date of such first occurrence
(such number of shares being referred to as the "Adjustment Shares").
(iii) In lieu of issuing Common Shares of the Company in
accordance with Section 11(a)(ii) hereof, the Company, acting by resolution of
the Board (which resolution shall be effective only with the concurrence of a
majority of the Continuing Trustees), may, and in the event that the number of
Common Shares of the Company which are authorized by the Company's Declaration
of Trust (as the same may be amended and restated from time to time) but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company, acting by resolution of the Board (which resolution shall be effective
only with the concurrence of a majority of the Continuing Trustees), shall (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase Price
attributable to each Right (such excess being referred to as the "Spread"), and
- 13 -
(B) with respect to each Right (subject to Section 7(e) hereof), make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
equity securities of the Company other than Common Shares of the Company
(including, without limitation, preferred shares, or units of preferred shares,
of preferred stock which the Board has deemed to have the same value as Common
Shares (such shares of preferred stock being referred to as "Common Shares
Equivalents")), (4) debt securities of the Company, (5) other assets or (6) any
combination of the foregoing which, when added to any Common Shares issued upon
such exercise, have an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board (with the concurrence of a
majority of the Continuing Trustees) based upon the advice of a nationally
recognized investment banking firm selected by the Board; provided, however, if
the Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty 30 days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) hereof, as such date may be
amended pursuant to Section 26 hereof, expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, Common Shares of the Company
(to the extent available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If the Board (with the concurrence
of a majority of the Continuing Trustees) shall determine in good faith that it
is likely that sufficient additional Common Shares of the Company could be
authorized for issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek shareholder approval, if required, for the authorization of
such additional shares (such period, as it may be extended being referred to
herein as the "Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to the first and/or second sentences of
this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights and (y)
may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of each Common Share of the Company shall
be the Current Market Price per share of the Common Shares of the Company on the
Section 11(a)(ii) Trigger Date and the value of any Common Shares Equivalent
shall be deemed to have the same value as the Common Shares of the Company on
such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares ("Equivalent
Preferred Shares")) or securities convertible into Preferred Shares or
Equivalent Preferred Shares at a price per Preferred Share or per Equivalent
Preferred Share (or having a conversion price per share, if a security
convertible into Preferred Shares or Equivalent Preferred Shares) less than the
Current Market Price per Preferred Share 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 Preferred Shares outstanding on
such record date, plus the number of Preferred Shares and/or Equivalent
Preferred Shares which the aggregate subscription or Purchase Price of the total
number of Preferred Shares and/or Equivalent Preferred Shares so to be
- 14 -
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price, and
the denominator of which shall be the number of Preferred Shares outstanding on
such record date, plus the number of additional Preferred Stock and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board (with the concurrence of a
majority of the Continuing Trustees), whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. Shares of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Preferred Shares, but
including any dividend payable in stock other than Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Market
Price per share of Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board (with the concurrence of a
majority of the Continuing Trustees), whose determination shall be described in
a statement filed with the Rights Agent and shall be binding upon the Rights
Agent and the holders of the Rights) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to a Preferred Shares and the denominator of which shall be
such Current Market Price per Preferred Share. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per Common Share on any date shall be deemed to be the average of the
daily closing prices per share of such Common Share for the thirty (30)
consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Share on any date shall be deemed to be the average of
the daily closing prices per such Common Share or the ten (10) consecutive
Trading Days immediately following such date; provided, however, that in the
event that the Current Market Price per share of the Common Share is determined
during a period following the announcement by the Company of (A) a dividend or
distribution on such Common Share payable in Common Shares or securities
convertible into shares of such Common Shares (other than the Rights) or (B) any
subdivision, combination, consolidation, reverse stock split or reclassification
of Common Shares, and prior to the expiration of the requisite thirty (30)
Trading Days or ten (10) Trading Day period, as set forth above, after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination, consolidation, reverse stock split or
reclassification, then, in each such case, the Current Market Price shall be
properly adjusted to take into account ex-dividend trading. The closing price
for each day shall be the last sale price, regular way, or in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as
- 15 -
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange, or
if the Common Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the 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 the
Nasdaq National Market or the Nasdaq Stock Market or such other quotation 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 (with the concurrence of a majority of the Continuing Trustees). If the
Common Shares are not publicly held or not so listed, traded or quoted, and a
market maker is not making a market, Current Market Price per share of Common
Shares shall mean the fair value per share as determined in good faith by the
Board (with the concurrence of a majority of the Continuing Trustees), whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
Current Market Price per Preferred Share shall be determined in the same manner
as set forth above for the Common Shares in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the Current Market Price per
Preferred Share cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as
such number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Shares occurring
after the date of this Agreement) multiplied by the Current Market Price per
share of the Common Shares. If neither the Common Shares nor the Preferred Stock
are publicly held or so listed or traded, Current Market Price per share of the
Preferred Stock shall mean the fair value per share as determined in good faith
by the Board (with the concurrence of a majority of the Continuing Trustees),
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. For all purposes of this
Agreement, the Current Market Price of one one-hundredth of a Preferred Share
shall be equal to the Current Market Price of one Preferred Share divided by
100. The term "Trading Day" shall mean a 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.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest thousandth of a Common Share
or other share or one-millionth of a Preferred Share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Shares, thereafter the number of such other shares so receivable upon
- 16 -
exercise of any Right and the Purchase Price thereof (or the number of rights)
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Preferred
Shares contained in Sections ll(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Preferred Shares shall apply on like terms to any such other shares;
provided, however, that the Company shall not be liable for its inability to
reserve and keep available for issuance upon exercise of the Rights pursuant to
Section 11(a)(ii) a number of Common Shares of the Company greater than the
number then authorized by the Company's Declaration of Trust (as the same may be
amended and restated from time to time) but not outstanding or reserved for any
other purpose.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections ll(b) and (e), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one-ten thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least ten (10) days later than
the date of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
- 17 -
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-hundredths of a
share and the number of one one-hundredths of a share which were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the number
of one one-hundredths of a Preferred Share issuable upon exercise of the Rights,
the Company shall use its best efforts to take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of one
one-hundredths of a Preferred Share at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such adjustments 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 shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at
