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EXHIBIT 4.1
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RIGHTS AGREEMENT
BETWEEN
THE ENSTAR GROUP, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY,
AS RIGHTS AGENT
DATED AS OF JANUARY 20, 1997
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Table of Contents
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Section Page
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3. Issuance of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6. Transfer, Split-Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . 9
Section 8. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . 10
Section 9. Reservation and Availability of Shares of Common Stock . . . . . . . . . . . . . . . . . . . . 11
Section 10. Common Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 11. Adjustments to Number and Kind of Shares; Number of Rights or Purchase Price . . . . . . . . . 12
Section 12. Certification of Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 13. Consolidation; Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . 22
Section 14. Fractional Rights and Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 17. Right Certificate Holder Not Deemed a Shareholder . . . . . . . . . . . . . . . . . . . . . . 26
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . 27
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Section Page
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Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 24. Notice of Proposed Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 26. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 28. Benefits of this Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 29. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 30. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 31. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 32. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
EXHIBIT A Form of Right Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
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RIGHTS AGREEMENT
This Agreement ("Rights Agreement"), dated as of January 20,
1997, between THE ENSTAR GROUP, INC., a Georgia corporation (the "Company"),
and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation (the
"Rights Agent").
WITNESSETH:
WHEREAS, the Board of Directors of the Company on January 20,
1997 (i) authorized the issuance and declared a dividend of one right (a
"Right") for each share of the voting common stock, par value $.01 per share
("Common Stock"), of the Company outstanding as of the Close of Business (as
defined herein) on January 20, 1997, each Right representing the right to
purchase one share of Common Stock of the Company upon the terms and subject to
the conditions hereafter set forth, and (ii) further authorized the issuance of
one Right with respect to each share of Common Stock of the Company that shall
become outstanding between January 20, 1997, and the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date (each such
term as defined herein).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the outstanding Common Stock; provided,
however, that the term "Acquiring Person" shall not include an Exempt Person
(as such term is hereinafter defined).
(b) "Adjustment Shares" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), as in effect on the date hereof.
(d) A Person shall be deemed the "Beneficial Owner" of
any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
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(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or
options, or otherwise; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially
own", securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for payment; or (B) the right to vote
pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", any securities if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then
reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except as described
in clause (B) of subparagraph (ii) of this paragraph (d)) or
disposing of any securities of the Company;
provided, however, that nothing in this paragraph (d) shall
cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to beneficially
own, any securities acquired through such Person's
participation in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such
acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., Montgomery, Alabama time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Montgomery, Alabama time,
on the next succeeding Business Day.
(g) "Common Stock" when used with reference to the
Company shall mean the voting common stock (presently $.01 par value per share)
of the Company. "Common stock" when used with reference to any Person other
than the Company which shall be organized in corporate form shall mean the
capital stock or other equity security with the greatest per share voting power
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of such Person or, if such Person is a Subsidiary of or is controlled by
another Person, the Person which ultimately controls such first-mentioned
Person. "Common stock" when used with reference to any Person other than the
Company which shall not be organized in corporate form shall mean units of
beneficial interest which shall represent the right to participate in profits,
losses, deductions and credits of such Person and which shall be entitled to
exercise the greatest voting power per unit of such Person.
(h) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(i) "Continuing Director" shall mean:
(i) any member of the Board of Directors of the
Company who was a member of the Board immediately prior to the
time that any Person shall become an Acquiring Person, and who
is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person
or of any such Affiliate or Associate, or
(ii) any member of the Board of Directors who
becomes a member of the Board subsequent to the time that a
Person shall become an Acquiring Person, and who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative of an Acquiring Person or of any
such Affiliate or Associate, if such Person is recommended or
nominated to election on the Board by a majority, and in no
event less than two, of the Continuing Directors then on the
Board.
(j) "Current Market Price" shall have the meaning set
forth in Section 11(d) hereof.
(k) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth
in Section 3(a) hereof.
(m) "Equivalent Common Stock" shall have the meaning set
forth in Section 11(b) hereof.
(n) "Exchange Act" shall have the meaning set forth in
Section 1(c) hereof.
(o) "Exempt Person" shall mean:
(i) the Company, any Subsidiary of the Company,
any employee benefit plan or employee stock plan of the
Company or of any Subsidiary of the Company,
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or any person or entity organized, appointed, established or
holding Common Stock for or pursuant to the terms of any such
plan;
(ii) any Person who would otherwise become an
Acquiring Person solely by virtue of a reduction in the number
of outstanding shares of Common Stock; provided, however, that
such Person shall not be an Exempt Person if, subsequent to
such reduction, such Person shall become the Beneficial Owner
of any additional shares of Common Stock; and
(iii) any Person who as of the date on which shares
of Common Stock are distributed to the Company's shareholders
pursuant to the Company's Second Amended Plan of
Reorganization, as Modified, is the Beneficial Owner of 5% or
more of the outstanding Common Stock; provided, however, that
such Person shall not be an Exempt Person if, subsequent to
such date, such Person shall become the Beneficial Owner of
any additional shares of Common Stock.
(p) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(r) "NASDAQ" shall have the meaning set forth in Section
9(b) hereof.
(s) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(t) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(u) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(v) "Redemption Price" shall have the meaning set forth
in Section 23(a) hereof.
(w) "Right Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(x) "Section 11(a)(ii) Event" shall mean an event
described in Section 11(a)(ii)(A), (B) or (C) hereof.
(y) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(z) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
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(aa) "Securities Act" shall mean the Securities Act of
1933, as amended.
(bb) "Stock Acquisition Date" shall mean the first date of
a public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such; provided, however, that a Stock Acquisition Date shall
not be deemed to have occurred if any Person shall have inadvertently become an
Acquiring Person and within ten days after the date upon which the Company
shall first become aware of the occurrence of such an event, the Board of
Directors in its sole discretion (1) approves the Beneficial Ownership interest
then held by such Person or (2) provides such Person a thirty day period to
divest a sufficient number of shares of Common Stock so as to decrease the
Beneficial Ownership of such Person to less than 15% of the shares of Common
Stock then outstanding and such Person has so divested at the end of any such
thirty day period.
