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EXHIBIT 4.2
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
_______________, 2001
between
L & C SPINCO, INC.
and
XXXXX FARGO BANK MINNESOTA, N.A.,
as Rights Agent
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
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ARTICLE I CERTAIN DEFINITIONS................................................................... 2
1.1 Certain Definitions................................................................... 2
ARTICLE II THE RIGHTS............................................................................ 9
2.1 Legend on Common Stock Certificates................................................... 9
2.2 Exercise of Rights; Separation of Rights.............................................. 10
2.3 Adjustments to Exercise Price; Number of Rights....................................... 13
2.4 Date on Which Exercise is Effective................................................... 15
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates................. 16
2.6 Registration, Registration of Transfer and Exchange................................... 16
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates............................. 18
2.8 Persons Deemed Owners................................................................. 19
2.9 Delivery and Cancellation of Certificates............................................. 19
2.10 Agreement of Rights Holders........................................................... 20
ARTICLE III ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS........................ 21
3.1 Flip-in............................................................................... 21
3.2 Flip-over............................................................................. 24
ARTICLE IV THE RIGHTS AGENT...................................................................... 25
4.1 General............................................................................... 25
4.2 Merger or Consolidation or Change of Name of Rights Agent............................. 27
4.3 Duties of Rights Agent................................................................ 28
4.4 Change of Rights Agent................................................................ 31
ARTICLE V MISCELLANEOUS......................................................................... 32
5.1 Redemption............................................................................ 32
5.2 Expiration............................................................................ 33
5.3 Issuance of New Rights Certificates................................................... 33
5.4 Supplements and Amendments............................................................ 34
5.5 Fractional Shares..................................................................... 35
5.6 Rights of Action...................................................................... 35
5.7 Holder of Rights Not Deemed a Stockholder............................................. 36
5.8 Notice of Proposed Actions............................................................ 36
5.9 Notices............................................................................... 36
5.10 Suspension of Exercisability.......................................................... 38
5.11 Costs of Enforcement.................................................................. 38
5.12 Successors............................................................................ 38
5.13 Benefits of this Agreement............................................................ 38
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5.14 Determination and Actions by the Board of Directors, etc.............................. 39
5.15 Descriptive Headings.................................................................. 39
5.16 GOVERNING LAW......................................................................... 39
5.17 Counterparts.......................................................................... 39
5.18 Severability.......................................................................... 40
EXHIBITS
Exhibit A Form of Rights Certificate (Together with Form of Election to
Exercise)
Exhibit B Form of Article IV. C to Restated Certificate of Incorporation
of L & C Spinco, Inc. (setting forth terms of Participating
Preferred Stock)
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time
to time, this "Agreement"), dated as of ____________, between L & C Spinco,
Inc., a Delaware corporation (the "Company"), and Xxxxx Fargo Bank Minnesota,
N.A., as Rights Agent (the "Rights Agent", which term shall include any
successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (a)
authorized and declared a dividend of one right ("Right") in respect of each
share of Common Stock (as hereinafter defined) held of record as of the Close of
Business on ________, 2001 (the "Record Time") and (b) as provided in Section
2.3, authorized the issuance of one Right in respect of each share of Common
Stock issued on or after the date hereof and prior to the Separation Time (as
hereinafter defined) and, to the extent provided in Section 5.3, each share of
Common Stock issued after the Separation Time;
WHEREAS, subject to the terms and conditions hereof, each
Right entitles the holder thereof, after the Separation Time, to purchase
securities or assets of the Company (or, in certain cases, securities of certain
other entities) pursuant to the terms and subject to the conditions set forth
herein; and
WHEREAS, the Company desires to appoint the Rights Agent to
act on behalf of the Company, and the Rights Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates (as hereinafter defined), the exercise of Rights and other matters
referred to herein;
NOW THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree as follows:
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ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person, together with all
Affiliates and Associates of such Person, who is or becomes the Beneficial Owner
of 15% or more of the outstanding shares of Common Stock after the effective
date of the distribution of shares of Common Stock by National Service
Industries, Inc. ("Parent") as contemplated by the Agreement and Plan of
Distribution, dated as of _______, 2001, between Parent and the Company;
provided, however, that the term "Acquiring Person" shall not include any Person
(i) who is the Beneficial Owner of 15% or more of the outstanding shares of
Common Stock on the date of this Agreement or who shall become the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock solely as a
result of an acquisition by the Company of shares of Common Stock, until such
time hereafter or thereafter as any of such Persons shall become the Beneficial
Owner (other than by means of a stock dividend or stock split) of any additional
shares of Common Stock, or (ii) who becomes the Beneficial Owner of 15% or more
of the outstanding shares of Common Stock but who acquired Beneficial Ownership
of shares of Common Stock without any plan or intention to seek or affect
control of the Company, if such Person promptly divests, or enters into an
agreement with the Company satisfactory to the Company, in its sole discretion,
to divest, and thereafter promptly divests (without exercising or retaining any
power, including voting power, with respect to such shares), sufficient shares
of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) so that such Person ceases to be the Beneficial
Owner of 15% or more of the outstanding
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shares of Common Stock. In addition, the Company, any Subsidiary of the Company
and any employee stock ownership or other employee benefit plan of the Company
or a Subsidiary of the Company (or any entity or trustee holding shares of
Common Stock for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of the
Company or of any Subsidiary of the Company) or any Person organized, appointed
or established by the Company for or pursuant to the terms of any such plan
shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act, as such Rule is
amended and in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Exchange Act, as such Rules are amended and in effect on the date of this
Agreement, as well as any securities as to which such Person or any of such
Person's Affiliates or Associates, directly or indirectly, has the right to
become Beneficial Owner (whether such right is exercisable immediately or only
after the passage of time or the occurrence of conditions) pursuant to any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the "Beneficial
Owner", or to have "Beneficial Ownership" of, or to "Beneficially Own", any
security (i) solely because such security has been tendered pursuant to a
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tender or exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered security is accepted for payment or exchange
or (ii) solely because such Person or any of such Person's Affiliates or
Associates has or shares the power to vote or direct the voting of such security
pursuant to a revocable proxy given in response to a public proxy or consent
solicitation made to more than ten holders of shares of a class of stock of the
Company registered under Section 12 of the Exchange Act and pursuant to, and in
accordance with, the applicable rules and regulations under the Exchange Act,
except if such power (or the agreements, arrangements or understandings relating
thereto) is then reportable under Item 6 of Schedule 13D under the Exchange Act
(or any similar provision of a comparable or successor report). For purposes of
this Agreement, in determining the percentage of the outstanding shares of
Common Stock with respect to which a Person is the Beneficial Owner, all shares
as to which such Person is deemed the Beneficial Owner shall be deemed
outstanding.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in The City of New York are
generally authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 p.m. New
York City time on such date or, if such date is not a Business Day, 5:00 p.m.