less than the Current Market Price, (iii) issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into or exchangeable
for Preferred Shares, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company to
holders of its Preferred Shares shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof) or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger, sale or transfer there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger, sale or transfer, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party"
- 18 -
for purposes of Section 13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, Section 26,
Section 29 or Section 31 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding Common Shares of the Company payable in Common
Shares of the Company, (ii) subdivide the outstanding Common Shares of the
Company in a manner not covered in (i) above or (iii) combine the outstanding
Common Shares of the Company into a smaller number of shares, (x) the number of
one one-hundredths of a Preferred Share then purchasable upon exercise of a
Right shall be proportionately adjusted so that the number of one one-hundredths
of a Preferred Share purchasable thereafter upon proper exercise of each Right
shall equal the result obtained by multiplying the number of one one-hundredths
of a Preferred Share so purchasable immediately prior to such event by a
fraction the numerator of which shall be the total number of Common Shares of
the Company outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of Common Shares of the Company
outstanding immediately following the occurrence of such event and (y) action
shall be taken such that each share of Common Shares of the Company outstanding
immediately after such event shall have issued with respect to it that number of
Rights which each share of Common Shares of the Company outstanding immediately
prior to such event had issued with respect to it. The adjustments provided for
in this Section 11(p) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or consolidation is
effected. If an event occurs which would require an adjustment under Section
11(a)(ii) and this Section 11(p), the adjustments provided for in this Section
11(p) shall be in addition and prior to any adjustment required pursuant to
Section 11(a)(ii).
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Shares and the Common Shares of the Company, a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or if prior to the Distribution Date, to each holder of a
certificate representing Common Shares of the Company) in accordance with
Section 25 hereof. Notwithstanding the foregoing sentence, the failure of the
Company to prepare such certificate or statement or make such filings or
mailings shall not affect the validity of, or the force or effect of, the
requirement for such adjustment. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event (a "Section 13 Event") that, on or after the
Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate or otherwise combine with, or merge with or into, any other Person
or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), and the Company shall not be the continuing
or surviving corporation of such consolidation, combination or merger, (y) any
Person or Persons (other than a
- 19 -
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof) shall consolidate or combine with, or merge with or into, the Company,
and the Company shall be the continuing or surviving corporation of such
consolidation, combination or merger and, in connection with such consolidation,
combination or merger, all or part of the outstanding Common Shares of the
Company shall be changed into or exchanged for stock or other securities of any
other Person or Persons or cash or any other property or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole and calculated on the
basis of the Company's most recent regularly prepared financial statements) to
any Person or Persons (other than the Company or any Subsidiary of the Company
in one or more transactions each of which complies with Section 11(o) hereof);
provided, however, that this clause (z) of Section 13(a) shall not apply to the
pro rata distribution by the Company of assets (including securities) of the
Company or any of its Subsidiaries to all holders of the Company's Common
Shares; then, and in each such case (except as may be contemplated by Section
13(d) hereof), proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall, on or after the later
of (A) the date of the first occurrence of any such Section 13 Event or (B) the
date of the expiration of the period within which the Rights may be redeemed
pursuant to Section 23 hereof (as the same may be amended or reinstated as
provided in Section 26 or Section 31 hereof, respectively), have the right to
receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid, nonassessable and freely tradeable Common Shares of the
Principal Party, not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such one one-hundredths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first occurrence), and (2)
dividing that product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the Current Market Price per the Common
Share of such Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its Common Shares thereafter deliverable upon the exercise of
the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a) hereof, (A)
the Person that is the issuer of any securities into which Common
Shares of the Company are converted, changed or exchanged in such
merger, consolidation or combination, or if there is more than one such
issuer, the issuer the Common Shares of which has the greatest market
value or (B) if no securities are so issued, the Person
- 20 -
that is the other party to such merger (and survives the merger),
consolidation or combination (or if there is more than one such Person,
the Person the Common Shares of which has the greatest value), or if
the other party to the merger does not survive the merger, the Person
that does survive the merger (including the Company if it survives);
and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if the
Person receiving the greater portion of the assets or earning power
cannot be determined, whichever of such Persons as is the issuer of the
Common Shares having the greatest aggregate market value;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act and such Person
is a direct or indirect Subsidiary of another person the Common Shares of which
is and has been so registered, "Principal Party" shall refer to such other
Person; (2) if the Common Shares of such Person are not and have not been so
registered and such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Shares of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate market value; and (3)
if the Common Shares of such Person are not and have not been so registered and
such Person is owned, directly or indirectly, by a joint venture formed by two
or more Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
Subsidiary of both or all of such joint venturers and the Principal Parties in
each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized Common
Shares which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed in
accordance with their terms and that such Section 13 Event shall not result in a
default by the Principal Party under this Agreement as the same shall have been
assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof and
further providing that, as soon as practicable after the date of such Section 13
Event, the Principal Party will:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date and to similarly comply with applicable state
securities laws;
(ii) use its best efforts to list or obtain quotation
of (or continue the listing or quotation of) the Rights and the
securities purchasable upon exercise of the Rights on a national
securities exchange or automated quotation service;
- 21 -
(iii) will deliver to holders of the Rights
historical financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the Exchange Act;
and
(iv) use its best efforts to obtain waivers of any
rights of first refusal or preemptive rights in respect of the Common
Shares of the Principal Party subject to purchase upon exercise of
outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraph (x) or (y) of Section 13(a) if (i) such transaction is consummated
with a Person or Persons (or a wholly owned subsidiary of any such Person or
Persons) who acquired Common Shares of the Company pursuant to a tender offer or
exchange offer for all outstanding Common Shares of the Company which complies
with the exception provided for in Section 11(a)(ii) hereof, (ii) the price per
Common Shares of the Company offered in such transaction is not less than the
price per Common Share paid to all holders of Common Shares of the Company whose
shares were purchased pursuant to such tender offer or exchange offer and (iii)
the form of consideration being offered to the remaining holders of Common
Shares pursuant to such transaction is the same as the form of consideration
paid pursuant to such tender offer or exchange offer. Upon consummation of any
such transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(i)
hereof, or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by the Nasdaq National Market or the Nasdaq Stock Market 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 (with the concurrence of a majority of the Continuing Trustees). If
on any such date no such market maker is
- 22 -
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board (with the concurrence of a majority of the