(cc) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(dd) "Subsidiary" of a Person shall mean any corporation
or other entity of which securities or other ownership interests having
ordinary voting power sufficient to elect a majority of the board of directors
or other persons performing similar functions are beneficially owned, directly
or indirectly, by such Person.
(ee) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(ff) "Triggering Event" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C) or Section 13 hereof. Any determination
required by the definitions contained in this Section 1 shall be made by the
Board of Directors of the Company in its good faith judgment, which
determination shall be binding on the Rights Agent and the holders of the
Rights.
Section 2. Appointment of Rights Agent. 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 may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. If the Company appoints one or more Co-Rights Agents,
the respective duties of the Rights Agent and any Co-Rights Agents shall be as
the Company shall determine.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of the Close of Business on the
tenth day (the "Distribution Date") after (i) the Stock Acquisition Date or
(ii) the date of the commencement by any Person (other than an Exempt Person)
of, or the first public announcement of the intent of any Person (other than an
Exempt Person) to commence, a tender or exchange offer upon the successful
consummation of which such Person, together with its Affiliates and Associates,
would be the Beneficial Owner of 15% or more of the outstanding Common Stock
(irrespective of whether any
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shares are actually purchased pursuant to such offer), (x) the Rights will be
evidenced (subject to the provisions of Section 3(c) hereof) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock and not by separate Right certificates, and (y) each Right will be
transferable only in connection with the transfer of a share (subject to
adjustment as hereinafter provided) of Common Stock. As soon as practicable
after the Distribution Date, the Rights Agent will send, by first class,
postage prepaid mail, to each record holder of the Common Stock as of the Close
of Business on the Distribution Date, as shown by the records of the Company,
at the address of such holder shown on such records, a Right certificate in
substantially the form of Exhibit A hereto ("Right Certificate") evidencing one
Right for each share of Common Stock so held. As of and after the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On March 1, 1997 or as soon as practicable
thereafter, the Company will send a copy of an information statement that
includes a summary of this Rights Agreement by first-class, postage prepaid
mail, to each person entitled to receive shares of Common Stock under the
Company's Second Amended Plan of Reorganization, as Modified.
(c) With respect to certificates for Common Stock
outstanding as of January 20, 1997, until the Distribution Date (or, if
earlier, the Expiration Date or the Final Expiration Date), the Rights will be
evidenced by certificates for Common Stock registered in the names of the
holders thereof. Until the Distribution Date (or, if earlier, the Expiration
Date or Final Expiration Date), the surrender for transfer of any certificate
for Common Stock outstanding on January 20, 1997, shall also constitute the
surrender for transfer of the Rights associated with the Common Stock
represented thereby.
(d) Certificates issued for Common Stock (including,
without limitation, certificates issued upon transfer or exchange of Common
Stock) after January 20, 1997, but prior to the earlier of the Distribution
Date, the Expiration Date or the Final Expiration Date, shall have impressed
on, printed on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between The Enstar Group, Inc. and American Stock Transfer &
Trust Company as Rights Agent, dated as of January 20, 1997
(the "Rights Agreement"), the terms of which are incorporated
herein by reference and a copy of which is on file at the
principal executive office of The Enstar Group, Inc. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will
no longer be evidenced by this certificate. The Enstar Group,
Inc. will mail to the holder of this certificate a copy of the
Rights Agreement without charge within five days after receipt
by it of a written request therefor. Under certain
circumstances as provided in the Rights Agreement, Rights
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issued to or beneficially owned by Acquiring Persons or
their Associates or Affiliates (as defined in the Rights
Agreement) or any subsequent holder of such Rights may become
null and void.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the Distribution Date, be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
surrender for transfer of the Rights associated with the Common Stock
represented thereby.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election
to purchase shares and of assignment to be printed on the reverse thereof),
when, as and if issued, shall be substantially in the form set forth in Exhibit
A hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Rights
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 stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Sections 11 and 22 hereof, the Right
Certificates evidencing the Rights issued on January 20, 1997, whenever issued,
shall be dated as of January 20, 1997 and the Right Certificates evidencing
Rights to holders of record of Common Stock issued after January 20, 1997 shall
be dated as of January 20, 1997 but also shall be dated to reflect the date of
issuance of such Right Certificate, and on their face Right Certificates shall
entitle the holders thereof to purchase one share of Common Stock, or other
securities or property as provided herein, as the same may from time to time be
adjusted as provided herein, at the price of Forty Dollars ($40.00), as the
same may from time to time be adjusted as provided herein (the "Purchase
Price").
(b) Notwithstanding any other provision of this Rights
Agreement, any Right Certificate that represents Rights that are or were at any
time on or after the Distribution Date beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof (or any transferee of such Rights)
shall have impressed on, printed on, written on or otherwise affixed to it (if
the Company or the Rights Agent has knowledge that such Person is an Acquiring
Person or an Associate or Affiliate thereof or transferee of such Persons or a
nominee of any of the foregoing) the following legend:
The beneficial owner of the Rights represented by this
Right Certificate is an Acquiring Person or an Affiliate or
Associate (as defined in the Rights Agreement) of an Acquiring
Person or a subsequent holder of such Right Certificate
beneficially owned by such Persons. Accordingly, under
certain circumstances as provided in the Rights Agreement,
this Right Certificate and the Rights represented hereby may
become null and void.
