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LCA GROUP INC.
and
MELLON INVESTOR SERVICES LLC,
as Rights Agent
RIGHTS AGREEMENT
Dated as of _______, 2001
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions. ...............................................................1
Section 2. Appointment of Rights Agent.........................................................6
Section 3. Issuance of Rights Certificates.....................................................6
Section 4. Form of Rights Certificates.........................................................8
Section 5. Countersignature and Registration...................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates.......................................9
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights.......................9
Section 8. Cancellation and Destruction of Rights Certificates................................11
Section 9. Reservation and Availability of Shares of Preferred Stock..........................12
Section 10. Preferred Stock Record Date........................................................13
Section 11. Adjustment of Exercise Price or Number of Shares...................................13
Section 12. Certification of Adjusted Exercise Price or Number of Shares.......................17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...............17
Section 14. Fractional Rights and Fractional Shares............................................20
Section 15. Rights of Action...................................................................20
Section 16. Agreement of Rights Holders........................................................21
Section 17. Rights Certificate Holder Not Deemed a Stockholder.................................21
Section 18. Concerning the Rights Agent........................................................22
Section 19. Merger or Consolidation of, or Change in Name of, the Rights Agent.................22
Section 20. Duties of the Rights Agent.........................................................23
Section 21. Change of Rights Agent.............................................................24
Section 22. Issuance of New Rights Certificates................................................25
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Section 23. Redemption or Exchange.............................................................25
Section 24. Notice of Proposed Actions.........................................................26
Section 25. Notices............................................................................27
Section 26. Supplements and Amendments.........................................................28
Section 27. Determination and Actions by the Board of Directors of the Company, etc............28
Section 28. Successors.........................................................................29
Section 29. Benefits of this Rights Agreement..................................................29
Section 30. Delaware Contract..................................................................29
Section 31. Counterparts.......................................................................29
Section 32. Descriptive Headings...............................................................29
Section 33. Severability.......................................................................29
Exhibit A -- Summary of Rights
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Certificate of Designations of Series A Preferred Stock
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RIGHTS AGREEMENT
Agreement, dated as of ______, 2001, by and between LCA Group Inc., a
Delaware corporation (the "Company"), and Mellon Investor Services L.L.C., a
New Jersey limited liability company, as Rights Agent (the "Rights Agent").
W I T N E S S E T H:
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WHEREAS, on ______, 2000, the Board of Directors of the Company
authorized the issuance of, and declared a dividend payable in, one right (a
"Right") for each share of Common Stock, $0.01 par value per share, of the
Company outstanding as of the close of business on _______, 2001 (the "Record
Date"), each such Right representing the right to purchase one one-hundredth of
a share of Series A Preferred Stock of the Company ("Preferred Stock") having
the rights and preferences set forth in the form of Certificate of Designations
attached hereto as Exhibit C authorized by the Board of Directors of the Company
on ______, 2001, upon the terms and subject to the conditions hereinafter set
forth; and
WHEREAS, the Board of Directors of the Company further authorized the
issuance of one Right (subject to adjustment) with respect to each share of
Common Stock which may be issued between the Record Date and the Expiration Date
(as such term is hereinafter defined); and
WHEREAS, the Company and U.S. Industries, Inc., a Delaware Corporation
("USI"), have entered into a Distribution and Indemnification Agreement, dated
_____, 2000 (the "Distribution Agreement"), pursuant to which USI will
distribute all of the outstanding shares of the Company to USI's stockholder of
record on the Effective Date (as defined in the Distribution Agreement) (the
"Spin-off").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, is the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the Voting Stock (as such term is hereinafter defined) of the
