RIGHTS AGREEMENT
between
CPI CORP.
and
Xxxxxx Trust and Savings Bank,
Rights Agent
Dated as of March 13, 2000
RIGHTS AGREEMENT
This Rights Agreement, dated as of March 13, 2000 (the "AGREEMENT"), by and
between CPI CORP., a Delaware corporation (the "COMPANY"), and Xxxxxx Trust and
Savings Bank, a national banking association (the "RIGHTS AGENT").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "RIGHT") for each Common Share
(as hereinafter defined) of the Company outstanding at the close of business on
March 23, 2000 (the "RECORD DATE"), each Right representing the right to
purchase one one-hundredth of a share of Series A Participating Preferred Stock,
without par value ("SERIES A PREFERRED Stock"), of the Company having the rights
and preferences set forth in the form of Certificate of Designations with
respect to the Series A Preferred Stock, a copy of which is attached hereto as
Exhibit A and incorporated herein. The Board of Directors has further authorized
the issuance of one Right (as such number may hereinafter be adjusted pursuant
to the provisions of Section 11(p) hereof) with respect to each Common Share
that shall become outstanding (whether originally issued or delivered from the
Company's treasury) after the Record Date and on or prior to the earliest of the
Distribution Date, the Redemption Date, or the Final Expiration Date.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall
hereafter become the Beneficial Owner (as such term is hereinafter defined)
of 20% or more of the Common Shares then outstanding, but shall not include
the Company, any Subsidiary (as such term is hereinafter defined) of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any Person or entity organized, appointed, or established by
the Company pursuant to any such plan. Notwithstanding the foregoing, no
Person or group shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the number
of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person or group to 20% or more of the Common
Shares of the Company then outstanding; provided, however, that if a Person
or group shall become the Beneficial Owner of 20% or more of the Common
Shares of the Company then outstanding by reason of such an acquisition by
the Company and shall, after such acquisition, become the Beneficial Owner
of any additional Common Shares, then such Person or group shall be deemed
to be an "Acquiring Person." Notwithstanding the foregoing, if the Board
determines that a person who would otherwise be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a), has
become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would
no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to
be an "Acquiring Person" for any purposes of this Agreement.
(b) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
as in effect on the Record Date.
(c) A Person shall be deemed the "BENEFICIAL OWNER" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement, or understanding
(whether or not in writing) or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights at any time before the
occurrence of a Triggering Event (as defined in Section l(n) below)
but thereafter including Rights acquired from and after the
Distribution Date (as defined in Section 3(a) below) other than Rights
acquired pursuant to Section 3(a), Section 11(i) , or Section 22
hereof), warrants, or options, or otherwise; provided, however, that a
Person shall not be deemed to be the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, and provided, further, that a person shall
not be deemed to be the Beneficial Owner of, or to beneficially own,
securities that such Person has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
upon the exercise of conversion rights conferred in any class or
series of preferred stock, without par value, of the Company issued
prior to the Distribution Date (as defined in Section 3(a) hereof) if
the resolutions of the Board (as hereafter defined) providing for the
issuance of such class or series of preferred Stock shall specifically
refer to this Rights Agreement and provide that the right to acquire
securities upon the exercise of conversion rights so conferred shall
not be deemed to constitute beneficial ownership of such securities.);
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act, as in
effect on the Record Date) of (including pursuant to any agreement,
arrangement or understanding, whether or not in writing); provided,
however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security under this subparagraph (iii) as a
result of an agreement, arrangement, or understanding to vote such
security if such agreement, arrangement, or understanding (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, (B) is not also then reportable by such person on
Schedule 13D under the Exchange Act (or any comparable successor
report) and (C) does not constitute a trust, proxy, power of attorney
or other device with the purpose or effect of allowing two or more
persons, acting in concert, to avoid being deemed "beneficial owners"
of such security or otherwise avoid the status of "Acquiring Person"
under the terms of this Agreement or as part of a plan or scheme to
evade the reporting requirements under Schedule 13D or Section 13(d)
or 13(g) of the Exchange Act; or
(iv) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement, or understanding (whether or not in writing),
for the purpose of, or with respect to, acquiring, holding, voting
(except pursuant to a revocable proxy as described in the proviso to
subparagraph (iii) of this paragraph (c)), or disposing of any voting
securities of the Company, provided, however, that nothing in this
paragraph (c) shall cause a Person engaged in business as an
underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until
the expiration of 40 days after the date of such acquisition, and then
only if such securities continue to be owned by such Person at such
expiration of forty days.
(d) "BOARD" means the Board of Directors of the Company.
(e) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in St. Louis, Missouri, the State of
New York, or the State in which the Rights Agent maintains its principal
place of business are authorized or obligated by law or executive order to
close.
(f) "CLOSE OF BUSINESS" on any given date shall mean 4:00 P.M., St.
Louis, Missouri, time, on such date; provided, however, that if such date
is not a Business Day it shall mean 4:00 P.M., St. Louis, Missouri, time,
on the next succeeding Business Day.
(g) "COMMON SHARES" when used with reference to the Company shall mean
shares of Common Stock, par value $0.40 per share, of the Company. "Common
Shares" or "common shares," when used with reference to any Person other
than the Company, shall mean the capital stock of such Person with the
greatest voting power or the equity securities or other equity interest
having power to control or direct the management of such Person.
(h) "PERSON" shall mean any individual, firm, corporation, partnership
or other entity and shall include any successor (by merger or otherwise) of
such entity.
(i) "SECTION 11(A)(II) EVENT" shall mean the event described in
Section 11(a)(ii).
(j) "SECTION 13(A) EVENT" shall mean any event described in clause
(x), (y) or (z) of Section 13(a).
(k) "SERIES A SHARES" shall mean shares of Series A Participating
Preferred Stock, without par value, of the Company, including any
authorized fraction of a Series A Share, unless the context otherwise
requires.
(l) "SHARES ACQUISITION DATE" shall mean the first date of public
announcement (including, without limitation, a report filed pursuant to
Section 13(d) or 14(d) under the Exchange Act) by the Company or an
Acquiring Person indicating that an Acquiring Person has become such, other
than pursuant to a Qualified Offer.
(m) "SUBSIDIARY" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at
least a majority of the directors of such corporation is beneficially
owned, directly or indirectly, by such Person, or otherwise controlled by
such Person.
(n) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or
Section 13(a) Event.
The following terms shall have the meanings indicated in the following
Sections of this Agreement:
(i) "ACT" -- Section 9(c).
(ii) "ADJUSTMENT SHARES" -- Section 11(a)(ii).
(iii) "CURRENT VALUE" -- Section 11(a)(iii).
(iv) "DISTRIBUTION DATE" -- Section 3(a).
(v) "EQUIVALENT PREFERENCE SHARES" -- Section 11(b).
(vi) "FINAL EXPIRATION DATE" -- Section 7(a).
(vii) "PRINCIPAL PARTY" -- Section 13(b).
(viii) "PURCHASE PRICE" -- Sections 4(a), 11(a)(ii) and 13(a).
(ix) "QUALIFIED OFFER" -- Section 11(a)(ii).
(x) "RECORD DATE" --Preamble.
(xi) "REDEMPTION DATE" -- Section 7(a).
(xii) "REDEMPTION PRICE" -- Section 23(a).
(xiii) "RIGHT" -- Preamble.
(xiv) "SERIES A PREFERRED STOCK" -- Preamble.