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Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf
of the Company by its Chairman, Chief Executive Officer, President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent, issued and delivered with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its offices at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced on
its face by each of the Right Certificates, the date of each of the Right
Certificates, and the certificate numbers for each of the Right Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 14(b) hereof,
at any time after the Close of Business on the Distribution Date and at or
prior to the Close of Business on the earlier of the Expiration Date or the
Final Expiration Date, any Right Certificate or Certificates may be (a)
transferred or (b) split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase
a like number of shares of Common Stock as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer any Right Certificate shall surrender
the Right Certificate at the shareholder services office of the Rights Agent
with the form of assignment on the reverse side thereof duly endorsed (or
enclose with such Right Certificate a written instrument of transfer in a form
satisfactory to the Company and the Rights Agent), duly executed by the
registered holder thereof or his attorney duly authorized in writing, and with
such signature duly guaranteed. Any registered holder desiring to split up,
combine or exchange any Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be split up, combined or exchanged at the shareholder
services office of the Rights Agent. Thereupon the Rights Agent shall
countersign (by manual signature) and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
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The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, if requested by
the Company, reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will execute and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The Rights shall become exercisable, and may be
exercised to purchase Common Stock, except as otherwise provided herein, in
whole or in part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed (with such signature duly guaranteed), to the Rights
Agent at the shareholder services office of the Rights Agent in 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 together with payment of the Purchase Price with
respect to each Right exercised, subject to adjustment as hereinafter provided,
at or prior to the close of business on the earlier of (i) January 20, 2007
("Final Expiration Date"), or (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (such date being herein referred to as the
"Expiration Date").
(b) The Purchase Price shall initially be $40.00 for
each share of Common Stock issued pursuant to the exercise of a Right. The
Purchase Price and the number of shares of Common Stock or other securities or
consideration to be acquired upon exercise of a Right shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof. The
Purchase Price shall be payable in lawful money of the United States of
America, in accordance with Section 7(c) hereof.
(c) Except as provided in Section 7(d) hereof, upon
receipt of a Right Certificate with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price or so much thereof as is
necessary for the shares to be purchased and an amount equal to any applicable
transfer tax, by cash, certified check or official bank check payable to the
order of the Company or the Rights Agent, the Rights Agent shall thereupon
promptly (i) requisition from any transfer agent of the Common Stock
certificates for the number of shares of Common Stock so elected to be
purchased and the Company will comply and hereby authorizes and directs such
transfer agent to comply with all such requests, (ii) requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14(b) hereof, and (iii) promptly after receipt of
such Common Stock certificates cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate,
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registered in such name or names as may be designated by such holder, and, when
appropriate, after receipt promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate; provided, however, that in the
case of a purchase of securities, other than Common Stock, pursuant to Section
13 hereof, the Rights Agent shall promptly take the appropriate actions
corresponding to the foregoing clauses (i) through (iii). In the event that
the Company is obligated to issue other securities of the Company, pay cash
and/or distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent, if
and when appropriate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Rights Agreement
to the contrary, any Rights that are at any time beneficially owned by an
Acquiring Person or any Affiliate or Associate of an Acquiring Person shall be
null and void and nontransferable, and any holder of any such Right (including
any purported transferee or subsequent holder) shall not have any right to
exercise or transfer any such Right.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered to
the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
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14
Section 9. Reservation and Availability of Shares of Common Stock.
(a) The Company covenants and agrees that at all times
it will cause to be reserved and kept available, out of and to the extent of
its authorized and unissued shares of Common Stock not reserved for another
purpose (and, following the occurrence of a Triggering Event, other securities)
or shares of Common Stock not reserved for another purpose (and, following the
occurrence of a Triggering Event, other securities) held in its treasury, the
number of shares of Common Stock (and, following the occurrence of a Triggering
Event, other securities) that, as provided in this Agreement, including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights; provided, however, that the Company shall not be required
to reserve and keep available shares of Common Stock or other securities
sufficient to permit the exercise in full of all outstanding Rights pursuant to
the adjustments set forth in Section 11(a)(ii), Section 11(a)(iii) or Section
13 hereof unless, and only to the extent that, the Rights become exercisable
pursuant to such adjustments.
(b) The Company shall (i) use its best efforts to
cause, from and after such time as the Rights become exercisable, the Rights
and all shares of Common Stock (and following the occurrence of a Triggering
Event, other securities) issued or reserved for issuance upon exercise thereof
to be listed by the NASDAQ National Market ("NASDAQ") or any national
securities exchange upon notice of issuance upon such exercise and (ii) if then
necessary to permit the offer and issuance of such shares of Common Stock (and,
following the occurrence of a Triggering Event, other securities), register and
qualify such shares of Common Stock (and, following the occurrence of a
Triggering Event, other securities) under the Securities Act and any applicable
state securities or "blue sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the Expiration Date or the Final
Expiration Date of the Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days, the exercisability of the Rights
in order to prepare and file a registration statement under the Securities Act
and permit it to become effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement under the Securities Act (if
required) shall have been declared effective.
(c) The Company covenants and agrees that it will take
all such action as may be necessary to insure that all shares of Common Stock
(and following the occurrence of a Triggering Event, other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares in accordance with applicable law.
-11-
15
(d) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Right Certificates or of any shares of Common Stock (or other securities, as
the case may be) upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates for Common Stock (or other securities, as
the case may be) upon exercise of Rights in a name other than that of, the
registered holder of the Right Certificate, and the Company shall not be
required to issue or deliver a Right Certificate or certificate for Common
Stock (or other securities, as the case may be) to a person other than such
registered holder until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax is
due.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for shares of Common Stock (or other securities, as the case may
be) is issued upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the Common Stock (or other securities, as
the case may be) represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Stock (and/or other shares of capital
stock or securities) transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Common Stock (and/or other shares of capital stock or securities) transfer
books of the Company are open.
Section 11. Adjustments to Number and Kind of Shares; Number of
Rights or Purchase Price.