New York City time on the next succeeding Business Day.
"Common Stock" shall mean the shares of Common Stock, par
value $0.01 per share, of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
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"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon exercise of one whole
Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal _______.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, and (iii) the Close of Business on the tenth
anniversary of the Record Time, unless extended by action of the Board of
Directors.
"Flip-in Date" shall mean any Stock Acquisition Date or such
later date and time as the Board of Directors of the Company may from time to
time fix by resolution adopted prior to the Flip-in Date that would otherwise
have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean
(i) in the case of a Flip-over Transaction or Event described in clause (i) of
the definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-over Transaction or Event and (ii) in
the case of a Flip-over Transaction or Event referred to in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the assets,
operating income or cash flow being transferred in such Flip-over Transaction or
Event, provided in all cases if such Person is a Subsidiary of a corporation,
the parent corporation shall be the Flip-Over Entity.
"Flip-over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or other Persons similarly responsible for direction of the business
and affairs) of the Flip-Over Entity.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions on or after a Flip-in Date in which, directly or
indirectly, (i) the Company shall consolidate with, or merge with and into, any
other Person, (ii) any Person shall consolidate with the Company, or
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merge with and into the Company, and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all or
part of the Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property,
or (iii) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets (A) aggregating more than 50% of the assets (measured by either book
value or fair market value) or (B) generating more than 50% of the operating
income or cash flow, of the Company and its Subsidiaries (taken as a whole) to
any Person (other than the Company or one or more of its wholly owned
Subsidiaries) or to two or more such Persons which are Affiliates or Associates
or otherwise acting in concert.
"Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date; provided,
however, that if any event described in Section 2.3 hereof, or any analogous
event, shall have caused the closing prices used to determine the Market Price
on any Trading Days during such period of 20 Trading Days not to be fully
comparable with the closing price on such date, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on any
date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange, Inc.
or, if the securities are not listed or admitted to trading on the New
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York Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or such other system then in use, or,
if on any such date the securities are not listed or admitted to trading on any
national securities exchange or quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the securities selected by the Board of Directors of the
Company; provided, however, that if on any such date the securities are not
listed or admitted to trading on a national securities exchange or traded in the
over-the-counter market, the closing price per share of such securities on such
date shall mean the fair value per share of securities on such date as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm, and set forth
in a certificate delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership, limited
liability company, association, group (as such term is used in Rule 13d-5 under
the Exchange Act, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
"Preferred Stock" shall mean the series of Participating
Preferred Stock, $.01 par value, of the Company created by Article IV.C of the
Restated Certificate of Incorporation in substantially the form set forth in
Exhibit B hereto appropriately completed.
"Redemption Price" shall mean an amount equal to one cent,
$0.01.
"Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1 hereof.
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"Separation Time" shall mean the earlier of (i) the Close of
Business on the tenth Business Day (or such later date as the Board of Directors
of the Company may from time to time fix by resolution adopted prior to the
Separation Time that would otherwise have occurred) after the date on which any
Person commences a tender or exchange offer which, if consummated, would result
in such Person's becoming an Acquiring Person and (ii) the Flip-in Date;
provided, that if any tender or exchange offer referred to in clause (i) of this
paragraph is canceled, terminated or otherwise withdrawn prior to the Separation
Time without the purchase of any shares of Common Stock pursuant thereto, such
offer shall be deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means, including, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act) that a Person has
become an Acquiring Person or the date on which any Person who has made a tender
or exchange offer for more than 15% of the outstanding shares of Common Stock
becomes an Acquiring Person by the purchase of shares pursuant to the tender or
exchange offer (or by any other means within 180 days following the expiration
of such tender or exchange offer).
"Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the equity or membership interest is
Beneficially Owned, directly or indirectly, by such Person or otherwise
controlled by such Person.
"Trading Day," when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed or admitted to
trading on the New York Stock Exchange, Inc., a day on
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which the principal national securities exchange on which such securities are
listed or admitted to trading is open for the transaction of business or, if
such securities are not listed or admitted to trading on any national securities
exchange, a Business Day.
ARTICLE II
THE RIGHTS
2.1 Legend on Common Stock Certificates. Certificates for
the Common Stock issued on or after the date of this Agreement but prior to the
Separation Time shall evidence one Right for each share of Common Stock
represented thereby and shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Stockholder Protection
Rights Agreement, dated as of ______, 2001 (as such may be amended from
time to time, the "Rights Agreement"), between L & C Spinco, Inc. (the
"Company") and Xxxxx Fargo Bank Minnesota, N.A., as Rights Agent, the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may become exercisable for securities or assets
of the Company or securities of another entity, may be exchanged for
shares of Common Stock or other securities or assets of the Company,
may expire, may become null and void (if they are "Beneficially Owned"
by an "Acquiring Person" or an "Affiliate" or "Associate" thereof, as
such terms are defined in the Rights Agreement, or by any transferee of
any of the foregoing) or may be evidenced by separate certificates and
may no longer be evidenced by this certificate. The Company will mail
or arrange for the mailing of a copy of the Rights Agreement to the
holder of this certificate without charge after the receipt of a
written request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
If the Common Stock issued after the Record Time but prior to the
Separation Time shall be uncertificated, the registration of such Common Stock
on the stock transfer books of the Company shall evidence one Right for each
share of Common Stock represented thereby and the
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Company will mail to every Person that holds such Common Stock a confirmation of
the registration of such Common Stock on the stock transfer books of the
Company, which confirmation will have impressed, printed, written or stamped
thereon or otherwise affixed thereto the above legend. The Company will mail or
arrange for the mailing of a copy of this Agreement to any Person that holds
Common Stock, as evidenced by the registration of the Common Stock in the name
of such Person on the stock transfer books of the Company, without charge after
the receipt of a written request therefor from such Person.