Continuing Trustees) shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Shares) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Share (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share). In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one one-hundredth of a Preferred Share. For purposes of this Section
14(b), the current market value of one one-hundredth of a Preferred Share shall
be one one-hundredth of the closing price of a Preferred Share or, if
unavailable, the appropriate alternative price (in each case as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of Common Shares of the Company
upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares of the Company. In lieu of fractional Common Shares of
the Company, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one (1) Common
Share of the Company. For purposes of this Section 14(c), the current market
value of one Common Share shall be the closing price of one Common Share or, if
unavailable, the appropriate alternative price (in each case as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares of the Company); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Shares of the
Company), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the Common Shares of
the Company), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obliga tions hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
- 23 -
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Shares of the
Company;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredths of a Preferred Share or any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights of
a shareholder of the Company or any right to vote for the election of trustees
or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any trust 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 Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
- 24 -
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document reasonably believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged by the proper Person or
Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. If at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and if at that time any of
the Rights Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases,
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases, such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of the Current Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be
- 25 -
conclusively proved and established by a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer or any Assistant
Treasurer 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
Rights Certificates, nor shall it be required to verify the same (except as to
its countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereon); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after 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 Common Shares or
Preferred Share to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Common Shares or Preferred Share will, when so
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
the Chairman of the Board, the President, any Vice President, the Treasurer or
any Assistant Treasurer of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect
- 26 -
or misconduct; provided, however, reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company, and to each transfer
agent of the Common Shares and Preferred Share, by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Shares and Preferred Share, by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then any registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. If no
successor Rights Agent shall have been appointed within 30 days from
effectiveness of such removal or resignation, and no registered holder of any
Rights Certificates have applied pursuant to this Agreement for the appointment
of a new Rights Agent, the Company shall be automatically designated as
successor Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of any state of the United
States so long as such corporation is authorized to do business as a banking
institution in such state, is in good standing, is authorized under such laws to
exercise corporate trust powers, is subject to supervision or examination by
federal or state authority and has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $100,000,000 or (b) an
Affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder and shall 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 the
Preferred Share and shall mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
- 27 -
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights Certificates to the contrary,
the Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by the Board to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares of the Company following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to Common Shares of the Company so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other ease, if deemed
necessary or appropriate by the Board, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) The Board may (following the Stock Acquisition Date, only
with the concurrence of a majority of the Continuing Trustees), at its option,
at any time prior to the earlier of (i) the Close of Business on the tenth
Business Day following the Stock Acquisition Date (or, if the Stock Acquisition
Date shall have occurred prior to the Record Date, the Close of Business on the
tenth Business Day following the Record Date) or (ii) the Final Expiration Date,
direct the Company to, and if so directed, the Company shall, redeem all but not
less than all of the then outstanding Rights at a redemption price of $0.01 per
Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired. The
Company may, at its option, pay the Redemption Price in cash, Common Shares of
the Company (based on the Current Market Price of the Common Shares at the time
of redemption) or any other form of consideration deemed appropriate by the
Board.
(b) Immediately upon the action of the Board (with, if
required, the concurrence of a majority of the Continuing Trustees) ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board ordering the redemption of the Rights,
the Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the Transfer Agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
- 28 -
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular quarterly cash dividend out of earnings
or retained earnings of the Company), or (ii) to offer to the holders of
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), or (iv) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend or distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up is to take place and the
date of participation therein by the holders of the Preferred Shares, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days prior to
the record date for determining holders of the shares of Preferred Shares for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Preferred Shares, whichever
shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Preferred Shares shall be deemed
thereafter to refer to Common Shares of the Company and/or, if appropriate,
other securities .
Section 25. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Hospitality Properties Trust
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
- 29 -
State Street Bank and Trust Company
c/o Boston EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
Common Shares of the Company) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Board so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing Common Shares of the Company. From and after the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Board so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, (iii)
to shorten or lengthen any time period hereunder (which shortening or
lengthening, after the Stock Acquisition Date, shall require the concurrence of
a majority of such Continuing Trustees) or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an Affiliate or Associate
of any such Person); provided, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence (A) a time period
relating to when the Rights may be redeemed or to modify the ability (or
inability of the Board (with, where required, the concurrence of a majority of
the Continuing Trustees) to redeem the Rights, in either case at such time as
the Rights are not then redeemable or (B) any other time periods unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of any such Person). Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
26, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final Expiration Date, the
Purchase Price or the number of one one-hundredths of a share of Preferred
Shares for which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Shares of the Company.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board etc. For all
purposes of this Agreement, any calculation of the number of Common Shares of
the Company outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares of the
Company 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
- 30 -
the Exchange Act. The Board (with, where specifically provided for herein, the
concurrence of Continuing Trustees) shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the
concurrence of Continuing Trustees) 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 (a) interpret the provisions of this Agreement and (b)
make all determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the Rights or
to amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board (with, where
specifically provided for herein, the concurrence of Continuing Trustees), the
Continuing Trustees, the Outside Trustees or the Company in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties and (y) not subject the Board, the
Continuing Trustees or the Outside Trustees to any liability to the holders of
the Rights.