(xv) "SPREAD" -- Section 11(a)(iii).
(xvi) "SUBSTITUTION PERIOD" -- Section 11(a)(iii).
(xvii) "SUMMARY OF RIGHTS" -- Section 3(b).
(xviii) "TRADING DAY" -- Section 11(d)(i).
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment and agrees to act
as Rights Agent under this Agreement. The Company may from time to time appoint
such co-rights agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the
close of business on the tenth day after the Shares Acquisition Date or (ii) the
close of business on the tenth Business Day (or such later date as may be
determined by the Board) after the date on which a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any Person or
entity organized, appointed, or established by the Company for or pursuant to
the terms of any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange
Act, if upon consummation thereof, such Person would become an Acquiring Person,
in either instance other than pursuant to a Qualified Offer (the earlier of (i)
and (ii) being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of paragraph (b) of this Section 3)
by the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be certificates for Rights)
and not by separate certificates, and (y) the right to receive Right
Certificates (as hereinafter defined) will be transferable only in connection
with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more certificates for Rights, in substantially
the form of Exhibit B hereto (the "Rights Certificates"), evidencing one Right
for each Common Share so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per Common Share has been made
pursuant to Section 11(p) hereof, at the time of distribution of the Right
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Right Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) As soon as practicable following the Record Date, the Company will send
a copy of a Summary of Rights to Purchase Series A Preferred Stock, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder of Common Shares as
of the close of business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the earliest of the Distribution Date,
Redemption Date, or Final Expiration Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof and the registered
holders of the Common Shares shall also be the registered holders of the
associated Rights. Until the earliest of the Distribution Date, the Redemption
Date, or the Final Expiration Date, the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date, shall also
constitute the transfer of the Rights associated with such Common Shares.
(c) Rights shall be issued in respect of all shares of Common Stock which
are issued (whether originally issued or from the Company's treasury) after the
Record Date but prior to the earlier of the Distribution Date, Redemption Date
or Final Expiration Date. Certificates for Common Shares issued after the Record
Date but prior to the earliest of the Distribution Date, the Redemption 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 CPI Corp. and Xxxxxx Trust and Savings Bank, dated
as of March 13, 2000 (the "RIGHTS AGREEMENT"), the terms of
which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of
CPI Corp. and the Rights Agent. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company or the Rights
Agent, Xxxxxx Trust and Savings Bank, or its successors and
assigns, will mail to the holder of this certificate a copy
of the Rights Agreement without charge promptly following
receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Shares
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Shares represented by such certificates.
Section 4. Form of Right Certificates. (a) The Right Certificates (and the
forms of election to purchase Series A Shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries, or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11 and Section 22 hereof, the Right Certificates,
whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one one-hundredths
of a share of Series A Participating Preferred Stock as shall be set forth
therein at the price per one one-hundredth of a Series A Share set forth therein
(the "PURCHASE PRICE"), but the amount and kind of the securities purchasable
upon the exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a), Section 11(i) or
Section 22 hereof that represents Rights beneficially owned by (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring
Person (or such Associate or Affiliate) who becomes a transferee before or
concurrently with the Acquiring Person's becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement, or understanding regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement, or understanding
which has as a primary purpose or effect avoidance of Section 7(e) hereof, and
any Right Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement, or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Right Certificate and the
Rights represented hereby may become void in the
circumstances specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration. (a) The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board (if he
is the Chief Executive Officer) or its President, any Executive Vice President,
or any Vice President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof, attested by the
Secretary or any Assistant Secretary of the Company, or shall bear a facsimile
thereof. The Right Certificates shall not be valid for any purpose unless
countersigned (manually or by facsimile) by the Rights Agent. In case any
officer of the Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal offices, books for registration and transfer of the
Right Certificates issued or to be 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
certificate number of each of the Right Certificates, and the date of each of
the Right Certificates.
Section 6. Transfer, Split Up, Combination, and Exchange of Right
Certificates; Mutilated, Destroyed, Lost, or Stolen Right Certificates. (a)
Subject to the provisions of Sections 4(b), 7(e), and 14 hereof, at any time
after the close of business on the Distribution Date, and at or prior to the
close of business on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than Rights
Certificates representing Rights that may have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined, or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of Series A Shares (or, following a Triggering Event,
Common Shares, other securities or property, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine, or exchange 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 transferred, split up,
combined, or exchanged at the principal office of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Right Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Sections 4(b), 7(e), 14 and 24 hereof, countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination, or exchange of
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction, or mutilation of a Right
Certificate, and, in case of loss, theft, or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will execute and deliver a new
Right Certificate of like tenor to the Rights Agent for countersignature and
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) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Sections 9(c), 11(a)(iii) and 23(a) hereof) 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, to the Rights Agent at the principal office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for
each one one-hundredth of a Series A Share as to which the Rights are exercised,
at or prior to the close of business on the earliest of (i) March 13, 2010 (the
"Final Expiration Date"), or (ii) the date on which the Rights are redeemed or
exchanged as provided in Sections 23 and 24 hereof (the "Redemption Date").
(b) The Purchase Price for each one one-hundredth of a Series A Share
pursuant to the exercise of a Right shall initially be Ninety-Six Dollars
($96.00), shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the Series A Shares (or other shares, securities, or
property, as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash, or by certified check
or cashier's check payable to the order of the Company, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i)(A) requisition from any
transfer agent of the Series A Shares (or make available, if the Rights Agent is
the transfer agent for such shares) certificates for the number of Series A
Shares to be purchased (and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests), or (B) if the Company shall
have elected to deposit the Series A Shares issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a Series A
Share as are to be purchased (in which case certificates for the Series A Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent), and the Company hereby directs the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or, upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, and (iv) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated to issue other
securities (including Common Shares) or assets pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that such other securities
or assets are available for distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require before the occurrence of
a Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.
(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 Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee from an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board has determined is part of a plan,
arrangement, or understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and any holder of such Rights shall thereupon have no rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates, or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of any Right Certificate upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Right 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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled 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 other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Series A Shares; Registration.
(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Series A Shares and authorized and
issued shares of Series A Shares held in its treasury the number of Series A
Shares that will be sufficient to permit the exercise in full of all outstanding
Rights. Prior to the occurrence of a Triggering Event, the Company shall not be
obliged to cause to be reserved and kept available out of its authorized and
unissued Common Shares or shares of preference stock (other than Series A
Shares), any Common Shares or any shares of preference stock (other than the
Series A Shares) to permit exercise of outstanding Rights.
(b) If the Series A Shares issuable upon the exercise of Rights may be
listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) If then required by applicable law, the Company shall use its best
efforts to (i) file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event as to which the consideration
to be delivered by the Company upon exercise of the Rights has been determined
pursuant to this Agreement, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933 (the "ACT"), with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities, and
(B) the date of the expiration of the Rights. If then required by applicable
law, the Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed 90 days after the date set forth in
clause (i) of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective
or comply with such state securities or "blue sky" laws. 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 if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law, or a registration statement shall not have
been declared effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Series A Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized, issued and fully paid and nonassessable shares.