The number and kind of shares subject to purchase upon the exercise of
each Right, the number of Rights outstanding and the Purchase Price are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Rights Agreement (A) declare or pay any dividend on
Common Stock payable in shares of Common Stock, (B) subdivide or split the
outstanding shares of Common Stock into a greater number of shares, (C) combine
or consolidate the outstanding shares of Common Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of Common Stock or
(D) issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of Common Stock or capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted
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so that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Common Stock or capital stock, as the case may be,
which, if such Right had been exercised immediately prior to such date, the
holder thereof would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification. If
an event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any
Associate or Affiliate of any Acquiring Person, at
any time after the date of this Agreement,
directly or indirectly, (1) shall consolidate with
or merge with and into the Company or any of its
Subsidiaries or otherwise combine with the Company
or any of its Subsidiaries and the Company or such
Subsidiary shall be the continuing or surviving
corporation of such consolidation, merger or
combination and the Common Stock of the Company
shall remain outstanding and no shares thereof
shall be changed into or exchanged for stock or
other securities of the Company or of any other
Person or cash or any other property, or (2)
shall, in one or more transactions, other than in
connection with the exercise or conversion of
securities exercisable for or convertible into
securities of the Company or of any Subsidiary of
the Company, transfer any assets or property to
the Company or any of its Subsidiaries in exchange
(in whole or in part) for any shares of any class
of capital stock of the Company or any of its
Subsidiaries or any securities exercisable for or
convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries,
or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of
the Company or any of its Subsidiaries or any
securities exercisable for or convertible into
shares of any class of capital stock of the
Company or any of its Subsidiaries (other than as
part of a pro rata offer or distribution by the
Company or such Subsidiary to all holders of such
shares), or (3) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise
acquire (other than as a pro rata dividend) or
dispose, to, from or with, as the case may be, in
one transaction or a series of transactions, the
Company or any of its Subsidiaries, assets
(including securities) on terms and conditions
less favorable to the Company or such Subsidiary
than the Company or such Subsidiary would be able
to obtain in arm's-length negotiation with an
unaffiliated third party, or (4) shall receive
any compensation from the Company or any of its
Subsidiaries for services other than compensation
for
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employment as a regular or part time employee, or
fees for serving as a director, at rates in
accordance with the Company's (or its
Subsidiary's) past practices, or (5) shall receive
the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial
assistance or any tax credits or tax advantage
provided by the Company or any of its Subsidiaries
or (6) shall engage in any transaction with the
Company (or any of its Subsidiaries) involving the
sale, license, transfer or grant of any right in
or disclosure of, any patents, copyrights, mask
works, trade secrets, trademarks or knowhow (or
other intellectual or industrial property rights
recognized under any state's or country's
intellectual property laws) which the Company
(including its Subsidiaries) owns or has the right
to use, on terms and conditions not approved by a
majority of the Board, which shall include the
affirmative vote of a majority, and in no event
less than two, of the Continuing Directors;
(B) except to the extent set forth
in Section 11(a)(iv) below, any Person (other than
an Exempt Person), alone or together with its
Affiliates and Associates, shall, at any time
after January 20, 1997, become the Beneficial
Owner of 15% or more of the shares of Common Stock
then outstanding, other than pursuant to any
transaction set forth in Section 13(a) hereof, or
any Exempt Person who is the Beneficial Owner of
15% or more of the outstanding Common Stock shall
fail to continue to qualify as an Exempt Person;
or
(C) during such time as there is
an Acquiring Person, there shall be any
reclassification of securities (including any
reverse stock split), or any recapitalization of
the Company, or any merger or consolidation of the
Company with any of its Subsidiaries or any other
transaction or series of transactions involving
the Company or any of its Subsidiaries (whether or
not with or into or otherwise involving an
Acquiring Person or any Affiliate or Associate of
such Acquiring Person) which has the effect,
directly or indirectly, of increasing by more than
1% the proportionate share of the outstanding
shares of any class of equity securities of the
Company or any of its Subsidiaries, or securities
exercisable for or convertible into equity
securities of the Company or any of its
Subsidiaries, directly or indirectly owned by any
Acquiring Person or any Affiliate or Associate of
any Acquiring Person,
then, subject to the last sentence of Section 23(a) hereof,
and except as otherwise provided in this Section 11, each
holder of a Right shall thereafter have a right to receive
for each Right, upon exercise thereof in accordance with the
terms of this Rights Agreement and payment of the Purchase
Price, such number of shares of
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Common Stock as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then
number of shares of Common Stock for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and (y) dividing that product (such
product, following such first occurrence, shall be referred
to as the "Purchase Price" with respect to each Right for
all purposes of this Agreement) by 50% of the Current Market
Price per share of Common Stock on the date of such first
occurrence (such number of shares is herein called the
"Adjustment Shares"); provided that the Purchase Price and
the number of Adjustment Shares shall be further adjusted as
provided in this Agreement to reflect any events occurring
after the date of such first occurrence; and provided,
further, that if the transaction that would otherwise give
rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be
made pursuant to this Section 11(a)(ii). Notwithstanding
the foregoing, upon the occurrence of a Section 11(a)(ii)
Event, any Rights that are or were at any time on or after
the earlier of the Stock Acquisition Date or the
Distribution Date beneficially owned by the Acquiring Person
or any Associate or Affiliate of the Acquiring Person shall
become void and any holder of such Rights shall thereafter
have no right to exercise such Rights under any provision of
this Rights Agreement.