Company then outstanding; provided that, an Acquiring Person shall not include
(i) an Exempt Person (as such term is hereinafter defined) or (ii) any Person,
together with all Affiliates and Associates of such Person, who or which would
be an Acquiring Person solely by reason of (A) being the Beneficial Owner of
shares of Voting Stock of the Company, the Beneficial Ownership of which was
acquired by such Person (or his or its predecessor through merger,
consolidation, amalgamation or other similar succession) pursuant to any action
or
transaction or series of related actions or transactions approved by the Board
of Directors before such Person otherwise became an Acquiring Person or (B) a
reduction in the number of issued and outstanding shares of Voting Stock of the
Company pursuant to a transaction or a series of related transactions approved
by the Board of Directors of the Company; provided further, that in the event
such Person described in this clause (ii) does not become an Acquiring Person by
reason of subclause (A) or (B) of this clause (ii), such Person nonetheless
shall become an Acquiring Person in the event such Person thereafter acquires
Beneficial Ownership of an additional l% or more of the then outstanding Voting
Stock of the Company, unless the acquisition of such additional Voting Stock
would not result in such Person becoming an Acquiring Person by reason of
subclause (A) or (B) of this clause (ii). Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith 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 (as determined in good faith by the Board of
Directors) a sufficient number of shares of Common Stock 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 an
"Acquiring Person" for any purposes of this Rights Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended ("Exchange Act"), as in effect on the date of this Rights
Agreement.
(c) "Associate" of a Person (as such term is hereinafter defined) shall
mean (i) with respect to a corporation, any officer or director thereof or of
any Subsidiary (as such term is hereinafter defined) thereof, or any Beneficial
Owner (as such term is hereinafter defined) of 10% or more of any class of
equity security thereof, (ii) with respect to an association, joint venture or
other unincorporated organization, any officer or director thereof or of a
Subsidiary thereof or any Beneficial Owner of 10% or more ownership interest
therein, (iii) with respect to a partnership, any general partner thereof or any
limited partner thereof who is, directly or indirectly, the Beneficial Owner of
a 10% or greater ownership interest therein, (iv) with respect to a limited
liability company, any officer, director or manager thereof or of a Subsidiary
thereof or any member thereof who is, directly or indirectly, the Beneficial
Owner of a 10% or greater ownership interest therein, (v) with respect to a
business trust, any officer or trustee thereof or of any Subsidiary thereof,
(vi) with respect to any other trust or an estate, any trustee, executor or
similar fiduciary or any Person who has a 10% or greater interest as a
beneficiary in the income from or principal of such trust or estate, (vii) with
respect to a natural person, any relative or spouse of such person, or any
relative of such spouse, who has the same home as such person, and (viii) any
Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own," any securities (and correlative terms shall have correlative
meanings):
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, for purposes of Section 13(d) of
the Exchange Act and Regulations 13D and 13G thereunder, in each case as in
effect on the date hereof; or
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(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or the fulfillment of a
condition or both) pursuant to any agreement, arrangement or understanding
(whether or not in writing), or upon the exercise of conversion rights,
exchange rights, other rights (other than these Rights), warrants or
options, or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "Beneficially Own," securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange or (B) the right to vote,
alone or in concert with others, pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "Beneficially Own,"
any securities if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given in
response to a proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under the Exchange
Act and (2) is not at that time reportable by such Person on a Schedule 13D
report under the Exchange Act (or any comparable or successor report),
other than by reference to a proxy or consent solicitation being conducted
by such Person; or
(iii) which are Beneficially Owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not
in writing) for the purpose of acquiring, holding, voting (except as
described in the proviso in clause (B) of subparagraph (ii) of this
paragraph (d)) or disposing of any securities of the Corporation; provided,
however, that for purposes of determining Beneficial Ownership of
securities under this Rights Agreement, officers and directors of the
Corporation solely by reason of their status as such shall not constitute a
group (notwithstanding that they may be Associates of one another or may be
deemed to constitute a group for purposes of Section 13(d) of the Exchange
Act) and shall not be deemed to own shares owned by another officer or
director of the Corporation.