2.2 Exercise of Rights; Separation of Rights. (a) Subject
to Sections 3.1, 3.2, 5.1 and 5.10 and subject to adjustment as herein set
forth, each Right will entitle the holder thereof, on or after the Separation
Time and prior to the Expiration Time, to purchase, for the Exercise Price, one
one-hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be
exercised and (ii) each Right will be evidenced by the certificate for the
associated share of Common Stock (or, if the Common Stock shall be
uncertificated, by the registration of the associated Common Stock on the stock
transfer books of the Company) and will be transferable only together with, and
will be transferred by a transfer of, such associated share.
(c) Subject to the terms and conditions hereof, on or
after the Separation Time and prior to the Expiration Time, the Rights (i) may
be exercised and (ii) may be transferred independent of shares of Common Stock.
Promptly following the Separation Time and receipt by the Rights Agent of notice
thereof as well as other relevant information, the Rights Agent will mail to
each holder of record of Common Stock as of the Separation Time (other than any
Person whose Rights have become null and void pursuant to Section 3.1(b)), at
such holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish, or causing to be
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furnished, copies of such records to the Rights Agent for this purpose), (x) a
certificate (a "Rights Certificate") in substantially the form of Exhibit A
hereto appropriately completed, representing the number of Rights held by such
holder at the Separation Time and having such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate (which do not affect the duties or responsibilities
of the Rights Agent) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any national
securities exchange or quotation system on which the Rights may from time to
time be listed or traded, or to conform to usage, and (y) a disclosure statement
describing the Rights.
(d) Subject to the terms and conditions hereof, Rights
may be exercised on any Business Day on or after the Separation Time and prior
to the Expiration Time by submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an Election to Exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly and properly
completed, accompanied by payment in cash, or by certified or official bank
check or money order payable to the order of the Company, of a sum equal to the
Exercise Price multiplied by the number of Rights being exercised and a sum
sufficient to cover any tax or governmental charge which may be payable in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates (or, if uncertificated,
the registration on the stock transfer books of the Company) for shares or
depositary receipts (or both) in a name other than that of the holder of the
Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an
Election to Exercise accompanied by payment as set forth in Section 2.2(d), and
subject to the terms and conditions
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hereof, the Rights Agent will thereupon promptly (i)(A) requisition from the
transfer agent of the Company stock certificates evidencing such number of
shares or other securities to be purchased or, in the case of uncertificated
shares or other securities, requisition from the transfer agent of the Company a
notice setting forth such number of shares or other securities to be purchased
for which registration will be made on the stock transfer books of the Company
(the Company hereby irrevocably authorizing its transfer agents to comply with
all such requisitions) and (B) if the Company elects pursuant to Section 5.5 not
to issue certificates (or effect registration on the stock transfer books of the
Company) representing fractional shares, requisition from the depositary
selected by the Company depositary receipts representing the fractional shares
to be purchased or requisition from the Company the amount of cash to be paid in
lieu of fractional shares in accordance with Section 5.5 and (ii) after receipt
of such certificates, depositary receipts, notices and/or cash, deliver the same
to or upon the order of the registered holder of such Rights Certificate,
registered (in the case of certificates, depositary receipts or notices) in such
name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less
than all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i)
take all such action as may be necessary to ensure that all shares delivered (or
evidenced by registration on the stock transfer books of the Company) upon
exercise of Rights shall, at the time of delivery of the certificates (or
registration) for such shares (subject to payment of the Exercise Price), be
duly and validly authorized, executed, issued and delivered (or registered) and
fully paid and
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nonassessable; (ii) take all such action as may be necessary to comply with any
applicable requirements of the Securities Act of 1933, as amended, or the
Exchange Act, and the rules and regulations thereunder, and any other applicable
law, rule or regulation, in connection with the issuance of any securities upon
exercise of Rights; and (iii) pay when due and payable any and all federal and
state taxes and governmental charges which may be payable in respect of the
original issuance or delivery of the Rights Certificates or of any shares issued
upon the exercise of Rights, provided, that the Company shall not be required to
pay any tax or governmental charge which may be payable in respect of any
transfer involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates (or the registration) for shares in a name
other than that of the holder of the Rights being transferred or exercised.
2.3 Adjustments to Exercise Price; Number of Rights. (a)
In the event the Company shall at any time after the Record Time and prior to
the Separation Time (i) declare or pay a dividend on Common Stock payable in
Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares of Common Stock, (x)
the Exercise Price in effect after such adjustment will be equal to the Exercise
Price in effect immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of one share of
Common Stock immediately prior to such dividend, subdivision or combination
would hold thereafter as a result thereof and (y) each Right held prior to such
adjustment will become that number of Rights equal to the Expansion Factor, and
the adjusted number of Rights will be deemed to be distributed among the shares
of Common Stock with respect to which the original Rights were associated (if
they remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated
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with it. Each adjustment made pursuant to this paragraph shall be made as of the
payment or effective date for the applicable dividend, subdivision or
combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue any shares of Common Stock otherwise
than in a transaction referred to in the preceding paragraph, each such share of
Common Stock so issued shall automatically have one new Right associated with
it, which Right shall be evidenced by the certificate representing such share
(or, if the Common Stock shall be uncertificated, such Right shall be evidenced
by the registration of such Common Stock on the stock transfer books of the
Company). Rights shall be issued by the Company in respect of shares of Common
Stock that are issued or sold by the Company after the Separation Time only to
the extent provided in Section 5.3.