Section 29. Exchange.
(a) The Board (with the concurrence of the Continuing
Trustees) may, at its option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the provision
of Section 7(e) hereof) for Common Shares of the Company at an exchange ratio of
one Common Share of the Company per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board shall not be empowered to
effect such exchange at any time after any Person (other than an Exempt Person)
becomes the Beneficial Owner of 50% or more of the Common Shares of the Company
then outstanding.
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to paragraph (a) of this Section 29 and without
any further action and without notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of Common Shares of the Company equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the Transfer Agent for the Common Shares. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares of the Company for Rights will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 29, the Company,
at its option, may substitute Preferred Shares (or Equivalent Preferred Shares,
as such term is defined in Section 11(b) hereof) for Common Shares of the
Company exchangeable for Rights, at the initial rate of one one-hundredth of a
Preferred Share (or Equivalent Preferred Share) for each Common Share of the
Company, as appropriately adjusted to reflect adjustment in the voting rights of
the Preferred Shares pursuant to Exhibit A hereto, so that the fraction of a
share of Preferred Stock delivered in lieu of each
- 31 -
Common Share of the Company shall have the same voting rights as one Common
Share of the Company.
(d) In the event that there shall not be sufficient Common
Shares of the Company issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
29, the Company shall take all such action as may be necessary to authorize
additional Common Shares of the Company for issuance upon exchange of the
Rights.
(e) The Company shall not be required to issue fractions of
Common Shares of the Company or to distribute certificates which evidence
fractional Common Shares of the Company. In lieu of such fractional Common
Shares of the Company, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Common Shares of the
Company would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share of the Company. For the
purposes of this paragraph (e), the current market value of a whole Common Share
of the Company shall be the closing price of a Common Share of the Company or,
if unavailable, the appropriate alternative price (in each case as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date on which the Board takes action ordering an exchange pursuant to this
Section 29.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Shares of the Company) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Shares of the Company).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board (with the
concurrence of a majority of the Continuing Trustees) determines in its good
faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth Business Day following the date
of such determination by the Board. Without limiting the foregoing, if any
provision of this Agreement requiring that a determination be made by the Board
with the concurrence of a majority of the Continuing Trustees or by the
Continuing Trustees or the Outside Trustees is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, such
determination shall then be made by the Board in accordance with applicable law
and the Company's Declaration of Trust (as the same may be amended and restated
from time to time) and Bylaws.
Section 32. Governing Law. Except as required by the law of the State
of Maryland governing Maryland real estate investment trusts, this Agreement,
each Right and each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the Commonwealth of Massachusetts and shall for
all purposes be governed by and construed in accordance with the laws of
Massachusetts applicable to contracts made and to be performed entirely
- 32 -
within Massachusetts, including Massachusetts principles of conflicts of law.
The rights and duties of the Rights Agent hereunder shall be governed by the
laws of the Commonwealth of Massachusetts, including its principles of conflicts
of law.
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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed under seal as of the day and year first above
written.
Attest: HOSPITALITY PROPERTIES TRUST
By: /s/ Xxxxxxxxx X. Xxxxxxxxxx By: /s/ Xxxx X. Xxxxxx
Name: Xxxxxxxxx X. Xxxxxxxxxx Name: Xxxx X. Xxxxxx
Title: Assistant Secretary Title: President
Attest: STATE STREET BANK AND TRUST COMPANY,
as Rights Agent
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxx Xxxxxxx Name: Xxxxxxx Xxxxx
Title: Legal Product Manager Title: Vice President
- 33 -
Exhibit A
HOSPITALITY PROPERTIES TRUST
ARTICLES SUPPLEMENTARY
HOSPITALITY PROPERTIES TRUST, a Maryland real estate investment trust,
having its principal office in Baltimore City, Maryland (hereinafter called the
"Trust"), hereby certifies to the State Department of Assessments and Taxation
of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Trustees
by Article V, Section 5.1 of the Amended and Restated Declaration of Trust of
the Trust, dated August 21, 1995, as amended, (the "Declaration"), the Board of
Trustees has duly reclassified 1,000,000 unissued Preferred Shares, of the Trust
(from among the 100,000,000 Preferred Shares, without par value, of the Trust
which are authorized) into 1,000,000 Junior Participating Preferred Shares, par
value $.01 per share, of the Trust.
SECOND: The terms (including preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption) of the Junior Participating Preferred Shares,
par value $.01 per share, are as follows:
1. Designation and Amount. The shares of such series shall be
designated as "Junior Participating Preferred Shares" and the number of shares
constituting such series shall be 1,000,000.
2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Shares ranking prior and superior
to the Junior Participating Preferred Shares with respect to dividends
(if any), the holders of Junior Participating Preferred Shares shall be
entitled to receive, when, as and if declared by the Board out of funds
legally available for the purpose, quarterly dividends payable in cash
on the 15th day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a Junior Participating Preferred Share or
fraction thereof, in an amount per share (rounded to the nearest cent)
equal to the greater of (X) $5 or (Y) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, plus 100 times the aggregate per share
amount (payable in kind) of all noncash dividends or other
distributions, other than a dividend payable in common shares of
beneficial interest, par value $.01 per share, of the Trust (the
"Common Shares") or a subdivision of the outstanding Common Shares (by
reclassification or otherwise), declared on the Common Shares, since
the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any Junior Participating Preferred Share or fraction
thereof. In the event the Trust shall at any time after May 20, 1997
(the "Rights Declaration Date") (i) declare any
dividend on Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares or (iii) combine the outstanding Common
Shares into a smaller number of shares, then in each such case the
amount to which holders of shares of Junior Participating Preferred
Shares were entitled immediately prior to such event under clause (Y)
of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which
is the number of Common Shares that were outstanding immediately prior
to such event.