(iii) In the event that the number of shares
of Common Stock which are authorized by the Company's
certificate of incorporation but not outstanding or reserved
for issuance for purposes other than upon exercise of the
Rights is not sufficient to permit the exercise in full of
the Rights in accordance with Section 11(a)(ii) and the
Rights shall become so exercisable, to the extent permitted
by applicable law and any agreements in effect on the date
hereof to which the Company is a party, the Company shall:
(A) determine the value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value") and (B)
with respect to each Right, upon exercise of such Right,
issue shares of Common Stock to the extent available for the
exercise in full of such Right and, to the extent shares of
Common Stock are not so available, make adequate provision
to substitute for the Adjustment Shares not received upon
exercise of such Right (1) cash, (2) other equity securities
of the Company (including, without limitation, shares, or
units of shares, of preferred stock which, by virtue of
having dividend, voting and liquidation rights substantially
comparable to those of the Common Stock, are deemed in good
faith by the Board of Directors of the Company to have
substantially the same value as shares of Common Stock (such
shares or units of shares of preferred stock are herein
called "Common Stock Equivalents")), (3) debt securities of
the Company, (4) other assets, or (5) any combination of the
foregoing, having a value which, when added to the value of
the shares of Common Stock actually issued upon exercise of
such Right, shall have an aggregate value equal to the
Current Value, where such aggregate value
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has been determined in good faith by the Board of Directors
of the Company based upon the advice of a nationally
recognized independent investment banking firm selected in
good faith by the Board of Directors of the Company;
provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B)
above within thirty days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the
date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to
the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the
excess of the Current Value over the Purchase Price;
provided further that, notwithstanding anything contained
herein to the contrary, in no event shall the aggregate
value of any cash, equity securities other than Common
Stock, debt securities and other assets issued by the
Company upon exercise of the Rights exceed the amount of
cash that the Company would be entitled to receive in
payment of the Purchase Price upon exercise in full of the
then exercisable Rights; and provided further that the
Company shall have the option, but not the obligation, to
require actual payment of the Purchase Price upon exercise
of a Right only to the extent that the Purchase Price
exceeds the amount of cash that the holder of such Right
would be entitled to receive from the Company pursuant to
this Section 11(a)(iii). If the Board of Directors of the
Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights,
the thirty day period set forth above may be extended to the
extent necessary, but not more than one hundred twenty days
after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek shareholder approval for the authorization
of such additional shares (such thirty day period, as it may
be extended, is herein called the "Substitution Period").
To the extent that the Company determines that some action
need be taken pursuant to the first and/or second sentence
of this Section 11(a)(iii), the Company (x) shall provide,
subject to the last sentence of Section 11(a)(ii) hereof,
that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value
of the Common Stock shall be the Current Market Price per
share of the Common Stock on Section 11(a)(ii) Trigger Date
and the per share or per unit value of any "Common Stock
Equivalent" shall be deemed to equal the Current Market
Price per share of
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the Common Stock on such date. The Board of Directors may,
but shall not be required to, establish procedures to
allocate the right to receive Common Stock upon the exercise
of the Rights among holders of Rights pursuant to this
Section 11(a)(iii).
(iv) Notwithstanding anything in Section
11(a)(ii) to the contrary, there shall not be deemed to have
occurred a Section 11(a)(ii) Event if (A) any Person shall
have inadvertently become the Beneficial Owner of 15% of
more of the shares of Common Stock then outstanding or (B)
any Exempt Person shall have inadvertently failed to
continue to qualify as an Exempt Person, and, in either
case, within ten days after the date upon which the Company
shall first become aware of the occurrence of such an event,
the Board of Directors in its sole discretion (1) approves
the Beneficial Ownership interest then held by such Person
or (2) provides such Person a thirty day period to divest a
sufficient number of shares of Common Stock so as to
decrease the beneficial ownership of such Person to less
than 15% of the shares of Common Stock then outstanding or
to requalify as an Exempt Person, and such Person has so
divested at the end of any such thirty day period.
(b) In case the Company shall fix a record date for
the issuance of rights (other than the Rights), options or warrants to all
holders of Common Stock entitling them to subscribe for or purchase (for a
period expiring within forty-five calendar days after such record date) Common
Stock, shares having the same rights, privileges and preferences as the Common
Stock ("Equivalent Common Stock") or securities convertible into Common Stock
or Equivalent Common Stock at a price per share of Common Stock or Equivalent
Common Stock (or having a conversion price per share, if a security convertible
into Common Stock or Equivalent Common Stock) less than the Current Market
Price per share of Common Stock on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common
Stock and/or Equivalent Common Stock (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
current market price, and the denominator of which shall be the number of
shares of Common Stock outstanding on such record date, plus the number of
additional shares of Common Stock and/or Equivalent Common Stock to be offered
for subscription or purchase (or into which the convertible securities so to
be offered are initially convertible). In case such subscription price may be
paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such non-cash consideration shall be as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent. Shares of Common Stock
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event that such
rights or warrants are not so issued, the Purchase Price shall be
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adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash, assets (other than
a dividend payable in Common Stock, but including any dividend payable in stock
other than Common Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the Current Market Price per share of Common Stock on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to a share of Common Stock and the denominator of which
shall be such Current Market Price per share of Common Stock. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such
record date had not been fixed.
(d) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii) hereof, the
"Current Market Price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of the Common Stock for
the thirty consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purpose of computations made pursuant
to Section 11(a)(iii) hereof, the "Current Market Price" per share of the
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of the Common Stock for the ten consecutive Trading Days
immediately following such date; provided, however, that in the event that the
Current Market Price per share of the Common Stock is determined during a
period following the announcement by the issuer of the Common Stock of (i) any
dividend or distribution on the Common Stock (other than a regular quarterly
cash dividend and other than the Rights), (ii) any subdivision, combination or
reclassification of the Common Stock, and prior to the expiration of the
requisite thirty Trading Day or ten Trading Day period, as set forth above, the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification occurs, then, and in each such
case, the Current Market Price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the NASDAQ or, if the
shares of Common Stock are not listed or admitted to trading on the NASDAQ, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted sale
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price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the NASDAQ or such other system
then in use, or, if on any such date the shares of Common Stock are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock
selected by the Board of Directors of the Company. If on any such date no
market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board of Directors of
the Company shall be used. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading is open for the transaction of business or,
if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, "Current Market Price" per share
shall mean the fair value per share as determined in good faith by the Board of
Directors of the Company whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Common Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m)
hereof, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect
to the Common Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
shares of Common Stock purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of shares
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of Common Stock (calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of shares covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price or any adjustment to the number of shares of
Common Stock for which a Right may be exercised, to adjust the number of
Rights, in lieu of any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
shares of Common Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least ten days later than the date
of the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Common Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the number of
shares which were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value of the shares
of Common Stock issuable upon exercise of the Rights, the Company shall take
any corporate action, including using its best efforts to obtain any required
shareholder approvals, which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Purchase Price.