(b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or distribute any securities
or assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to any non-extraordinary periodic cash dividend or a dividend paid
solely in Common Stock) whether by dividend, in a reclassification or
recapitalization (including any such transaction involving a merger,
consolidation or share exchange), or otherwise, the Company shall make such
adjustments, if any, in the Exercise Price, number of Rights and/or securities
or other property purchasable upon exercise of Rights as the Board of Directors
of the Company, in its sole discretion, may deem to be appropriate under the
circumstances in order to adequately protect the interests of the holders of
Rights generally, and the Company and the Rights Agent shall amend this
Agreement as necessary to provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant
to this Section 2.3 shall be calculated to the nearest cent. Whenever an
adjustment to the Exercise Price is made
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pursuant to this Section 2.3, the Company shall (i) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment and (ii) promptly file with the Rights Agent and
with each transfer agent for the Common Stock a copy of such certificate. The
Rights Agent shall be fully protected in relying on such certificate and on any
adjustment therein contained and shall have no duty with respect to and shall
not be deemed to have knowledge of any adjustment unless and until it shall have
received such a certificate.
(d) Rights certificates shall represent the securities
purchasable under the terms of this Agreement, including any adjustment or
change in the securities purchasable upon exercise of the Rights, even though
such certificates may continue to express the securities purchasable at the time
of issuance of the initial Rights Certificates.
2.4 Date on Which Exercise is Effective. Each Person in
whose name any certificate for shares is issued (or registration on the stock
transfer books of the Company is effected) upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Exercise Price for such
Rights (and any applicable taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the stock transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate (or registration) shall be dated, the
next succeeding Business Day on which the stock transfer books of the Company
are open.
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2.5 Execution, Authentication, Delivery and Dating of
Rights Certificates. (a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, Chief Executive Officer, President,
Treasurer, Chief Operating Officer or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.
Promptly after the Separation Time, the Company will give
written notice to the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Company to the Rights Agent for
counter-signature, and, subject to Section 3.1(b), the Rights Agent shall
countersign and deliver such Rights Certificates to the holders of the Rights
pursuant to Section 2.2(c) hereof. No Rights Certificate shall be valid for any
purpose unless countersigned by the Rights Agent. The countersignature of the
Rights Agent on the Rights Certificates may be manual or facsimile.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.6 Registration, Registration of Transfer and Exchange.
(a) After the Separation Time, the Company will cause to be kept a register (the
"Rights Register") in which, subject to such reasonable regulations as it may
prescribe, the Company will provide for the registration and transfer of Rights.
The Rights Agent is hereby appointed "Rights Registrar" for the purpose of
maintaining the Rights Register for the Company and registering Rights and
trans-
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fers of Rights after the Separation Time as herein provided. In the event that
the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will
have the right to examine the Rights Register at all reasonable times after the
Separation Time.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.6(c) and (d), the
Company will execute, and the Rights Agent will countersign and deliver, in the
name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Section 3.1(b), all
Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of the Company, and such Rights
shall be entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.6, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
(d) The Company shall not register the transfer or
exchange of any Rights after such Rights have become void under Section 3.1(b),
been exchanged under Section 3.1(c) or been redeemed under Section 5.1.
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2.7 Mutilated, Destroyed, Lost and Stolen Rights
Certificates. (a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, then, subject to Sections 3.1(b),
3.1(c) and 5.1, the Company shall execute and the Rights Agent shall countersign
and deliver in exchange therefor a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the
Rights Agent prior to the Expiration Time (i) evidence to their satisfaction of
the destruction, loss or theft of any Rights Certificate and (ii) such security
or indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.7 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 3.1(b) shall be entitled to all
the
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benefits of this Agreement equally and proportionately with any and all other
Rights duly issued hereunder.
2.8 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate or notice of transfer, if uncertificated) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the Person in whose name such Rights Certificate
(or, prior to the Separation Time, such Common Stock certificate or Common Stock
registration, if uncertificated) is registered as the absolute owner thereof and
of the Rights evidenced thereby for all purposes whatsoever, including the
payment of the Redemption Price and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary. As used in this Agreement,
unless the context otherwise requires, the term "holder" of any Rights shall
mean the registered holder of such Rights (or, prior to the Separation Time, the
associated shares of Common Stock).
2.9 Delivery, Cancellation and Destruction of
Certificates. All Rights Certificates surrendered upon exercise or for
registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly canceled by the Rights Agent. The Company may at any time deliver to
the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Rights Certificates so delivered shall be promptly
canceled by the Rights Agent. No Rights Certificates shall be countersigned in
lieu of or in exchange for any Rights Certificates canceled as provided in this
Section 2.9, except as expressly permitted by this Agreement. The Rights Agent
shall return to the Company all canceled Rights Certificates approximately one
and one-
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half (1 1/2) years after the cancellation date. The Company shall destroy the
certificates after any applicable retention period required by the United States
Securities and Exchange Commission.
2.10 Agreement of Rights Holders. Every holder of Rights
by accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates
will be transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate or Common
Stock registration, if uncertificated) for registration of transfer, the
Company, the Rights Agent and any agent of the Company or the Rights Agent may
deem and treat the Person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate or Common Stock
registration, if uncertificated) is registered as the absolute owner thereof and
of the Rights evidenced thereby for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will,
under the circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from
time to time pursuant to Section 2.3(b) or 5.4 hereof.