(b) The Board shall declare a dividend or distribution on the
Junior Participating Preferred Shares as provided in paragraph (a)
above immediately after it declares a dividend or distribution on the
Common Shares (other than a dividend payable in Common Shares);
provided that, in the event no dividend or distribution shall have been
declared on the Common Shares during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $5 per share on the Junior Participating
Preferred Shares shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding Junior Participating Preferred Shares from the Quarterly
Dividend Payment Date next preceding the date of issue of such Junior
Participating Preferred Shares unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for
the determination of holders of Junior Participating Preferred Shares
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the Junior Participating Preferred Shares in an amount less
than the total amount of such dividends at the time accrued and payable
on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board may fix a
record date for the determination of holders of Junior Participating
Preferred Shares entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not less than
10 and not more than 60 days prior to the date fixed for the payment
thereof.
3. Voting Rights. The holders of Junior Participating Preferred Shares
shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each Junior Participating Preferred Share shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Trust. In the event that the Board shall at any
time after the Rights Declaration Date (i) declare any dividend on
Common Shares payable in Common Shares, (ii) subdivide the outstanding
Common Shares or (iii) combine the outstanding Common Shares into a
smaller number of shares, then in each such case the number of votes
per share to which holders of Junior Participating Preferred Shares
were entitled immediately prior to such event shall be adjusted by
multiplying such number by a
-2-
fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which
is the number of Common Shares that were outstanding immediately prior
to such event.
(b) Except as otherwise provided herein or by law, the holders
of Junior Participating Preferred Shares and the holders of Common
Shares shall vote together as one class on all matters submitted to a
vote of shareholders of the Trust.
(c) (i) If at any time dividends on any Junior
Participating Preferred Shares shall be in
arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence
of such contingency shall xxxx the beginning
of a period (a "Default Period") which shall
extend until such time when all accrued and
unpaid dividends for all previous quarterly
dividend periods and for the current
quarterly dividend period on all Junior
Participating Preferred Shares then
outstanding shall have been declared and
paid or set apart for payment. During each
Default Period, all holders of Preferred
Shares (including holders of the Junior
Participating Preferred Shares) with
dividends in arrears in an amount equal to
six (6) quarterly dividends thereon, voting
as a class, irrespective of series, shall
have the right to elect two (2) Trustees.
(ii) During any Default Period, such voting right
of the holders of Junior Participating
Preferred Shares may be exercised initially
at a special meeting called pursuant to
subparagraph (iii) of this Section 3(c) or
at an annual meeting of shareholders, and
thereafter at annual meetings of
shareholders, provided that neither such
voting right nor the right of the holders of
any other series of Preferred Shares, if
any, to increase, in certain cases, the
authorized number of Trustees shall be
exercised unless the holders of ten percent
(10%) in number of Preferred Shares
outstanding shall be present in person or by
proxy. The absence of a quorum of the
holders of Common Shares shall not affect
the exercise by the holders of Preferred
Shares of such voting right. At any meeting
at which the holders of Preferred Shares
shall exercise such voting right initially
during an existing Default Period, they
shall have the right, voting as a class, to
elect Trustees to fill up to two (2)
vacancies, if any, in the Board or, if such
right is exercised at an annual meeting, to
elect two (2) Trustees. The holders of
Preferred Shares shall have the right to
make such increase in the number of Trustees
as shall be necessary to permit the election
by them at any special meeting of two (2)
Trustees. After the holders of Preferred
Shares shall have exercised their right to
elect Trustees in any Default Period and
during the continuance of such period, the
number of Trustees shall not be increased or
decreased except by vote of the holders of
Preferred Shares as herein provided or
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pursuant to the rights of any equity
securities ranking senior to or pari passu
with the Junior Participating Preferred
Shares, if any.
(iii) Unless the holders of Preferred Shares
shall, during an existing Default Period,
have previously exercised their right to
elect Trustees, the Board may order, or any
shareholder or shareholders owning in the
aggregate not less than ten percent (10%) of
the total number of Preferred Shares
outstanding, irrespective of series, may
request, the calling of a special meeting of
the holders of Preferred Shares, which
meeting shall thereupon be called by the
Board or the Chief Operating Officer of the
Trust. The Secretary of the Trust shall give
notice of such meeting and of any annual
meeting at which holders of Preferred Shares
are entitled to vote pursuant to this
paragraph (c)(iii) to each holder of record
of Preferred Shares by mailing a copy of
such notice to him at his last address as
the same appears on the books of the Trust.
Such meeting shall be called for a time not
earlier than fifteen (15) days and not later
than sixty (60) days after such order or
request. If such meeting is not called
within sixty (60) days after such order or
request, such meeting may be called on
similar notice by any shareholder or
shareholders owning in the aggregate not
less than ten percent (10%) of the total
number of Preferred Shares outstanding.
Notwithstanding the provisions of this
paragraph (c)(iii), no such special meeting
shall be called during the period within
sixty (60) days immediately preceding the
date fixed for the next annual meeting of
the shareholders.