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(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date the shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Common Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares of Common Stock and other capital stock
or securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Common Stock, (ii) issuance for cash of any
shares of Common Stock at less than the current market price, (iii) issuance
for cash of shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common Stock shall
not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company), (ii) merge with or into any
other Person (other than a Subsidiary of the Company), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one transaction or
a series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to, any other Person or Persons (other than the Company and/or any
of its Subsidiaries), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the Rights.
Section 12. Certification of Adjustments. Whenever an adjustment is
made as provided in Sections 11 and 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such
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adjustment and a brief statement of the facts giving rise to such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of Common Stock) in accordance
with Section 25 hereof. Notwithstanding the foregoing sentence, the failure of
the Company to give such notice shall not affect the validity of or the force
or effect of or the requirement for such adjustment. The Rights Agent shall be
fully protected in relying on any certificate prepared by the Company pursuant
to Sections 11 and 13 and on any adjustment therein contained. Any adjustment
to be made pursuant to Sections 11 and 13 of this Rights Agreement shall be
effective as of the date of the event giving rise to such adjustment.
Section 13. Consolidation; Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, at any time on or after the
Distribution Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person or Persons and the Company shall
not be the surviving or continuing corporation of such consolidation or
merger, or (y) any Person or Persons shall consolidate with, or merge with and
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or of the Company or cash or any other property, or (z) the Company or
one or more of its Subsidiaries shall sell or otherwise transfer to any other
Person or any Affiliate or Associate of such Person, in one or more
transactions, or the Company or one or more of its Subsidiaries shall sell or
otherwise transfer to any Person in one or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole), then, on the
first occurrence of any such event, proper provision shall be made so that (i)
each holder of record of a Right shall thereafter have the right to receive,
upon the exercise thereof and payment of the Purchase Price in accordance with
the terms of this Rights Agreement, such number of shares of validly issued,
fully paid and nonassessable and freely tradeable common stock of the Principal
Party (as defined herein) not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of shares of
Common Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event hereof has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
Purchase Price in effect immediately prior to the first occurrence of a Section
11(a)(ii) Event by the number of shares of Common Stock for which a Right was
exercisable immediately prior to such first occurrence of a Section 11(a)(ii)
Event) and (2) dividing that product (such product, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for all purposes of this Agreement) by 50% of the current market price
(determined as provided in Section 11(d) hereof with respect to the Common
Stock) per share of the common stock of such Principal Party on the date of
consummation of such Section 13 Event (or the fair market value on such date of
other securities or property of the Principal Party, as provided for herein);
provided that the Purchase Price and the number of shares
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of common stock of such Principal Party issuable upon exercise of each Right
shall be further adjusted as provided in this Agreement to reflect any events
occurring after the date of the first occurrence of a Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Rights Agreement; (iii) the term "Company" for all purposes of
this Rights Agreement shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof
shall only apply to such Principal Party following the first occurrence of a
Section 13 Event; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of
shares of its common stock in accordance with Section 9 hereof) in connection
with the consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of common stock thereafter
deliverable upon the exercise of the Rights; provided, however, that, upon the
subsequent occurrence of any merger, consolidation, sale of all or
substantially all assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect of such Principal
Party, each holder of a Right shall thereupon be entitled to receive, upon
exercise of a Right and payment of the Purchase Price, such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had he, at the time of such transaction, owned the shares of common
stock of the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described
in (x) or (y) of the first sentence of Section 13(a) hereof:
(A) the Person that is the issuer of the securities into
which shares of Common Stock of the Company are converted in
such merger or consolidation, or, if there is more than one
such issuer, the issuer the common stock of which has the
greatest market value or (B) if no securities are so issued,
(x) the Person that is the other party to the merger or
consolidation and that survives said merger or
consolidation, or, if there is more than one such Person,
the Person the common stock of which has the greatest market
value or (y) if the Person that is the other party to the
merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or
consolidation (including the Company if it survives); and
(ii) in the case of any transaction described
in (z) of the first sentence in Section 13(a) hereof, the
Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same
portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or
earning power cannot be
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determined, whichever of such Persons as is the issuer of
common stock having the greatest market value of shares
outstanding;
provided, however, that in any such case described in the foregoing (b)(i) or
(b)(ii), if the common stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered under Section
12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the
term "Principal Party" shall refer to such other Person, or if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the common stock
of all of which are and have been so registered, the term "Principal Party"
shall refer to whichever of such Persons is the issuer of the common stock
having the greatest market value of shares outstanding.