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ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the
Expiration Time a Flip-in Date shall occur, except as provided in this Section
3.1, each Right shall constitute the right to purchase from the Company, upon
exercise thereof in accordance with the terms hereof (but subject to Section
5.10), that number of shares of Common Stock having an aggregate Market Price on
the Stock Acquisition Date that gave rise to the Flip-in Date equal to twice the
Exercise Price for an amount in cash equal to the Exercise Price (such right to
be appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that on or after such Stock Acquisition Date any
of the events described in Section 2.3(a) or (b), or any analogous event, shall
have occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or
were Beneficially Owned on or after the Stock Acquisition Date by an Acquiring
Person or an Affiliate or Associate thereof or by any transferee, direct or
indirect, of any of the foregoing shall become void and any holder of such
Rights (including transferees) shall thereafter have no right to exercise or
transfer such Rights under any provision of this Agreement. If any Rights
Certificate is presented for assignment or exercise and the Person presenting
the same will not complete the certification set forth at the end of the form of
assignment or notice of election to exercise and provide such additional
evidence of the identity of the Beneficial Owner and its Affiliates and
Associates (or former Beneficial Owners and their Affiliates and Associates) as
the Company shall reasonably request, then the Company shall be entitled
conclusively to deem the Beneficial Owner thereof to be an Acquiring Person or
an Affiliate or Associate thereof or a transferee of
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any of the foregoing and accordingly will deem the Rights evidenced thereby to
be void and not transferable or exercisable.
(c) The Board of Directors of the Company may, at its
option, at any time after a Flip-in Date and prior to the time that an Acquiring
Person becomes the Beneficial Owner of more than 50% of the outstanding shares
of Common Stock elect to exchange all (but not less than all) the then
outstanding Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 3.1(b)) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted in
order to protect the interests of holders of Rights generally in the event that
after the Separation Time any of the events described in Section 2.3(a) or (b),
or any analogous event, shall have occurred with respect to the Common Stock
(such exchange ratio, as adjusted from time to time, being hereinafter referred
to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each Right
(other than Rights that have become void pursuant to Section 3.1(b)), whether or
not previously exercised, will thereafter represent only the right to receive a
number of shares of Common Stock equal to the Exchange Ratio. Promptly after the
action of the Board of Directors electing to exchange the Rights, the Company
shall give written notice thereof (specifying the steps to be taken to receive
shares of Common Stock in exchange for Rights) to the Rights Agent and the
holders of the Rights (other than Rights that have become void pursuant to
Section 3.1(b)) outstanding immediately prior thereto by mailing such notice in
accordance with Section 5.9.
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Each Person in whose name any certificate for shares is issued
(or for whom any registration on the stock transfer books of the Company is
made) upon the exchange of Rights pursuant to this Section 3.1(c) or Section
3.1(d) shall for all purposes be deemed to have become the holder of record of
the shares represented thereby on, and such certificate (or registration on the
stock transfer books of the Company) shall be dated (or registered as of), the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of any applicable taxes and other governmental charges
payable by the holder was made; provided, however, that if the date of such
surrender and payment is a date upon which the stock transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate (or registration on the stock transfer
books of the Company) shall be dated (or registered as of), the next succeeding
Business Day on which the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under
Section 3.1(a) or (c) to issue shares of Common Stock upon exercise of or in
exchange for Rights, the Company, at its option, may substitute therefor shares
of Preferred Stock, at an initial rate of one one-hundredth of a share of
Preferred Stock for each share of Common Stock so issuable, as appropriately
adjusted to reflect adjustments in the voting rights of the Preferred Stock
pursuant to the terms thereof, so that the fraction of a share of Preferred
Stock delivered in lieu of each share of Common Stock shall have the same voting
rights as one share of Common Stock.
(e) In the event that there shall not be sufficient
treasury shares or authorized but unissued shares of Common Stock or Preferred
Stock of the Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or if the Company so elects to make the exchange
referred to in Section 3.1(c), the Company shall either (i) call a meeting of
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stockholders seeking approval to cause sufficient additional shares to be
authorized (provided that if such approval is not obtained the Company will take
the action specified in clause (ii) of this sentence) or (ii) take such action
as shall be necessary to ensure and provide, to the extent permitted by
applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option, either (A) in
return for the Exercise Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as otherwise required by applicable
law), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if the Board of
Directors of the Company elects to exchange the Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a share
of Common Stock on the Flip-in Date times the Exchange Ratio in effect on the
Flip-in Date, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the
Company shall not enter into any agreement with respect to, consummate or permit
to occur any Flip-over Transaction or Event unless and until it shall have
entered into a supplemental agreement with the Flip-over Entity, for the benefit
of the holders of the Rights, providing that, upon consummation or occurrence of
the Flip-over Transaction or Event (i) each Right shall thereafter constitute
the right to purchase from the Flip-over Entity, upon exercise thereof in
accordance with the terms hereof, that number of shares of Flip-over Stock of
the Flip-over Entity having an aggregate
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Market Price on the date of consummation or occurrence of such Flip-over
Transaction or Event equal to twice the Exercise Price for an amount in cash
equal to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that after
such date of consummation or occurrence any of the events described in Section
2.3(a) or (b), or any analogous event, shall have occurred with respect to the
Flip-over Stock) and (ii) the Flip-over Entity shall thereafter be liable for,
and shall assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the Company pursuant
to this Agreement. The provisions of this Section 3.2 shall apply to successive
Flip-over Transactions or Events.
(b) Prior to the Expiration Time, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-over Transaction or Event if at the time thereof there are any rights,
warrants or securities outstanding or any other arrangements, agreements or
instruments that would eliminate or otherwise diminish in any material respect
the benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, delivery, amendment, administration and execution
of this Agreement and the
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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, damage, judgment, fine, penalty, claim, demand, settlement, cost or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent (which gross negligence, bad faith or willful
misconduct must be determined by a final, non-appealable order, judgment, decree
or ruling of a court of competent jurisdiction), for any action taken, suffered
or omitted to be done by the Rights Agent in connection with the acceptance and
administration of this Agreement, including, without limitation, the costs and
expenses of defending against any claim of liability. The indemnity provided
herein shall survive termination of this Agreement and the termination and the
expiration of the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, incidental or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any liability of the
Rights Agent under this Rights Agreement will be limited to the amount of fees
paid by the Company to the Rights Agent.