(e) The Company 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 Series A
Shares (or Common Shares and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax that 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 the Series A Shares (or Common Shares and/or other securities, as the case
may be) in a name other than that of the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates for Series A Shares (or Common Shares and/or other securities,
as the case may be) upon the exercise of any Rights 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. Series A Shares Record Date. Each person in whose name any
certificate for Series A Shares (or Common Shares and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Series A Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the 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 Series A Shares (or
Common Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Series A Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company are open. Before
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled (in such holder's capacity as such) to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote any shares, to
receive dividends or other distributions with respect to any shares or to
exercise any preemptive rights with respect to any shares, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right, and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall, at any time after the date of
this Agreement, (A) declare a dividend on the Series A Shares payable in
Series A Shares, (B) subdivide the outstanding Series A Shares, (C) combine
the outstanding Series A Shares into a smaller number of Series A Shares,
or (D) issue any shares of its capital stock in a reclassification of the
Series A Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision,
combination, or reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock, which, if
such Right had been exercised immediately prior to such date and at a time
when the Series A Shares transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination, or reclassification. If
an event occurs that requires an adjustment under both this Section
11(a)(i) and Section 11(a)(ii), 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 that any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any entity organized, appointed, or
established by the Company for or pursuant to the terms of any such plan),
alone or together with its Affiliates and Associates, shall become an
Acquiring Person, unless the event causing such person to become an
Acquiring Person is a transaction set forth in Section 13(a) hereof, or is
an acquisition of Common Shares pursuant to a tender or exchange offer for
all outstanding Common Shares at a price and on terms determined by at
least a majority of the members of the Board who are not officers of the
Company and who are not representatives, nominees, Affiliates or Associates
of an Acquiring Person, after receiving advice from one or more investment
banking firms, to be (a) at a price that is fair to the stockholders
(taking into consideration all factors that such members of the Board deem
relevant, including, without limitation, long-term prospects and value of
the Company and the prices and terms that such members of the Board
believe, in good faith, could reasonably be achieved if the Company's
assets were sold on an orderly basis designed to realize maximum value),
and (b) otherwise in the best interest of the Company and its stockholders
(a "Qualified Offer"), then, in such case, proper provision shall be made
so that each holder of a Right, except as provided below and in Section
7(e) hereof, shall thereafter have a right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of
this Agreement, in lieu of Series A Shares, and subject to the provisions
of Section 11(a)(iii) below, such number of Common Shares of the Company as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-hundredths of a Series A Share
for which a Right was exercisable immediately prior to the first occurrence
of an event set forth in this Section 11(a)(ii), and dividing that product
(which product, following such first occurrence, shall be referred to as
the "Purchase Price" for each Right and for all purposes of this Agreement)
by (y) 50% of the current per share market price of the Common Shares
(determined pursuant to Section 11(d) hereof), but not less than the par
value thereof, on the date of such first occurrence (such number of shares,
being referred to herein as the "Adjustment Shares").
(iii) In the event that the total of the Common Shares that are issued
but not outstanding and authorized but unissued (excluding Common Shares
reserved for issuance pursuant to the specific terms of any indenture,
option plan, or other agreement) is not sufficient to permit the exercise
in full of the Rights in accordance with Section 11(a)(ii) hereof, then the
Board shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right under Section 11(a)(ii))
hereof (the "Current Value") over (2) the Purchase Price (such excess, the
"Spread"), and (B) with respect to each Right (subject to Section 7(e)
hereof), make adequate provision to substitute for, or provide an election
to acquire in lieu of, the Adjustment Shares, upon payment of the
applicable Purchase Price (as such price may thereafter be reduced pursuant
to this Section 11(a)(iii), as set forth below) any combination of the
following having an aggregate value equal to the Current Value (such
aggregate value to be determined by the Board based upon the advice of a
nationally-recognized investment banking firm selected by the Board): (1)
common stock, preferred stock, notes, and/or other securities of one or
more Subsidiaries of the Company, (2) a reduction in the current Purchase
Price, (3) Common Shares, preferred shares and/or other equity securities
of the Company, and/or (4) debt securities, cash, and/or other assets of
the Company; provided, however, if this Section 11(a)(iii) is applicable
and the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within 30 days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires, then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Common Shares
(to the extent available) and then, if necessary, cash in an aggregate
amount equal to the Spread. If the Board shall determine in good faith that
it is likely that sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights, the 30-day period set
forth above may be extended to the extent necessary, but not more than 90
days following the first occurrence of a Section 11(a)(ii) Event, in order
that the Company may seek stockholder approval for the authorization of
such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights,
and (y) may suspend the exercisability of the Rights until the expiration
of the Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension
is no longer in effect. For purposes of this Section 11(a)(iii), the value
of the Common Shares shall be the current per share market price (as
determined pursuant to Section 11(d) hereof) of the Common Shares on the
date of the first occurrence of a Section 11(a)(ii) Event. The provisions
of this Section 11(a)(iii) shall apply only to Common Shares of the Company
and shall not apply to the securities of any other Person.
(b) In case the Company shall fix a record date for the issuance of
rights, options, or warrants to all holders of Series A Shares entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Series A Shares (or shares having the same
rights, privileges, and preferences as the Series A Shares ("equivalent
preference shares")) or securities convertible into Series A Shares or
equivalent preference shares at a price per Series A Share or equivalent
preference share (or having a conversion price per share, if a security
convertible into Series A Shares or equivalent preference shares) less than
the current per share market price of the Series A Shares (as defined in
Section 11(d) hereof) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Series A Shares
outstanding on such record date plus the number of Series A Shares which
the aggregate offering price of the total number of Series A Shares and/or
equivalent preference shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be
the number of Series A Shares outstanding on such record date plus the
number of additional Series A Shares and/or equivalent preference shares to
be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding
on the holders of the Rights. Series A Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights or warrants
are not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the distribution
to all holders of the Series A Shares (including any such distribution made
in connection with a consolidation or merger in which the Company is the
continuing corporation) of any debt securities, cash, or assets (other than
a regular quarterly cash dividend or a dividend payable in Series A Shares)
or subscription rights or warrants (excluding those referred to in Section
11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be
the current per share market price of the Series A Shares (as defined in
Section 11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and binding on the
holders of Rights) of the portion of the cash, assets, or debt securities
so to be distributed or of such subscription rights or warrants applicable
to one Series A Share and the denominator of which shall be such current
per share market price of the Series A Shares (as determined pursuant to
Section 11(d) hereof). Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not
so made, the Purchase Price shall again be adjusted to be the Purchase
Price that would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current per
share market price" of the Common Shares on any date shall be deemed to be
the average of the daily closing prices per Common Share for the 30
consecutive Trading Days immediately prior to such date, and for purposes
of computations made pursuant to Section 11(a)(iii) hereof, the Current
Market Price per Common Share on any date shall be deemed to be the average
of the daily closing prices per Common Share for the ten (10) consecutive
Trading Days immediately following such date; provided, however, that in
the event that the current per share market price of the Common Shares is
determined during a period following the announcement by the issuer of such
Common Shares of a dividend or distribution on such Common Shares payable
in such Common Shares or securities convertible into such Common Shares
(other than the Rights), or any subdivision, combination, or
reclassification of such Common Shares, and prior to the expiration of the
requisite 30 Trading Day or 10 Trading Day period after the ex-dividend
date for such dividend or distribution or the record date for such
subdivision, combination, or reclassification, then, and in each such case,
the "current per share market price" shall be appropriately adjusted to
take into account ex-dividend trading. 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 on the principal
national securities exchange, if any, on which the Common Shares are then
listed or admitted to trading or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc., Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the
Common Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Common Shares selected by the Board. If on any such
date no market maker is making a market in Common Shares, the fair value of
such shares on such date as determined in good faith by the Board shall be
used. The term "Tradubg Day" shall mean a day on which the principal
national securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the
Common Shares are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is not publicly
held or not so listed or traded, "current per share market price" shall
mean the fair value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agents and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Series A Shares shall be determined in the same
manner as set forth above for Common Shares in clause (i) of this Section
11(d). If the current per share market price of the Series A Shares cannot
be determined in the manner provided above, the "current per share market
price" of the Series A Shares shall be conclusively deemed to be the
current per share market price of the Common Shares, multiplied by one
hundred (appropriately adjusted to reflect any stock split, stock dividend,
or similar transaction occurring after the date hereof). If neither the
Common Shares nor the Series A Shares are publicly held or so listed or
traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and binding on the
holders of Rights.