(c) The Company shall not consummate any
consolidation, merger, sale or transfer referred to in Section 13(a) unless
prior thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed in
accordance with their terms and that such consolidation, merger, sale or
transfer of assets shall not result in a default by the Principal Party under
this Rights Agreement as the same shall have been assumed by the Principal
Party pursuant to Sections 13(a) and (b) hereof and further providing that, as
soon as practicable after executing such agreement pursuant to this Section 13,
the Principal Party will:
(i) prepare and file a registration
statement under the Securities Act, if necessary, with
respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become
effective as soon as practicable after such filing and use
its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the date of expiration of the
Rights, and similarly comply with applicable state
securities laws;
(ii) use its best efforts, if the common
stock of the Principal Party shall become listed on a
national securities exchange, to list (or continue the
listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if
the common stock of the Principal Party shall not be listed
on a national securities exchange, to cause the Rights and
the securities purchasable upon exercise of the Rights to be
listed by the NASDAQ or another national securities
exchange;
(iii) deliver to holders of the Rights
historical financial statements for the Principal Party
which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the
Exchange Act; and
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(iv) obtain waivers of any rights of first
refusal or preemptive rights in respect of the shares of
common stock of the Principal Party subject to purchase upon
exercise of outstanding Rights.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been exercised
shall thereafter be exercisable in the manner described in Section 13(a). The
provisions of this Section 13 shall similarly apply to all successive Section
13 Events.
(d) Furthermore, in case the Principal Party which is to be a
party to a transaction referred to in this Section 13 has a provision in any of
its authorized securities or in its Certificate of Incorporation or Bylaws or
other instrument governing its corporate affairs, which provision would have
the effect of (i) causing such Principal Party to issue, in connection with, or
as a consequence of, the consummation of a transaction referred to in this
Section 13, shares of common stock of such Principal Party at less than the
then current market price per share (determined pursuant to Section 11(b)
hereof) or securities exercisable for, or convertible into, common stock of
such Principal Party at less than such then current market price (other than to
holders of Rights pursuant to this Section 13) or (ii) providing for any
special payment, tax or similar provisions in connection with the issuance of
the Common Stock of such Principal Party pursuant to the provisions of Section
13; then, in such event, the Company hereby agrees with each holder of Rights
that it shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been cancelled, waived or amended, or that
the authorized securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to
the holders of record of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the then current market value of a whole Right. For the
purposes of this Section 14(a), the then current market value of a Right shall
be determined in the same manner as the Current Market Price of a share of
Common Stock shall be determined pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares. In lieu of issuing
fractions of shares of Common Stock, there shall be paid to the holders of
record of Right Certificates at the time such Right Certificates are exercised
as herein provided an amount in cash equal to the same fraction of the then
current market value of a share of
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Common Stock. For purposes of this Section 14(b), the then current market
value of a share of Common Stock shall be the Current Market Price thereof as
determined pursuant to Section 11(d) hereof.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of
this Rights Agreement are vested in the respective holders of record of the
Right Certificates (and, prior to the Distribution Date, the holders of record
of the Common Stock); and any holder of record of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company or any other Person to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and,
accordingly, that they will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will
not be evidenced by a Right Certificate and will be transferable only in
connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right
Certificates will be transferable only on the registry books of the Rights
Agent if surrendered at the shareholder services office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificate or the
associated Common Stock certificate made by anyone other than the Company or
the Rights Agent or the transfer agent of the Common Stock) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
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No holder of a Right, as such, shall be entitled to vote,
receive dividends in respect of or be deemed for any purpose to be the holder
of Common Stock or any other securities of the Company which may at any time be
issuable upon the exercise of the Rights, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as set forth in Section 24 hereof), or to receive
dividends or subscription rights in respect of any such stock or securities, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Rights Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent for anything done or omitted to be done by the Rights Agent in connection
with the acceptance and administration of this Rights Agreement, including the
cost and expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Rights Agreement in
reliance upon any Right Certificate, certificate for Common Stock or other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, guaranteed, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Rights Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Rights Agreement, any of the
Right Certificates
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shall have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under
this Rights Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman,
Chief Executive Officer, 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 shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Rights Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this Rights
Agreement or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
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(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Rights Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Rights
Agreement or in any Right Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or 13 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or other securities to be issued
pursuant to this Rights Agreement or any Right Certificate or as to whether any
shares of Common Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder
from the Chairman, the Chief Executive Officer, 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 officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not the Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
contained in the form of assignment or the form of election to purchase set
forth on the reverse thereof, as the case may be, has either not been completed
or
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indicates an affirmative response to clause 1 and/or 2 thereof, the Rights
Agent shall not take any further action with respect to such requested exercise
of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or without cause)
upon 30 days' notice in writing, mailed to the Rights Agent or any successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Stock by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal of
a Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall fail 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 a Right Certificate (who
shall, with such notice, submit his Right Certificate for inspection by the
Company), then the incumbent Rights Agent or the holder of record of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or any State thereof, in
good standing, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock,
and mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Expiration Date, the Purchase Price per share and
the number or kind of class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement.
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Section 23. Redemption.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the Close of Business on the
Distribution Date, or (ii) the Close of Business on the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price, without any interest thereon. Within 10 days
after the action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the holders of the
then outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent of
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. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. The failure to give notice required by this
Section 23(b) or any defect therein shall not affect the legality or validity
of the action taken by the Company.
Section 24. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date,
shall propose (i) hereof to effect any of the transactions referred to in
Section 11(a)(i) hereof or to pay any dividend to the holders of record of its
Common Stock payable in stock of any class or to make any other distribution to
the holders of record of its Common Stock (other than a regular periodic cash
dividend at a rate not in excess of 125% of the rate of the last cash dividend
theretofore paid), or (ii) to offer to the holders of record of its Common
Stock options, warrants, or other rights to subscribe for or to purchase shares
of Common Stock (including any security convertible into or exchangeable for
Common Stock) or shares of stock of any class or any other securities, options,
warrants, convertible or exchangeable securities or other rights, or (iii) to
effect any reclassification of its Common Stock or any recapitalization or
reorganization of the Company, or (iv) to effect any consolidation or merger
with or into, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person or Persons, or (v)
to effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of record of a Right
Certificate, in accordance with Section 25 hereof, notice of such proposed
action, which shall specify the record date for the purposes of such
transaction referred to in Section 11(a)(i), or such dividend or distribution,
or the date on which such reclassification, recapitalization, reorganization,
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consolidation, merger, sale or transfer of assets, liquidation, dissolution, or
winding up is to take place and the record date for determining participation
therein by the holders of record of Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record date for
determining holders of record of the Common Stock for purposes of such action,
and in the case of any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of record of Common Stock, whichever shall be the earlier. The failure
to give notice required by this Section 24 or any defect therein shall not
affect the legality or validity of the action taken by the Company or the vote
upon any such action.