(iv) In any Default Period, the holders of Common
Shares, and (if applicable) other classes of
Shares of beneficial interest of the Trust
(all Trust shares being referred to as
"Shares"), shall continue to be entitled to
elect the whole number of Trustees until the
holders of Preferred Shares shall have
exercised their rights to elect two (2)
Trustees voting as a class, after the
exercise of which right, (X) the Trustees so
elected by the holders of Preferred Shares
shall continue in office until their
successors shall have been elected by such
holders or until the expiration of the
Default Period, and (Y) any vacancy in the
Board shall (except as provided in paragraph
(c)(ii) of this Section 3) be filled by vote
of a majority of the remaining Trustees
theretofore elected by the holders of the
class or classes of Shares which elected the
Trustee whose office shall have become
vacant. References in this paragraph (c) to
Trustees elected by the holders of a
particular class of Shares shall include
Trustees elected by such Trustees to fill
vacancies as provided in clause (Y) of the
foregoing sentence.
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(v) Immediately upon the expiration of a Default
Period, (X) the right of the holders of
Preferred Shares as a class to elect
Trustees shall cease, (Y) the term of any
Trustees elected by the holders of Preferred
Shares as a class shall terminate, and (Z)
the number of Trustees shall be such number
as may be provided for in the Declaration,
any Article Supplementary or the By-Laws of
the Trust, irrespective of any increase made
pursuant to the provisions of paragraph
(c)(ii) of this Section 3 such number being
subject, however, to change thereafter in
any manner provided by law, or in the
Declaration, any Article Supplementary or
the By-Laws of the Trust). Any vacancies in
the Board effected by the provisions of
clauses (Y) and (Z) in the preceding
sentence may be filled by a majority of the
remaining Trustees.
(d) Except as set forth herein, holders of Junior
Participating Preferred Shares shall have no special voting rights and
their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Shares as set forth herein) for
taking any trust action.
4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Junior Participating Preferred Shares as
provided in Section 2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on
Junior Participating Preferred Shares outstanding shall have been paid
in full, the Trust shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or
otherwise acquire for consideration any
Shares ranking junior (either as to
dividends or upon liquidation, dissolution
or winding up) to the Junior Participating
Preferred Shares;
(ii) declare or pay dividends on or make any
other distributions on any Shares ranking on
a parity (either as to dividends or upon
liquidation, dissolution or winding up) with
the Junior Participating Preferred Shares
except dividends paid ratably on the Junior
Participating Preferred Shares and all such
parity Shares on which dividends are payable
or in arrears in proportion to the total
amounts to which the holders of all such
Shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration Shares ranking on a parity
(either as to dividends or upon liquidation,
dissolution or winding up) with the Junior
Participating Preferred Shares provided that
the Trust may at any time redeem, purchase
or otherwise acquire any such parity Shares
in exchange for any Shares ranking junior
(either as to dividends or upon dissolution,
liquidation or winding up) to the Junior
Participating Preferred Shares;
-5-
(iv) purchase or otherwise acquire for
consideration any Junior Participating
Preferred Shares, or any Shares ranking on a
parity with the Junior Participating
Preferred Shares, except pursuant to Section
8 or in accordance with a purchase offer
made in writing or by publication (as
determined by the Board) to all holders of
such shares upon such terms as the Board,
after consideration of the respective annual
dividend rates and other relative rights and
preferences of the respective series and
classes, shall determine in good faith will
result in fair and equitable treatment among
the respective series or classes.
(b) The Trust shall not permit any subsidiary of the Trust to
purchase or otherwise acquire for consideration any Shares of the Trust
unless the Trust could, under paragraph (a) of this Section 4, purchase
or otherwise acquire such shares at such time and in such manner.
5. Required Shares. Any Junior Participating Preferred Shares,
purchased or otherwise acquired by the Trust in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued Preferred Shares
and may be reissued as part of a new series of Preferred Shares to be created by
resolution or resolutions of the Board, subject to the conditions and
restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Trust, no distribution shall be made to the
holders of Shares ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior Participating
Preferred Shares, unless, prior thereto, the holders of Junior
Participating Preferred Shares shall have received $100.00 per share,
plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the
"Liquidation Preference"). Following the payment of the full amount of
the Liquidation Preference, no additional distributions shall be made
to the holders of Junior Participating Preferred Shares, unless, prior
thereto, the holders of Common Shares shall have received an amount per
share (the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Liquidation Preference by (ii) 100 (as appropriately
adjusted as set forth in subparagraph (c) below to reflect such events
as stock splits, stock dividends and recapitalization with respect to
the Common Shares) (such number in clause (ii) immediately above being
referred to as the "Adjustment Number"). Subject to the rights of any
other series of Preferred Shares then outstanding, if any, following
the payment of the full amount of the Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Junior
Participating Preferred Shares and Common Shares, respectively, holders
of Junior Participating Preferred Shares and holders of shares of
Common Shares shall receive their ratable and proportionate share of
the remaining assets to be distributed in the
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ratio of the Adjustment Number to one (1) with respect to such Junior
Participating Preferred Shares and Common Shares, on a per Share basis,
respectively.
(b) In the event, however, that there are not sufficient
assets available to permit payment in full of the Liquidation
Preference and the liquidation preferences of all other series of
Preferred Shares, if any, which rank on a parity with the Junior
Participating Preferred Shares, then such remaining assets shall be
distributed ratably to the holders of such parity Shares (including the
Junior Participating Preferred Shares) in proportion to their
respective liquidation preferences. In the event, however, that there
are not sufficient assets available to permit payment in full of the
Common Adjustment after satisfaction of the liquidation preferences of
all series of Preferred Shares, if any, then such remaining assets
shall be distributed ratably to the holders of Common Shares.
(c) In the event the Trust shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares or (iii)
combine the outstanding Common Shares into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately
prior to such event shall be adjusted by multiplying such Adjustment
Number by a fraction the numerator of which is the number of Common
Shares outstanding immediately after such event and the denominator of
which is the number of shares of Common Shares that were outstanding
immediately prior to such event.