(e) 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 the nearest
ten-thousandth of a Common Share or other share or one-millionth of a
Series A Share as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment provided for in this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(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 property, other securities
(other than shares of capital stock of, the Company), or shares of capital
stock of the Company other than Series A Shares, thereafter the amount of
such property, other securities (other than shares of capital stock of the
Company) and the number of such other shares of capital stock so receivable
upon exercise of any Right (as well as any consideration to be paid
therefor), 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 Series A Shares (and the Purchase Price) contained in this Section
11, and the provisions of Sections 7, 9, 10, 13, and 14 with respect to the
Series A Shares shall apply on like terms to any such property, other
securities and other shares of capital stock.
(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 Series A Shares
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) hereof, upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c) hereof, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Series A Share (calculated to the
nearest one one-millionth of a Series A Share) obtained by (i) multiplying
(x) the number of one one-hundredths of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Series A Shares purchasable upon the exercise
of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one one-hundredths
of a Series A Share for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become the number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be
at least 10 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 Series A Shares issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price per one one-hundredth of a 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 one one-hundredth of the then stated value, if
any, of the Series A Shares issuable upon exercise of the Rights, the
Company shall take any corporate action that may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Series A Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 requires 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 issuing to the holder of any Right exercised after such record date of
the Series A Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Series A Shares 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 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 or permitted by this
Section 11, as and to the extent that in its good faith judgment the Board
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Series A Shares, (ii) issuance wholly for cash of any of
the Series A Shares at less than the current market price, (iii) issuance
wholly for cash of Series A Shares or securities which by their terms are
convertible into or exchangeable for Series A Shares, (iv) dividends on
Series A Shares payable in Series A Shares or (v) issuance of rights,
options, or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Series A Shares shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than
a Subsidiary of the Company in a transaction that complies with Section
11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one or more 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 (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof) if (x) at the time of or
immediately after such consolidation, merger 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) before,
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 shall not, except as permitted by Section 23 or 27 hereof, take
(or permit any Subsidiary to take) any action which at the time it is
reasonably foreseeable will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Record Date and prior to
the Distribution Date (i) declare a dividend on the outstanding Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, (iii) combine the outstanding Common Shares into a smaller number
of shares, or (iv) issue any Shares of its capital stock in a
reclassification of its outstanding capital stock, the number of Rights
associated with each Common Share then outstanding, or issued or delivered
thereafter but prior to the Distribution Date shall be proportionately
adjusted so that the number of Rights thereafter associated with each
Common Share (including other Common Shares issued after the date of such
event, but prior to the Distribution Date) following any such event shall
equal the result obtained by multiplying the number of Rights associated
with each Common Share immediately prior to such event by a fraction, the
numerator of which shall be the total number of Common Shares outstanding
immediately before the occurrence of the event and the denominator of which
shall be the total number of Common Shares outstanding immediately
following the occurrence of such event. For purposes of this Section 11(p),
any Common Shares issued after the Distribution Date, which were not issued
together with a Right (pursuant to the Preamble hereto or by action of the
Board pursuant to Section 22 hereof) shall not be counted as outstanding.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares or
the Series A Shares 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 Common Shares) in accordance
with Section 25 hereof. The Rights Agent shall be fully, protected in relying on
any such certificate and on any adjustment therein contained and shall not be
obligated or responsible for calculating any adjustment nor shall it be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate.
Section 13. Consolidation, Merger, or Sale or Transfer of Assets or Earning
Power. (a) In the event that, following the Shares Acquisition Date, directly or
indirectly (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o) hereof) shall consolidate with, or merge with or 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 Common Shares shall be changed into, or exchanged for stock
or other securities of any other Person or cash or any other property, or (z)
the Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in a single 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 Person or group of related Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper provision shall be made so that
(i) each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the current
Purchase Price, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable Common Shares of the Principal Party (as
hereinafter defined), free and clear of liens, encumbrances, or other adverse
claims and not subject to any rights of call or first refusal, redemption, or
repurchase, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-hundredths of a share of Series
A Shares for which a Right was exercisable immediately prior to the first
occurrence of a Section 13(a) Event (or if a Section 11(a)(ii) Event has
occurred prior to the occurrence of a Section 13(a) Event, multiplying the
number of such one-hundredths of a share of Series A Shares for which a Right is
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence) and dividing the product (which product, following such first
occurrence, shall be referred to as the "Purchase Price" for each Right and for
all purposes of this Agreement) by (2) 50% of the current per share market price
(determined pursuant to Section 11(d) hereof) per Common Share of such Principal
Party on the date of consummation of such Section 13(a) Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13(a) Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13(a) Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
its Common Shares) in connection with the consummation of any such transaction
as may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall thereafter be of no effect following the first
occurrence of a Section 13(a) Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such
merger or consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case in subsections (b)(i) or (ii) of this
Section 13, (1) if the Common Shares of such Person are not at such time and
have not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Shares of which is and has been
so registered, "Principal Party" shall refer to such other Person; (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Shares having the greatest aggregate market value; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person, the
requirements set forth in clauses (1) and (2) of this subsection (b), above,
shall apply to each of the chains of ownership having an interest in such joint
venture as if such party were a "subsidiary" of both or all of such joint
venturers, and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such joint venture bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger, sale,
or transfer unless the Principal Party shall have a sufficient number of
authorized Common Shares, which have not been issued or reserved for issuance,
to permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger, or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final Expiration Date;
(ii) take such all such other action as may be necessary to enable the
Principal Party to issue the securities purchasable upon exercise of the
Rights, including but not limited to the registration or qualification of
such securities under all requisite securities laws of jurisdictions of the
various states and the listing of such securities on such exchanges and
trading markets as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that one 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 become exercisable in
the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (x) and (y)
of Section 13(a) if: (i) such transaction is consummated with a Person or
Persons who acquired Common Shares pursuant to a tender or exchange offer for
all outstanding Shares of Common Shares which is a Qualified Offer (or a wholly
owned Subsidiary of any such Person or Persons); (ii) the price per share for
the Common Share offered in such transaction is not less than the price per
share for the Common Share paid to all holders of shares of Common Shares whose
shares were purchased pursuant to such tender or exchange offer; and (iii) the
form of consideration being offered to the remaining holders of Common Shares
pursuant to such transaction is the same as the form of consideration paid
pursuant to such tender or exchange offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights except prior to the Distribution
Date as provided in Section 11(p) hereof, or to distribute Right Certificates
that evidence fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders 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 current market value of a whole Right. For the purposes
of this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange, if any, on which the Rights are then listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board. If on any such date no such market maker is
making a market in the Rights the fair value of the Rights on such date as
determined in good faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of Series A Shares
(other than fractions which are integral multiples of one one-hundredth of a
Series A Share) upon exercise of the Rights or to distribute certificates that
evidence fractional Series A Shares (other than fractions which are integral
multiples of one one-hundredth of a Series A Share). Fractions of Series A
Shares in integral multiples of one one-hundredth of a Series A Share may, at
the election of the Company, be evidenced by Depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shal1 have all the rights, privileges, and preferences to which they
are entitled as beneficial owners of the Series A Shares. In lieu of fractional
Series A Shares that are not integral multiples of one one-hundredth of a Series
A Share, the Company shall pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one Series A Share. For
purposes of this Section 14(b), the current market value of a Series A Share
shall be the closing price of a Series A Share (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall not
be required to issue fractions of Common Shares upon exercise of the Rights or
to distribute certificates that evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Common
Share. For purposes of this Section 14(c), the current market value of one
Common Share shall be the closing price of one Common Share (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right, by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as otherwise set forth herein.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Section
18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of. the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action, or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise 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 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) before the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer and with
appropriate forms and certificates fully executed;
(c) subject to Sections 6(a) and 7(f) hereof, 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
Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Shares
certificates made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court
having jurisdiction or by a governmental, regulatory, or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or
otherwise restraining performance of such obligation; provided, however,
the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends,
or be deemed for any purpose the holder of the Series A Shares or any other
securities of the Company that may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights of Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith, or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises. The costs
and expenses of enforcing this right of indemnification shall also be paid by
the Company. The indemnification provided for hereunder shall survive the
expiration of the Rights and termination of this Agreement.