(b) In case any of the transactions referred to in
Section 11(a)(ii) or Section 13 of this Rights Agreement are proposed, then, in
any such case, the Company shall give to each holder of Rights, in accordance
with Section 25 hereof, notice of the proposal of such transaction at least 10
days prior to consummating such transaction, which notice shall specify the
proposed event and the consequences of the event to holders of Rights under
Section 11(a)(ii) or Section 13 hereof, as the case may be, and, upon
consummating such transaction, shall similarly give notice thereof to each
holder of Rights.
Section 25. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of record of
any Right Certificate or Right to or on the Company shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
The Enstar Group, Inc.
000 Xxxxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
record of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right
Certificate or Right shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder
as it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
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Section 26. Supplements and Amendments. Prior to the Close of
Business on the Distribution Date and subject to extension by the Board of
Directors by amendment hereof, and except as provided in the penultimate
sentence of this Section 26, the Company may in its sole and absolute
discretion and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Rights Agreement (including an amendment that
provides that the Rights shall become exercisable, in lieu of a share or shares
of Common Stock, for Common Stock Equivalents) without the approval of any
holders of the Rights or the Common Stock. From and after the close of
business on the Distribution Date and subject to extension by the Board of
Directors by amendment hereof, and except as provided in the penultimate
sentence of this Section 26, the Company may and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or (iii) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable; provided, that no such supplement or amendment shall adversely
affect the interests of the holders of Right Certificates (other than any
interest an Acquiring Person or an Affiliate or Associate of an Acquiring
Person has other than as a holder of Rights). Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Rights Agreement to the contrary,
(i) no supplement or amendment shall be made which changes the Redemption Price
or the Final Expiration Date, and (ii) during the 120-day period after any date
of a change (resulting from a proxy or consent solicitation) in a majority of
the Board of Directors of the Company in office at the commencement of such
solicitation, this Rights Agreement may be supplemented or amended only if (A)
there are directors then in office who were in office at the commencement of
such solicitation and (B) the Board of Directors of the Company, with the
concurrence of a majority of such directors then in office, determines that
such supplement or amendment is, in their judgment, in the best interests of
the Company and its shareholders and, after the Distribution Date, the holders
of the Right Certificates. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
Section 27. Successors. All of the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 28. Benefits of this Rights Agreement. Nothing in this
Rights Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) any legal
or equitable right, remedy or claim under this Rights Agreement; but this
Rights Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent and the holders of record of the Right Certificates (and,
prior to the Distribution Date, the Common Stock).
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Section 29. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State; provided, however, that the
rights and obligations of the Rights Agent shall be governed by the laws of the
State of New York (or state of incorporation of any successor Rights Agent).
Section 30. Counterparts. This Rights Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 31. Descriptive Headings. Descriptive headings of the
several sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 32. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, illegal, or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
THE ENSTAR GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer,
Vice-President of Corporate
Taxes, Secretary
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
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EXHIBIT A
[Form of Right Certificate]
Certificate No.R- Rights
-------
NOT EXERCISABLE AFTER JANUARY 20, 2007 OR EARLIER IF
REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. IN THE EVENT
THAT THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE
ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR A
TRANSFEREE OF THE RIGHTS PREVIOUSLY OWNED BY SUCH
PERSONS, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID.
Right Certificate
The Enstar Group, Inc.
This certifies that _________________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of January 20, 1997 ("Rights Agreement") between
The Enstar Group, Inc., a Delaware corporation ("Company"), and American Stock
Transfer & Trust Company ("Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (Montgomery, Alabama time) on January 20,
2007 at the shareholder services office of the Rights Agent, or its successors
as Rights Agent, in New York, New York, one fully paid and nonassessable share
of voting common stock, par value $.01 per share ("Common Stock"), of the
Company at a purchase price of $40.00 as the same may from time to time be
adjusted in accordance with the Rights Agreement ("Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Common Stock which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Common Stock, or other
40
property, may be acquired upon exercise of the Rights evidenced by this Right
Certificate, as provided by the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of record of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the shareholder services office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder of record to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof, another Right Certificate
or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of the
close of business on (i) the Distribution Date, and (ii) the Final Expiration
Date.
No fractional shares of Common Stock shall be issued upon the exercise
of any Right or Rights evidenced hereby, and in lieu thereof, as provided in
the Rights Agreement, fractions of shares of Common Stock shall receive an
amount in cash equal to the same fraction of the then current market value of a
share of Common Stock.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Stock or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors;
or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action or to receive notice of meetings or
other actions affecting shareholders or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
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WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal, dated as of ______________ 19__.
ATTEST: THE ENSTAR GROUP, INC.
By:
------------------------- -----------------------------
Secretary Name:
Title:
Countersigned:
By:
----------------------
Authorized signature
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________________ hereby sells, assigns and
transfers unto ________________________________________________________________
(Please print name and address of transferee)
_______ Rights evidenced by this Right Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
________ Attorney to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ___________ , 19__.
__________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are
[ ] are not being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement);
and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or any transferee of such
Persons.
Dated: ____________, 19__
__________________________________
Signature
Signature Guaranteed:
43
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to
exercise the Right Certificate.)
To: The Enstar Group, Inc.
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Right Certificate to purchase the shares of Common
Stock issuable upon the exercise of such Rights and requests that certificates
for such share(s) be issued in the name:
___________________________________________________________
(Please print name and address)
___________________________________________________________
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
____________________________________________
(Please print name and address)
____________________________________________
Dated: ______________, 19__
____________________________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
45
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or any transferee of such
Persons.
Dated: ______________, 19___
__________________________________
Signature
Signature Guaranteed:
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