7. Consolidation, Merger, etc. In case the Trust shall enter into any
consolidation, merger, combination or other transaction in which the Common
Shares are exchanged for or changed into other stock or securities, cash or any
other property, then in any such case the Junior Participating Preferred Shares
shall at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of shares, securities, cash or any other property
(payable in kind), as the case may be, into which or for which each Common Share
is changed or exchanged. In the event the Trust shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares or (iii) combine the
outstanding Common Shares into a smaller number of Shares, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of Junior Participating Preferred Shares shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such event and the denominator of
which is the number of Common Shares that were outstanding immediately prior to
such event.
8. Redemption. The Junior Participating Preferred Shares shall not be
redeemable.
9. Ranking. The Junior Participating Preferred Shares shall rank junior
to all other series of the Trust's Preferred Shares as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
10. Amendment. At such time as Junior Participating Preferred Shares
are outstanding, the Declaration shall not be amended, nor shall an Article
Supplementary of the Trust be filed or amended, in any manner which would
materially alter or change the powers, preferences or special
-7-
rights of the Junior Participating Preferred Shares so as to affect them
adversely without the affirmative vote of the holders of a majority or more of
the outstanding Junior Participating Preferred Shares voting separately as a
class.
11. Fractional Shares. Junior Participating Preferred Shares may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of a
holder of Junior participating Preferred Shares.
IN WITNESS WHEREOF, HOSPITALITY PROPERTIES TRUST has caused these
Articles Supplementary to be signed in its name and on its behalf by a majority
of its entire Board of Trustees and witnessed by its Secretary on May___, 1997.
WITNESS: HOSPITALITY
PROPERTIES TRUST
__________________________ By:_____________________________
Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Trustee
Secretary
By:_____________________________
Xxxxx X. Xxxxxxx, Trustee
By:_____________________________
Xxxxxxx X. Xxxxxxx, Trustee
-8-
THE UNDERSIGNED, President of HOSPITALITY PROPERTIES TRUST, with
respect to the foregoing Articles Supplementary of which this Certificate is
made a part, hereby acknowledges in the name and on behalf of said Trust, the
foregoing Articles Supplementary to be the act of said Trust and hereby
certifies that the matters and facts set forth herein with respect to the
authorization and approval thereof are true in all material respects under the
penalties of perjury.
------------------------------
Xxxx X. Xxxxxx, President
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Exhibit B
SUMMARY OF RIGHTS
TO PURCHASE PREFERRED SHARES
On May 20, 1997, the Board of Trustees of Hospitality Properties Trust
(the "Company") declared a dividend distribution of one right for each of the
Company's outstanding common shares of beneficial interest, par value $.01 per
share (the "Common Shares"), to holders of record of the Common Shares at the
close of business on June 20, 1997. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a preferred share of beneficial
interest, par value $.01 per share, of the Company (the "Preferred Shares") or
in certain circumstances, to receive cash, property, Common Shares or other
securities of the Company, at a Purchase Price of $60 per one one-hundredth of a
Preferred Share, subject to adjustment (the "Rights"). The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and State Street Bank and Trust Company, as Rights Agent.
Initially, the Rights will be attached to all certificates representing
the Common Shares and no separate Rights Certificates will be distributed. The
Rights will separate from the Common Shares and a Distribution Date will occur
upon the earlier of (i) 10 business days (or such later date as the Company's
Board of Trustees may determine before a Distribution Date occurs) following a
public announcement by the Company that a person or group of affiliated or
associated persons, with certain exceptions (an "Acquiring Person"), has
acquired, or has obtained the right to acquire, beneficial ownership of 10% or
more of the outstanding Common Shares (the date of such announcement being the
"Share Acquisition Date") or (ii) 10 business days (or such later date as the
Company's Board of Trustees may determine before a Distribution Date occurs)
following the commencement of a tender offer or exchange offer that would result
in a person becoming an Acquiring Person.
Until the Distribution Date, (i) the Rights will be evidenced by the
certificates for Common Shares and will be transferred with and only with such
Common Share certificates, (ii) Common Share certificates will contain a
notation incorporating the Rights Agreement by reference, and (iii) the
surrender for transfer of any certificates for Common Shares outstanding will
also constitute the transfer of the Rights associated with the Common Shares
represented by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on May 31, 2007, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and, from and after the Distribution Date, the
separate Rights Certificates alone will represent the Rights.
In the event (a "Flip-In Event") a Person becomes an Acquiring Person
(except pursuant to a tender or exchange offer for all outstanding Common Shares
at a price and on terms which a
majority of the Company's Outside Trustees (as defined in the Rights Agreement)
determines to be fair to and otherwise in the best interests of the Company and
its shareholders (a "fair offer")), each holder of a Right will thereafter have
the right to receive, upon exercise of such Right, Common Shares (or, in certain
circumstances, cash, property or other securities of the Company) having a
Current Market Price (as defined in the Rights Agreement) equal to two times the
exercise price of the Right. Notwithstanding the foregoing, following the
occurrence of any Flip-In Event, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person (or by certain related parties) will be null and void in the
circumstances set forth in the Rights Agreement. However, Rights will not be
exercisable following the occurrence of any Flip-In Event until such time as the
Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $100 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following a Flip-In
Event would entitle its holder to purchase $200 worth of Common Shares (or other
consideration, as noted above) for $100.