(b) The Rights Agent shall be fully indemnified against, shall be protected
from, and shall incur no liability or expense (including without limitation
attorneys' fees and expenses) for, or in respect of any action taken, suffered
or omitted by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the Series A Shares or
Common Shares or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice of
its counsel as set forth in Section 20 hereof.
(c) Notwithstanding anything in this Agreement to the contrary, in no event
shall the Rights Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits).
Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a)
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper of any further act on the part of any of the parties hereto,
provided, however, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and
the determination of "current per share market price") be proved or
established by the Company before 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 any one of the Chairman of the
Board, the President, the Executive Vice President, any Vice President, the
Treasurer, or the 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 Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person 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 Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under
the provisions of Sections 11, 13 or 24 hereof or responsible for the
manner, method, or amount of any such adjustment or the ascertainment 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 Series A Shares to be issued pursuant to this Agreement
or any Right Certificate or as to whether any Series A Shares will, when
issued, be validly authorized and issued, fully paid, and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge, and
deliver or cause to be performed, executed, acknowledged, and delivered all
such further and other acts, instruments, and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, the Executive Vice
President, any Vice President, the Secretary, or the 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 or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights Agent
under this Agreement and the date on or after which such action shall be
taken or such omission shall be effective. The Rights Agent shall not be
liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than ten
Business Days after the date any officer of the Company actually receives
such application, unless, any such officer shall have consented in writing
to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application subject to
the proposed action or omission and/or specifying the action to be taken or
omitted.
(h) The Rights Agent and any stockholder, director, officer, or
employee of the Rights Agent may buy, sell, or deal in any of the Rights or
other securities of the Company or become interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect, or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect, or misconduct, provided that reasonable
care was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 on such certificate attached to the form of assignment or form of
election to purchase, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
(l) The Rights Agent shall not be required to take notice or be deemed
to have any notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the
designation of any Person as an Acquiring Person, Affiliate or Associate)
under this Agreement unless and until the Rights Agent shall be
specifically notified in writing by the Company of such fact, event or
determination.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares and Series A Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares and Series A Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of Missouri or the State of New York (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of Missouri or the State of New York), in good
standing, having an office in the State of Missouri or the State of New York,
which is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000. 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 Shares and Series A Shares and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by the Board to reflect any adjustment or change in the Purchase
Price per share and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance,
sale, or delivery of Common Shares following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with respect
to Common Share so issued, sold, or delivered pursuant to the exercise of stock
options or under any employee plan or arrangement outstanding, granted or
awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination. (a) The Board may, at its option,
at any time prior to the earlier of (A) the time at which an Acquiring Person
becomes such, or (B) the Final Expiration Date, redeem all but not less than all
the then outstanding Rights at a redemption price of $.001 per Right,
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"). The redemption of the Rights
by the Board may be made effective at such time, on such basis and with such
conditions as the Board, in its sole discretion, may establish
(b) In the case of a redemption permitted under Section 23 hereof,
immediately upon the action of the Board ordering the redemption of the Rights,
evidence of which shall have been filed promptly with the Rights Agent, and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. Within ten days after the action of
the Board ordering the redemption of the Rights under Section 23(a) hereof, 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 for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption shall state the Redemption Date and the method by which the payment
of the Redemption Price will be made. The Company may, at its option, discharge
all of its obligations with respect to providing such notice to Rights holders
by (i) issuing a press release announcing the manner of redemption of the
Rights, (ii) depositing with a bank or trust company in New York, New York, or
St. Louis, Missouri, having a capital and surplus of at least $100,000,000,
funds necessary for such redemption, in trust, to be applied to the redemption
of the Rights so called for redemption and (iii) arranging for the mailing of
the Redemption Price to the registered holders of the Rights.
Section 24. Exchange. (a) The Board may, at its option, at any time after
any Person becomes an Acquiring Person, exchange all (but not less than all) of
the then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend, or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board shall not
be empowered to effect such exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any Person or entity organized, appointed or
established by the Company pursuant to any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board ordering the exchange of all
of the Rights pursuant to Section 24(a) hereof and without any further action
and without any notice, the right to exercise such Rights shall terminate and
the only right thereafter of a holder of such Rights shall be to receive that
number of Common Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder received the notice. Each such notice of
exchange will state the method by which the exchange of the Common Shares for
Rights will be effected.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Series A Shares (or equivalent preferred shares) for
Common Shares exchangeable for Rights, at the initial rate of one one-hundredth
of a Series A Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect stock splits, stock dividends and other
similar transactions after the date hereof.
(d) The Company shall not be required to issue fractions of Common Shares
or to distribute certificates which evidence fractional Series A Shares (except
as hereinafter provided) of fractional Common Shares, but if the exchange is for
Series A Shares, the Company shall be obligated to issue fractional shares so
long as any fraction of a Series A Share so to be issued is at least equal to
one one-hundredth of a Series A Share. In lieu of such fractional shares, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole share.
For the purposes of this Section 24(d), (i) the current market value of a whole
Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately following the day of the public announcement by the Company that an
exchange is to be effected pursuant to this Section 24, and (ii) the current
market value of a Series A Share or fraction of a Series A Share shall be the
current market value on such day of a Series A Share (or fraction of a Series A
Share) as determined in accordance with Section 11(d).
Section 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of its Series A Shares or to make
any other distribution to the holders of its Series A Shares (other than a
regular quarterly cash dividend), or (ii) to offer to the holders of its Series
A Shares rights or warrants to subscribe for or to purchase any additional
Series A Shares or shares of stock of any class or any other securities, rights,
or options, or (iii) to effect any reclassification of its Series A Shares
(other than a reclassification involving only the subdivision of outstanding
Series A Shares), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other transfer),
in one 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
related Person, or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of a
Right Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and, if
applicable, the date of participation therein by the holders of the Common
Shares and/or Series A Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any such action covered by clause (i) or (ii)
above at least 20 days before the record date for determining holders of the
Series A Shares for purposes of such action, and in the case of any such other
action, at least 20 days before the date of participation therein by the holders
of the Common Shares and/or Series A Shares, whichever shall be the earlier.