(b) The Rights Agent shall be authorized and protected
and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with the acceptance and administration of this
Agreement in reliance upon any certificate for securities (or registration on
the stock transfer books of the Company) purchasable upon exercise of Rights,
Rights Certificate, certificate for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be
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signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons. The Rights Agent shall not be required to take any action
hereunder unless properly notified pursuant to this Agreement.
4.2 Merger or Consolidation or Change of Name of Rights
Agent. (a) Any Person into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any Person resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any Person succeeding to the shareholder services business
of the Rights Agent or any successor Rights Agent, will be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 4.4 hereof. In case at the time such successor Rights
Agent succeeds to the agency created by this Agreement any of the Rights
Certificates have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates have not been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
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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.
4.3 Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations expressly 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 advice or opinion of such counsel
will be full and complete authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered, or omitted by it in good faith and in accordance with such advice or
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of Market Price) be proved or established by the Company prior
to taking, suffering or omitting any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by a
Person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President and by the Treasurer or any Assistant Treasurer
or the Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate will be full authorization and protection to
the Rights Agent and the Rights Agent shall incur no liability for
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or in respect of any action taken, suffered or omitted in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for
its own gross negligence, bad faith or willful misconduct (as determined by a
final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).
(d) The Rights Agent will not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the certificates, if any, for securities purchasable upon exercise of Rights or
the Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.
(e) The Rights Agent will not be under any liability or
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due authorization, execution and delivery hereof by
the Rights Agent) or in respect of the validity or execution of any certificate,
if any, for securities purchasable upon exercise of Rights or Rights Certificate
(except its countersignature thereof); nor will it be responsible for any breach
by the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b) hereof) or any adjustment required under the provisions of
Section 2.3, 3.1 or 3.2 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 2.3 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
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securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any Person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
Persons for advice or instructions in connection with its duties, and such
instructions shall be full authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it in good faith in accordance with instructions of any
such Person.
(h) The Rights Agent and any Affiliate, stockholder,
director, officer or employee of the Rights Agent may buy, sell or deal in
Common Stock, Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other Person or legal entity.
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(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct 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 it reasonably believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
4.4 Change of Rights Agent. The Rights Agent may resign
and be discharged from its duties under this Agreement upon 30 days' notice (or
such lesser notice as is acceptable to the Company) in writing mailed to the
Company and to each transfer agent of Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. The
Company may remove the Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent and to each transfer agent of the Common Stock by registered or
certified mail, and to the holders of the Rights in accordance with Section 5.9.
If the Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights or the Rights Agent
may apply to any court of competent jurisdiction for the
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appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a Person (or an affiliate of such a
Person) organized and doing business under the laws of the United States or any
state of the United States, in good standing, which is authorized under such
laws to exercise the powers of the Rights Agent contemplated by this Agreement
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000. After appointment, the successor Rights Agent
will be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to the Flip-in Date, elect to redeem all
(but not less than all) the then outstanding Rights at the Redemption Price and
the Company, at its option, may pay the Redemption Price either in cash or
shares of Common Stock or other securities of the Company
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deemed by the Board of Directors, in the exercise of its sole discretion, to be
at least equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors
of the Company electing to redeem the Rights (or, if the resolution of the Board
of Directors electing to redeem the Rights states that the redemption will not
be effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right,
whether or not previously exercised, will thereafter represent only the right to
receive the Redemption Price in cash or securities, as determined by the Board
of Directors. Promptly after the Rights are redeemed, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice in accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall
expire at the Expiration Time and no Person shall have any rights pursuant to
this Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged or redeemed, as provided in Section 3.1 or 5.1 hereof, respectively.
5.3 Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the number or kind or class of shares of stock purchasable upon
exercise of Rights made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock by
the Company following the Separation Time and prior to the Expiration Time
pursuant to the terms of
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securities convertible or redeemable into shares of Common Stock or to options,
in each case issued or granted prior to, and outstanding at, the Separation
Time, the Company shall issue to the holders of such shares of Common Stock,
Rights Certificates representing the appropriate number of Rights in connection
with the issuance or sale of such shares of Common Stock; provided, however, in
each case, (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 to the
Person to whom such Rights Certificates would be issued, (ii) no such Rights
Certificates shall be issued if, and to the extent that, appropriate adjustment
shall have otherwise been made in lieu of the issuance thereof, and (iii) the
Company shall have no obligation to distribute Rights Certificates to any
Acquiring Person or Affiliate or Associate of an Acquiring Person or any
transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the
Rights Agent may from time to time supplement or amend this Agreement without
the approval of any holders of Rights (i) prior to the Flip-in Date, in any
respect and (ii) on or after the Flip-in Date, to make any changes that the
Company may deem necessary or desirable and which shall not materially adversely
affect the interests of the holders of Rights generally or in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be inconsistent with any other provisions herein or otherwise defective. The
Rights Agent will, upon the delivery of a certificate from an appropriate
officer of the Company that states that the proposed supplement or amendment
complies with this Section 5.4, duly execute and deliver any supplement or
amendment hereto requested by the Company which satisfies the terms of the
preceding sentence. Notwithstanding anything contained in this Agreement to the
contrary, the Rights
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38
Agent may, but shall not be obligated to, enter into any supplement or amendment
that affects the Rights Agent's own rights, duties or immunities under this
Agreement.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing (or register on the stock transfer books of the
Company) fractional shares upon exercise or redemption of Rights, the Company
shall, in lieu thereof, in the sole discretion of the Board of Directors, either
(a) evidence such fractional shares by depositary receipts issued pursuant to an
appropriate agreement between the Company and a depositary selected by it,
providing that each holder of a depositary receipt shall have all of the rights,
privileges and preferences to which such holder would be entitled as a
beneficial owner of such fractional share, or (b) pay to the registered holder
of such Rights the appropriate fraction of the Market Price per share in cash.