In the event (a "Flip-Over Event") that, at any time on or after the
Share Acquisition Date, (i) the Company shall take part in a merger or other
business combination transaction (other than certain mergers that follow a fair
offer) and the Company shall not be the surviving entity or (ii) the Company
shall take part in a merger or other business combination transaction in which
the Common Shares are changed or exchanged (other than certain mergers that
follow a fair offer) or (iii) 50% or more of the Company's assets or earning
power is sold or transferred, each holder of a Right (except Rights which
previously have been voided, as set forth above) shall thereafter have the right
to receive, upon exercise, a number of shares of common stock of the acquiring
company having a Current Market Price equal to two times the exercise price of
the Right. Flip-In Events and Flip-Over Events are collectively referred to as
"Triggering Events."
The Purchase Price payable and the number of Preferred Shares (or the
amount of cash, property or other securities) issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a share dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) if holders of the Preferred
Shares are granted certain rights or warrants to subscribe for Preferred Shares
or convertible securities at less than the Current Market Price of the Preferred
Shares or (iii) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Preferred Shares upon the
exercise of any Right or Rights evidenced hereby. In lieu thereof, a cash
payment may be made, as provided in the Rights Agreement.
At any time until 10 business days following the Share Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right, payable, at the option of the Company, in cash, Common Shares or
other consideration as the Board of Trustees may determine. Immediately upon the
effectiveness of the action of the Company's Board of
-2-
Trustees ordering redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the $.01 per Right
redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Shares (or cash, property or other securities) of the
Company or for common stock of the acquiring company as set forth above.
The terms of the Rights, other than key financial terms and the date on
which the Rights expire, may be amended by the Board of Trustees of the Company
prior to the Distribution Date. Thereafter, the provisions of the Rights
Agreement may be amended by the Board of Trustees only in order to cure any
ambiguity, defect or inconsistency, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person and certain other related parties) or to shorten or lengthen
any time period under the Rights Agreement; provided, however, that no amendment
to lengthen the time period governing redemption shall be made at such time as
the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
May 30, 1997. A copy of the Rights Agreement is available free of charge from
the Company or the Rights Agent. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
-3-
Exhibit C
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER MAY 31, 2007 OR EARLIER IF REDEEMED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON. ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1
Rights Certificate
HOSPITALITY PROPERTIES TRUST
This certifies that __________________________, or his or her
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 May 20, 1997 (the
"Rights Agreement"), by and between Hospitality Properties Trust, a Maryland
real estate investment trust (the "Company"), and State Street Bank and Trust
Company, a Massachusetts trust company (the "Rights Agent"), to purchase from
the Company at any time prior to 5:00 P.M. (New York City time), on May 31, 2007
at the office or offices of the Rights Agent designed for such purpose, or at
the office or offices of its successors as Rights Agent, one one-hundredth of a
fully paid, nonassesable, Junior Participating Preferred Share of beneficial
interest, par value $.01 per share, of the Company (the "Preferred Shares"), or
in certain circumstances, to receive cash, property, Common Shares or other
securities of the Company, at a purchase price of $100 (the "Purchase Price"),
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of Preferred Shares which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
set forth
--------
1 The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
above, are the number of Rights and the Purchase Price as of November 7, 1994,
respectively, based on the Preferred Shares as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person (as such terms are defined in the Rights
Agreement) which is determined to have been involved in, caused or facilitated
such Section 11(a)(ii) Event, (ii) a transferee of any such Acquiring Person,
Associate or Affiliate who becomes a transferee after such Acquiring Person,
Associate or Affiliate becomes such or (iii) under certain circumstances
specified in the Rights Agreement a transferee of any such Acquiring Person,
Associate or Affiliate who becomes a transferee prior to or concurrently with
such Acquiring Person becoming such, such Rights shall become null and void and
no holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Preferred Shares (or the amount of cash, property, Common Shares or
other securities) deliverable upon such exercise of the Rights evidenced by this
Rights Certificate are subject to modification and adjustment upon the happening
of certain events, including those events specified in Section 11(a)(ii) and
Section 13 of the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the offices of the Rights Agent
and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Preferred Shares as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at a redemption price of $.01
per Right at any time prior to the earlier of the close of business on (i) the
tenth business day following the first date of public announcement by the
Company that an Acquiring Person has become such (or if the date of such
announcement shall have occurred prior to May 20, 1997, the close of business on
the tenth business day following May 20, 1997) and (ii) the close of business on
May 31, 2007.
-2-
The Company is not required to issue fractional Preferred Shares upon
the exercise of any Right or Rights evidenced hereby. In lieu thereof, a cash
payment may be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose to be the holder of
Preferred Shares, Common Shares or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any trust 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 Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its seal.
Dated as of __________________.
HOSPITALITY PROPERTIES TRUST
ATTEST:
By:__________________________________
________________________ [Name]
[Name] [Title]
Secretary
Countersigned:
[Rights Agent]
By:_____________________
-3-
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _______________________________________ hereby
sells, assigns and transfers unto
---------------------------------------------------------------
(Please print name and address of transferee)
---------------------------------------------------------------
this Rights Certificate, together with all rights, title and interest therein,
and does hereby irrevocably constitute and appoint ________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated:______________________
------------------------------
Signature
Signature Guaranteed:
-4-
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate |_| is |_| is not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Person (as such
terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it |_| did |_| did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated:______________________
------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Form of Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
-5-
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires
to exercise Rights represented by the Rights Certificate.)
TO: HOSPITALITY PROPERTIES TRUST
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Rights Certificate to purchase the Preferred Shares
issuable upon the exercise of the Rights (or Common Shares or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number:_______________________
----------------------------------------------------------------
(Please print name and address)
----------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced
by this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:_______________________
----------------------------------------------------------------
(Please print name and address)
----------------------------------------------------------------
Dated:______________________
------------------------------
Signature
Signature Guaranteed:
-6-
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate |_| are
|_| are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it |_| did |_| did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated:______________________
------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Form of Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
-7-