(b) In case of the occurrence of a Section 11(a)(ii) Event, then, in any
such case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii), and (ii) all references in the preceding paragraph to Series A Shares
shall be deemed thereafter to refer to Common Shares and/or, if appropriate,
other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
CPI Corp.
0000 Xxxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chairman of the Board
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
To: Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
X.X. Xxx X-0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Rights Agent.
Section 27. Supplements and Amendments. Prior to the Distribution Date, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing Common Shares. From and after the Distribution Date,
the Company and the Rights Agent shall, if the Company shall so direct,
supplement or amend this Agreement without approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder,
or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided this Agreement
may not be supplemented or amended to lengthen, pursuant to Clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing, or clarifying the
rights of, and/or the benefits to, the holders 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
27, the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares. Notwithstanding
anything herein to the contrary, this Agreement may not be amended at a time
when the Rights are not redeemable. Notwithstanding anything in this Agreement
to the contrary, no supplement or amendment that changes the rights and duties
of the Rights Agent under this Agreement will be effective against the Rights
Agent without the execution of such supplement or amendment by the Rights Agent.
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Determination and Actions by the Board of Directors. For all
purposes of this Agreement, any calculation of the number of Common Shares
outstanding at any particular time and any determination of the particular
percentage of such outstanding Common Shares of which any Person is the
Beneficial Owner shall be made in accordance with the provisions of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act as in
effect as of the date hereof. The Board shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations, and determinations (including, for purposes of clause (ii)
below, all omissions with respect to the foregoing) which are done or made by
the Board, in good faith, shall (i) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates and all other
parties, and (iii) not subject the Board to any liability to the holders of the
Right Certificates.
Section 30. Benefits of this Agreement. Nothing in this 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 Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
Section 31. Severability. If any term, provision, covenant, or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants, and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, notwithstanding anything in this Agreement to the contrary,
if any such term, provision, covenant, or restriction is held by such court or
authority to be invalid, void, or unenforceable and the Board determines in its
good faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of such
determination by the Board.
Section 32. Governing Law. This 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 made and to be performed
entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience of reference only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
CPI CORP.
Attest:
By /s/ Xxxx Xxxxxx By /s/ Xxxxxxx Xxxxx
------------------------- -----------------------------
Xxxx Xxxxxx Xxxxxxx Xxxxx
Secretary President
[SEAL]
XXXXXX TRUST AND SAVINGS BANK
Attest:
By /s/ Xxxxx Xxxxxx By /s/ Xxxxxx X. Xxxxxxx
------------------------- -----------------------------
Xxxxx Xxxxxx Xxxxxx X. Xxxxxxx
Vice President Vice President
[SEAL]
EXHIBIT A
FORM OF CERTIFICATE OF DESIGNATION, PREFERENCES,
AND RIGHTS FOR SERIES A PARTICIPATING PREFERRED STOCK
of
CPI CORP.
Pursuant to Section 151 of the General and Corporation Law
of the State of Delaware
The undersigned officers of CPI Corp., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Corporation, the Board of Directors on March
13, 2000, adopted the following resolution creating a series of 200,000 shares
of Preferred Stock designated as Series A Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation in accordance with the provisions of its Certificate of
Incorporation, a series of Preferred Stock of the Corporation be and it hereby
is created, no Shares of which have been heretofore issued, and that the
designation and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Participating Preferred Stock", without par value (the
"Series A Preferred Stock"), and the number of shares constituting such series
shall be 200,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any shares
of any series of stock ranking prior and superior to the shares of Series A
Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $.40
per share, of the Company (the "Common Stock") and of any other junior stock,
shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in
cash on the first day of January, April, July, and October in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b)
subject to the provision for adjustment hereinafter set forth, one hundred (100)
times the aggregate per share amount of all cash dividends, and one hundred
(100) times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend or distribution payable
in shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. Dividends on the Series A
Preferred Stock shall be paid out of funds legally available for such purpose.
In the event the Company shall at any time after March 13, 2000 (the "Rights
Declaration Date"), (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each such
case the amounts to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying each such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on the Series A
Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend or distribution payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date; and provided further, that nothing contained in
this paragraph (B) shall be construed so as to conflict with any provision
relating to the declaration of dividends contained in the Certificate.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of dividend or distribution declared thereon
which record date shall be no more than 30 days before the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the stockholders of the
Company. In the event the Company shall at any time following the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Company.
(C) (i) If at any time dividends on any Series A Preferred Stock shall
be in arrears in an amount equal to six (6) quarterly dividends thereon,
the occurrence of such contingency shall xxxx the beginning of a period
(herein called a "DEFAULT PERIOD") which shall extend until such time when
all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of
Series A Preferred Stock then outstanding shall have been declared and paid
or set apart for payment. During each default period, all holders of
Preferred Stock (including holders of the Series A Preferred Stock) with
dividends in arrears in an amount equal to six (6) quarterly dividends
thereon, voting as a class, irrespective of series, shall have the right to
elect two (2) directors.
(ii) During any default period, such voting right of the holders of
Series A Preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(C) or at any annual
meeting of stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders of any
other series of Series A Preferred Stock, if any, to increase, in certain
cases, the authorized number of directors shall be exercised unless the
holders of ten percent (10%) in number of shares of Series A Preferred
Stock outstanding shall be present in person or by proxy. The absence of a
quorum of the holders of Common Stock shall not affect the exercise by the
holders of Series A Preferred Stock of such voting right. At any meeting at
which the holders of Series A Preferred Stock shall exercise such voting
right initially during an existing default period, they shall have the
right, voting as a class, to elect directors to fill such vacancies, if
any, in the Board of Directors as may then exist up to two (2) directors
or, if such right is exercised at an annual meeting, to elect two (2)
directors. If the number which may be so elected at any special meeting
does not amount to the required number, the holders of the Series A
Preferred Stock shall have the right to make such increase in the number of
directors as shall be necessary to permit the election by them of the
required number. After the holders of the Series A Preferred Stock shall
have exercised their right to elect directors in any default period and
during the continuance of such period, the number of directors shall not be
increased or decreased except by vote of the holders of Series A Preferred
Stock as herein provided or pursuant to the rights of any equity securities
ranking senior to or pari passu with the Series A Preferred Stock.
(iii) Unless the holders of Series A Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Series A Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting of
the holders of Series A Preferred Stock, which meeting shall thereupon be
called by the President, a Vice President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which
holders of Series A Preferred Stock are entitled to vote pursuant to this
Paragraph (C)(iii) shall be given to each holder of record of Series A
Preferred Stock by mailing a copy of such notice to him at his last address
as the same appears on the books of the Corporation. Such meeting shall be
called for a time not earlier than 20 days and not later than 60 days after
such order or request or in default of the calling of such meeting within
60 days after such order or request, such meeting may be called on similar
notice by any stockholder or stockholders owning in the aggregate not less
than ten percent (10%) of the total number of shares of Series A Preferred
Stock outstanding. Notwithstanding the provisions of this Paragraph (C)
(iii), no such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual meeting of
the stockholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of directors until the holders of Series
A Preferred Stock shall have exercised their right to elect two (2)
directors voting as a class, after the exercise of which right (x) the
directors so elected by the holders of Series A Preferred Stock shall
continue in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y) any vacancy
in the Board of Directors may (except as provided in Paragraph (C)(ii) of
this Section 3) be filled by vote of a majority of the remaining directors
theretofore elected by the holders of the class of stock which elected the
director whose office shall have become vacant. References in this
Paragraph (C) to directors elected by the holders of a particular class of
stock shall include directors elected by such directors to fill vacancies
as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Series A Preferred Stock as a class to elect directors
shall cease, (y) the term of any directors elected by the holders of Series
A Preferred Stock as a class shall terminate, and (z) the number of
directors shall be such number as may be provided for in the certificate of
incorporation or by-laws irrespective of any increase made pursuant to the
provisions of Paragraph (C)(ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law or in
the certificate of incorporation or by-laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining directors.