5.6 Rights of Action. Subject to the terms of this
Agreement (including Sections 3.1(b) and 5.14), rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective holders of the Rights; and any holder of any
Rights, without the consent of the Rights Agent or of the holder of any other
Rights, may, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise act
in respect of, such holder's right to exercise such holder's Rights in the
manner provided in such holder's Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the
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39
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
5.7 Holder of Rights Not Deemed a Stockholder. No holder,
as such, of any Rights shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of shares or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 5.8 hereof), or to receive dividends
or subscription rights, or otherwise, until such Rights shall have been
exercised or exchanged in accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall
propose on or after the Separation Time and prior to the Expiration Time (i) to
effect or permit a Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the date on which
such Flip-over Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by
this Agreement to be given or made by the Rights Agent or by the holder of any
Rights to or on the Company shall
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40
be sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
L & C Spinco, Inc.
---------------------------------
---------------------------------
Attention: Corporate Secretary
with a copy to:
L & C Spinco, Inc.
---------------------------------
---------------------------------
Attention: General Counsel
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Xxxxx Fargo Bank Minnesota, N.A.
---------------------------------
---------------------------------
---------------------------------
Attention:
-----------------------
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
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5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will or need be taken pursuant
to Section 3.1 or to comply with federal or state securities laws, the Company
may suspend the exercisability of the Rights for a reasonable period in order to
take such action or comply with such laws. In the event of any such suspension,
the Company shall issue as promptly as practicable a public announcement with
prompt written notice to the Rights Agent stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice thereof
pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are purchasable upon
exercise of Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the holder of any
Rights for the costs and expenses (including legal fees) incurred by such holder
in actions to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.12 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the holders of the Rights any legal or equitable right, remedy or
claim under this Agreement and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the
Rights.
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5.14 Determination and Actions by the Board of Directors,
etc. The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement. All such actions, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) done or made by the Board 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 of Directors of the
Company to any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear
herein for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
5.16 GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
DELAWARE AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED
ENTIRELY WITHIN SUCH STATE.
5.17 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.
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43
5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.
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44
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
L & C SPINCO, INC.
By:
------------------------------
Name:
------------------------
Title:
------------------------
XXXXX FARGO BANK MINNESOTA, N.A.
By:
------------------------------
Name:
------------------------
Title:
------------------------
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45
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT
THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
Rights Certificate
L & C SPINCO, INC.
This certifies that ____________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Stockholder Protection Rights Agreement, dated
as of ___________, 2001 (as amended from time to time, the "Rights Agreement"),
between L & C Spinco, Inc., a Delaware corporation (the "Company"), and Xxxxx
Fargo Bank Minnesota, N.A., as Rights Agent (the "Rights Agent", which term
shall include any successor Rights Agent under the Rights Agreement), to
purchase from the Company at any time after the Separation Time (as such term is
defined in the Rights Agreement) and prior to the Close of Business on ________,
2011, one one-hundredth of a fully paid share of Participating Preferred Stock,
$.01 par value (the "Preferred Stock"), of the Company (subject to adjustment as
provided in the Rights Agreement) at the Exercise Price referred to below, upon
presentation and surrender of this Rights Certificate with the Form of Election
to Exercise duly executed at
46
the office of the Rights Agent designated for such purposes. The Exercise Price
shall initially be per Right and shall be subject to adjustment in certain
events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
purchase securities of an entity other than the Company or securities or assets
of the Company other than Preferred Stock, all as provided in the Rights
Agreement.
This Rights Certificate is subject to all of the terms,
covenants and restrictions of the Rights Agreement, which terms, covenants and
restrictions 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 exercisability
of such Rights under the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file at the principal office of
the Company and are available without cost upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or
Rights Certificates surrendered. If this Rights Certificate shall be exercised
in part, the registered holder shall be entitled to receive, upon surrender
hereof, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
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47
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right or (b)
exchanged by the Company under certain circumstances, at its option, for one
share of Common Stock or one one-hundredth of a share of Preferred Stock per
Right (or, in certain cases, other securities or assets of the Company), subject
in each case to adjustment in certain events as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Common Stock or of any other securities which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised or exchanged 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.
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48
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Date:
-------------------------------
ATTEST: L & C SPINCO, INC.
By
------------------------------------ ------------------------------
Secretary
Countersigned:
XXXXX FARGO BANK MINNESOTA, N.A.
By
----------------------------------
Authorized Signature
-4-
49
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells,
assigns and transfers unto ____________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ,
---------------------- -------
Signature Guaranteed:
-------------------------------------------
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee Medallion program), pursuant to Exchange Act
Rule 17Ad-15.
------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
-------------------------------------------
Signature
50
NOTICE
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
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51
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: L & C SPINCO, INC.
The undersigned hereby irrevocably elects to exercise
____________________ whole Rights represented by the attached Rights Certificate
to purchase the shares of Participating Preferred Stock issuable upon the
exercise of such Rights and requests that certificates for such shares be issued
in the name of:
---------------------------------------
Address:
-------------------------------
---------------------------------------
Social Security or Other Taxpayer
Identification Number:
-----------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
---------------------------------------
Address:
-------------------------------
---------------------------------------
Social Security or Other Taxpayer
Identification Number:
-----------------
Dated: ,
--------------- ------
52
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Signature Guaranteed:
-------------------------------------------
Signature
(Signature must correspond to name as
written upon the face of the attached Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee Medallion program), pursuant to Exchange Act
Rule 17Ad-15.
-------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by the attached Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
-------------------------------------------
Signature
-------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported exercise, the Company will deem the
Beneficial Owner of the Rights evidenced by the attached Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
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53
EXHIBIT B
FORM OF ARTICLE IV.C TO RESTATED CERTIFICATE OF INCORPORATION
OF L & C SPINCO, INC. (SETTING FORTH TERMS OF
PARTICIPATING PREFERRED STOCK OF L & C SPINCO, INC.)
PARTICIPATING PREFERRED STOCK
There is hereby established a series of Preferred Stock, $.01 par
value, of the Corporation, and the designation and certain terms, powers,
preferences and other rights of the shares of such series, and certain
qualifications, limitations and restrictions thereon, are hereby fixed as
follows:
(i) The distinctive serial designation of this series shall be
"Participating Preferred Stock" (hereinafter called "this Series"). Each share
of this Series shall be identical in all respects with the other shares of this
Series except as to the dates from and after which dividends thereon shall be
cumulative.
(ii) The number of shares in this Series shall initially be
_______, which number may from time to time be increased or decreased (but not
below the number then outstanding) by the Board of Directors. Shares of this
Series purchased by the Corporation shall be canceled and shall revert to
authorized but unissued shares of Preferred Stock undesignated as to series.
Shares of this Series may be issued in fractional shares, which fractional
shares shall entitle the holder, in proportion to such holder's fractional
share, to all rights of a holder of a whole share of this Series.
(iii) The holders of full or fractional shares of this Series shall
be entitled to receive, when and as declared by the Board of Directors, but only
out of funds legally available therefor, dividends, (A) on each date that
dividends or other distributions (other than dividends or distributions payable
in Common Stock of the Corporation) are payable on or in respect of Common Stock
comprising part of the Reference Package (as defined below), in an amount per
whole share of this Series equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common Stock of
the Corporation) that would be payable on such date to a holder of the Reference
Package and (B) on the last day of March, June, September and December in each
year, in an amount per whole share of this Series equal to the excess (if any)
of $____ over the aggregate dividends paid per whole share of this Series during
the three month period ending on such last day. Each such dividend shall be paid
to the holders of record of shares of this Series on the date, not exceeding
sixty days preceding such dividend or distribution payment date, fixed for the
purpose by the Board of Directors in advance of payment of each particular
dividend or distribution. Dividends on each full and each fractional share of
this Series shall be cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional share originally
issued after a dividend record date and on or prior to the dividend payment date
to which such record date relates shall not be entitled to receive the dividend
payable on such dividend payment date or any amount in respect of the period
from such original issuance to such dividend payment date.
54
The term "Reference Package" shall initially mean 100 shares of Common
Stock, par value $.01 per share ("Common Stock"), of the Corporation. In the
event the Corporation shall at any time after the Close of Business on ________,
____ (A) declare or pay a dividend on any Common Stock payable in Common Stock,
(B) subdivide any Common Stock or (C) combine any Common Stock into a smaller
number of shares, then and in each such case the Reference Package after such
event shall be the Common Stock that a holder of the Reference Package
immediately prior to such event would hold thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided on this Series.
So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation) shall be declared or paid or
set aside for payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to this Series as to dividends or
upon liquidation, unless the full cumulative dividends (including the dividend
to be paid upon payment of such dividend or other distribution) on all
outstanding shares of this Series shall have been, or shall contemporaneously
be, paid. When dividends are not paid in full upon this Series and other stock
ranking on a parity as to dividends with this Series, all dividends declared
upon shares of this Series and any other stock ranking on a parity as to
dividends shall be declared pro rata so that in all cases the amount of
dividends declared per share on this Series and such other stock shall bear to
each other the same ratio that accumulated dividends per share on the shares of
the Series and such other stock bear to each other. Neither the Common Stock nor
any other stock of the Corporation ranking junior to or on a parity with this
Series as to dividends or upon liquidation shall be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such stock)
by the Corporation (except by conversion into or exchange for stock of the
Corporation ranking junior to this Series as to dividends and upon liquidation),
unless the full cumulative dividends (including the dividend to be paid upon
payment of such dividend, distribution, redemption, purchase or other
acquisition) on all outstanding shares of this Series shall have been, or shall
contemporaneously be, paid.
(iv) In the event of any merger, consolidation, reclassification or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property, then in
any such case the shares of this Series shall at the same time be similarly
exchanged or changed in an amount per whole share equal to the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, that a holder of the Reference Package would be entitled to receive
as a result of such transaction.
(v) In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, the holders of
full and fractional shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of the Common Stock
or any other stock of the Corporation ranking junior to this Series upon
liquidation, to be paid in full an amount per whole share of this Series equal
to the greater of
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55
(A) $__________ or (B) the aggregate amount distributed or to be distributed
prior to such date in connection with such liquidation, dissolution or winding
up to a holder of the Reference Package (such greater amount being hereinafter
referred to as the "Liquidation Preference"), together with accrued dividends to
such distribution or payment date, whether or not earned or declared. If such
payment shall have been made in full to all holders of shares of this Series,
the holders of shares of this Series as such shall have no right or claim to any
of the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution
to the holders of shares of this Series upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are entitled
pursuant to the first paragraph of this Section (v), no such distribution shall
be made on account of any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of this Series upon such liquidation,
dissolution or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably in proportion to the full
distributable amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation, the
holders of shares of this Series then outstanding shall be entitled to be paid
out of assets of the Corporation available for distribution to its stockholders
all amounts to which such holders are entitled pursuant to the first paragraph
of this Section (v) before any payment shall be made to the holders of Common
Stock or any other stock of the Corporation ranking junior upon liquidation to
this Series.
For the purposes of this Section (v), the consolidation or merger of,
or binding share exchange by, the Corporation with any other corporation shall
not be deemed to constitute a liquidation, dissolution or winding up of the
Corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, as amended, of the
Corporation, each whole share of this Series shall, on any matter, vote as a
class with any other capital stock comprising part of the Reference Package and
voting on such matter and shall have the number of votes thereon that a holder
of the Reference Package would have.
-3-