(D) Except as set forth herein, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution, or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution, or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution, or winding up) with the Series A Preferred Stock,
provided that the Company may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any
stocks of the Company ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution, or winding up)
with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Redemption. The Series A Preferred Stock shall not be
redeemable.
Section 6. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 7. Liquidation, Dissolution, or Winding Up.
(A) Upon any voluntary or involuntary liquidation, dissolution, or winding
up of the Company, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution,
or winding up) to the Series A Preferred Stock unless, prior thereto, the
holders of shares of Series A Preferred Stock shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full amount of the Series
A Liquidation Preference, no additional distributions shall be made to the
holders of shares of Series A Preferred Stock unless, prior thereto, the holders
of shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii)
being the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common Stock, respectively,
holders of Series A Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to one with respect to such
Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of preference stock, if any, which
rank on a parity with the Series A Preferred Stock, then all such available
assets shall be distributed ratably to the holders of the Series A Preferred
Stock and the holders of such parity stock in proportion to their respective
liquidation preferences. In the event that, after payment in full of the Series
A Liquidation Preference, there are not sufficient assets available to permit
payment in full of the Common Adjustment, then any such remaining assets shall
be distributed ratably to the holders of Common Stock.
(C) In the event the Company shall at any time after the Rights Declaration
Date, (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event, and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 8. Consolidation, Merger, etc. In case the Company shall enter into
any consolidation, merger, combination, or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash, and/or any other property, then in any such case the shares of Series A
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash, and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Company
shall at any time after the Rights Declaration Date: (i) declare or pay any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, then in each such case the amount
set forth in the preceding sentence with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event, and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 9. Ranking. The Series A Preferred Stock shall rank junior to all
other series of Company's Preferred Stock as to the payment of dividends and
distribution of assets, unless the term of any such series shall provide
otherwise.
Section 10. Fractional Shares. The Company may issue fractions and
certificates representing fractions of a share of Series A Preferred Stock in
integral multiples of 1/100th of a share of Series A Preferred Stock (or in lieu
thereof, at the election of the Board of Directors of the Company at the time of
the first issue of any shares of Series A Preferred Stock, evidence such
fractions by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all rights,
privileges and preferences to which they would be entitled as beneficial owners
of shares of Series A Preferred Stock in the event that fractional shares of
Series A Preferred Stock are issued) which shall entitle the holders thereof, in
the proportion which such fraction bears to a full share, to all the rights
provided herein for holders of full shares of Series A Preferred Stock.
Section 11. Amendment. At any time when any shares of Series A Preferred
Stock are outstanding, this Certificate of Designation shall not be amended in
any manner that would materially alter or change the powers, preferences, or
special rights of the Series A Preferred Stock so as to affect them adversely,
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Preferred Stock, voting together as a single
c1ass.
Said resolution was duly adopted at a meeting of the Board of Directors of
the Company duly called and held on March 13, 2000 at which meeting a quorum was
present and acting throughout.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this __ day of
__________, 2000.
CPI CORP.
By
-----------------------------
ATTEST:
------------------------------
Secretary and General Counsel
[SEAL]
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ___________________ Rights
NOT EXERCISABLE AFTER MARCH 13, 2010, UNLESS EXTENDED PRIOR THERETO BY THE BOARD
OF DIRECTORS OR EARLIER IF EXCHANGED OR REDEEMED BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND UNDER CERTAIN CIRCUMSTANCES TO
EXCHANGE, IN EACH CASE AT THE OPTION OF THE COMPANY AND ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.]*
* The bracketed portion of the legend should be inserted only if applicable.
Right Certificate
CPI CORP.
This certifies that ____________, or registered assigns, is the registered
owner of the number of Rights set forth above, each which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of March 13, 2000, (the "Rights Agreement"), between CPI
Corp., a Delaware corporation (the "Company"), and Xxxxxx Trust and Savings
Bank, a national banking association (the "Rights Agent"), to purchase from the
Company at any time prior to 4:00 PM (St. Louis, Missouri time) on March 13,
2010 (unless such date is extended prior thereto by the Board of Directors) (the
"Final Expiration Date"), at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a fully paid, non-assessable share of Series A Participating
Preferred Stock, without par value ("Series A Preferred Stock"), of the Company,
at a purchase price of Ninety-Six Dollars ($96.00) per one one-hundredth of a
share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related Certificate duly
executed. Except as otherwise provided in the Rights Agreement, the Purchase
Price shall be paid in cash. The number of Rights evidenced by this Right
Certificate (and the number of fractional shares of Series A Preferred Stock
that may be purchased upon exercise thereof) set forth above, and the Purchase
Price per fractional share of Series A Preferred Stock set forth above, are the
number and Purchase Price as of March 13, 2000, based on the Series A Preferred
Stock as constituted at such date. The Company reserves the right to require
before the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that a number of Rights be exercised so that only whole shares
of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate, or Affiliate, or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, such Rights shall become null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of any such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price, and the number and
kind of shares of Series A Preferred Stock or other securities that 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,
including Triggering Events (as such term is defined in 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
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties, and immunities hereunder of the
Rights Agent, the Company, and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances specified in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Series A Preferred Stock as the
Rights evidenced by the Right Certificate or Right Certificates surrendered
shall have entitled such holder to purchase. If the rights evidence by this
Rights 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 $.001 per Right at any time prior to the earlier of (i) the time at
which an Acquiring Person becomes such, or (ii) the Final Expiration Date. In
addition, under certain circumstances following the Stock Acquisition Date, the
Rights may be exchanged, in whole or in part, for shares of the Common Stock, or
shares of preferred stock of the Company having essentially the same value or
economic rights as such shares. Immediately upon the action of the Board of
Directors of the Company authorizing exchange or redemption of the Rights, the
Rights will no longer be exercisable, and thereafter the only right of the
holders of the Rights evidenced hereby will be to receive the securities
issuable on exchange or the Redemption Price.
The Rights Agreement may be supplemented or amended without the approval of
any holder of the Rights (or the Common Shares) as set forth in the Rights
Agreement.
No fractional shares of Series A Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions that are
integral multiples of one one-hundredth of a share of Series A Preferred Stock,
which may, at the election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made as provided in the Rights
Agreement. The Company, at its election, may require that a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Series A Preferred
Stock or of any other securities of the Company (including Common Shares) that
may at any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement and its corporate seal.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of _______________, 200__.
Countersigned
XXXXXX TRUST AND SAVINGS BANK CPI CORP.
By By
-------------------------- --------------------------
Authorized Signature Title:
Attest:
By
--------------------------
[SEAL] Title:
[SEAL]
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________________ hereby sells, assigns, and
transfers unto _______________________________________________ (Please print
name and address of transferee) this Right Certificate, together with all right,
title, and interest therein, and does hereby irrevocably constitute and appoint
_________________ Attorney, to transfer the within Right Certificate on the
books of the within-named Company, with full power of substitution.
Dated: _________________, 200_
---------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _____________, 200_ _______________________________
Signature
Signature Guaranteed:
NOTICE
The signature(s) to the foregoing Assignment and Certificate must
correspond to the name(s) as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: CPI CORP.
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Right Certificate to purchase the shares of Series A Shares
issuable upon the exercise of the Rights (or Common Shares or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of:
Please insert social security
or other identifying number: ________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance 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: _______________, 200_
______________________________
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 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);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _______________, 200_
______________________________
Signature
Signature Guaranteed:
NOTICE
The signature(s) to the foregoing Election to Purchase and Certificate must
correspond to the name(s) as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
SERIES A SHARES
On March 13, 2000 the Board of Directors of CPI Corp. (the "Company")
declared a dividend distribution of one Right for each outstanding share of
common stock, par value $.40 per share (a "Common Share"), of the Company to
shareholders of record at the close of business on March 23, 2000 (the "Record
Date"). Except as set forth below, each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share (a "Unit") of Series A
Participating Preferred Stock, without par value ("Series A Shares"), at a price
of Ninety-Six Dollars ($96.00) (the "Purchase Price"), subject to adjustment.
The Purchase Price shall be paid in cash. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and Xxxxxx Trust and Savings Bank, as Rights Agent.
Initially, no separate Right Certificates will be distributed. Until the
earlier to occur of (i) 10 days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of 20% or more of the
outstanding Common Shares (the "Shares Acquisition Date") or (ii) 10 Business
Days (or such later date as the Board of Directors may determine) following the
commencement of a tender offer or exchange offer if, upon consummation thereof,
such person or group would become an Acquiring Person (the earlier of such dates
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any Common Shares outstanding on and after the Record Date, by the
certificates representing such Common Shares. The Rights Agreement provides
that, until the Distribution Date, the Rights will be transferred with and only
with Common Share certificates. As soon as practicable following the
Distribution Date, separate certificates evidencing the rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and, thereafter, such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will expire
on March 13, 2010, unless such date is extended or the Rights are earlier
redeemed or exchanged by the Company as described below.
In the event that a person (other than the Company and certain other
entities) becomes an Acquiring Person (other than pursuant to a tender offer for
all outstanding Common Shares at a price and on terms approved by a majority of
the independent Directors (a "Qualified Offer")) each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the Purchase
Price, Common Shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Purchase Price.
Notwithstanding any of the foregoing, following the occurrence of the event set
forth above, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person will be
null and void.
For example, at a Purchase Price of $96 per Right, each Right not otherwise
voided following an event set forth in the preceding paragraph would entitle the
holder to purchase $192 worth of Common Shares (or other consideration, as noted
above) for $96. Assuming that the Common Shares had a per share value of $24 at
such time, the holder of each valid right would be entitled to purchase eight
Common Shares for $96.
In the event that, at any time following the Shares Acquisition Date, (i)
the Company engages in a merger or other business combination transaction in
which the Company is not the surviving corporation, or in which the Company is
the surviving corporation but in which its Common Shares are changed or
exchanged (other than pursuant to a Qualified Offer), or (ii) more than 50% of
the Company's assets or earning power is sold or transferred, the Rights
Agreement provides that proper provision shall be made so that each holder of a
Right (other than Rights that previously have been voided as set forth above)
shall thereafter have the right to receive, upon the exercise thereof at the
Purchase Price, common shares of the acquiring company having a value equal to
two times the Purchase Price.
The Purchase Price payable, and the number of Units of Series A Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
dividend of Series A Shares on, or a subdivision, combination or
reclassification of, the Series A Shares, (ii) upon the grant to holders of the
Series A Shares of certain rights or warrants to subscribe for Series A Shares
or securities convertible into Series A Shares, or (iii) upon the distribution
to holders of the Series A Shares of debt securities or assets (excluding
regular quarterly cash dividends and dividends payable in Series A Shares) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares that are not integral multiples of one
one-hundredth of a Series A Share will be issued and, in lieu thereof, an
adjustment in cash will be made based on the closing price of the Series A
Shares on the last trading date prior to the date of exercise.
At any time after the date of the Rights Agreement until the date upon
which an Acquiring Person becomes such, the Board of Directors may redeem the
Rights in whole, but not in part, at a price of $.001 per Right, subject to
adjustments (the "Redemption Price").
At any time after a person becomes an Acquiring Person, provided that the
Acquiring Person beneficially owns not more than 50% of the outstanding Common
Shares, the Board of Directors may, at its option, exchange all of the then
outstanding and exercisable Rights for Common Shares at an exchange ratio of one
Common Share per Right or for Series A Shares (or equivalent preference shares)
at an exchange ratio of one one-hundredth of a Series A Share (or equivalent
preference share) per Right.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Shares (or other consideration) of the
Company or for common stock of the acquiring company or in the event of the
redemption of the Rights.
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors before the Distribution Date. Thereafter, the Rights Agreement may
be amended to cure any ambiguity, to correct defects and inconsistencies, to
make changes that do not adversely affect the interests of holders of the Rights
(other than an Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided, that no amendment to adjust the time
period governing redemption shall be made at such time as the Rights are no
longer redeemable and no other time period may be lengthened unless it is for
the purpose of protecting, enhancing, or clarifying the rights of, or benefits
to, the holders of Rights. The foregoing notwithstanding, no amendment may be
made at such time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company or the
Rights Agent. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
TABLE OF CONTENTS
Page
Section 1.Certain Definitions.................................................1
Section 2.Appointment of Rights Agent.........................................5
Section 3.Issue of Right Certificates.........................................5
Section 4.Form of Right Certificates..........................................7
Section 5.Countersignature and Registration...................................7
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 Series A Shares; Registration......11
Section 10.Series A Shares Record Date.......................................12
Section 11.Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights...........................................................12
Section 12.Certificate of Adjusted Purchase Price or Number of Shares........20
Section 13.Consolidation, Merger, or Sale or Transfer of Assets or
Earning Power..............................................................20
Section 14.Fractional Rights and Fractional Shares...........................23
Section 15.Rights of Action..................................................24
Section 16.Agreement of Right Holders........................................24
Section 17.Right Certificate Holder Not Deemed a Shareholder.................25
Section 18.Concerning the Rights of Agent....................................25
Section 19.Merger or Consolidation or Change of Name of Rights Agent.........25
Section 20.Duties of Rights Agent............................................26
Section 21.Change of Rights Agent............................................28
Section 22.Issuance of New Rights Certificates...............................28
Section 23.Redemption and Termination........................................29
Section 00.Xxxxxxxx..........................................................29
Section 25.Notice of Certain Events..........................................30
Section 26.Notices...........................................................31
Section 27.Supplements and Amendments........................................32
Section 28.Successors........................................................32
Section 29.Determination and Actions by the Board of Directors...............32
Section 30.Benefits of this Agreement........................................33
Section 31.Severability......................................................33
Section 32.Governing Law.....................................................33
Section 33.Counterparts......................................................33
Section 34.Descriptive Headings..............................................33
Exhibits
A. Certificate of Designations
B. Form of Right Certificate
C. Summary of Rights to Purchase Series A Shares