Notwithstanding anything in this paragraph (d) to the contrary, a
Person engaged in the business of underwriting securities shall not be deemed
the "Beneficial Owner" of, or to "Beneficially Own," any securities acquired in
good faith in a firm commitment underwriting, until the expiration of forty days
after the date of such acquisition.
(e) "Book-Entry" shall mean an uncertificated book-entry for the
Corporation's Common Stock.
(f) "Business Day" shall mean any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
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(h) "Common Stock" when used with reference to the Company shall
collectively mean the Common Stock, $0.01 par value, of the Company. "Common
Stock" when used with reference to any Person other than the Company which shall
be organized in corporate form shall mean the capital stock or other equity
security with the greatest per share voting power of such Person or, if such
other Person is a subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person. "Common Stock" when used with
reference to any Person other than the Company which shall not be organized in
corporate form shall mean units of beneficial interest which shall represent the
right to participate in profits, losses, deductions and credits of such Person
and which shall be entitled to exercise the greatest voting power per unit of
such Person.
(i) "Distribution Date" shall have the meaning set forth in Section
3(b) hereof.
(j) "Exchange Act" shall have the meaning set forth in Section 1(b)
hereof.
(k) "Exchange Ratio" shall have the meaning set forth in Section 23(d)
hereof.
(l) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of
the Company, (iii) prior to the Spin-off, USI, (iv) any Person whose ownership
of 15% or more of the voting stock results solely from its ownership of 15% or
more of USI's common stock outstanding on the record date for the Spin-off,
provided such person is not an Acquiring Person within the meaning of the USI
Rights Plan (as such term is hereinafter defined), (v) any employee benefit plan
or employee stock plan of the Company or any Subsidiary of the Company, or any
trust or other entity organized, appointed, established or holding Common Stock
for or pursuant to the terms of any such plan; provided, however, that any
Exempt Person by means of clause (iv) of this Section 1(k) shall cease to be an
Exempt Person and shall become an Acquiring Person in the event such person (A)
acquires Beneficial Ownership of an additional 1% or more of the Voting Stock of
the Company, unless the acquisition of such additional Voting Stock would not
result in such person becoming an Acquiring Person by reason of subclause (A) or
(B) of clause (ii) of Section 1(a) hereof or (B) commences, or announces an
intention to commence, a tender or exchange offer upon the successful
consummation of which such person would be the Beneficial Owner of 15% or more
of the then outstanding Voting Stock of the Company (irrespective of whether any
shares are actually purchased pursuant to any such offer).
(m) "Exercise Price" shall have the meaning set forth in Sections 4 and
7(b) hereof.
(n) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(o) "Fair Market Value" of any property shall mean the fair market
value of such property as determined in accordance with Section 11(b) hereof.
(p) "NASDAQ" shall have the meaning set forth in Section 9(b) hereof.
(q) "Person" shall mean any individual, firm, corporation or other
entity.
(r) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
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(s) "Qualifying Tender Offer" shall mean a tender or exchange offer for
all outstanding shares of Common Stock of the Company approved by a majority of
the Board of Directors, after taking into account the potential long-term value
of the Company and all other factors that they consider relevant.
(t) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(u) "Rights Certificate" shall have the meaning set forth in Section
3(d) hereof.
(v) "Stock Acquisition Date" shall mean the first date on which there
shall be a public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) or such earlier date as a majority of the Board of Directors shall
become aware of the existence of an Acquiring Person.
(w) "Subsidiary" of a Person shall mean any corporation or other entity
of which securities or other ownership interests having voting power sufficient
to elect a majority of the board of directors or other persons performing
similar functions are beneficially owned, directly or indirectly, by such Person
or by any corporation or other entity that is otherwise controlled by such
Person.
(x) "Summary of Rights" shall have the meaning set forth in Section
3(a) hereof.
(y) "Trading Day" shall have the meaning set forth in Section 11(b)
hereof.
(z) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or regulatory
authority in respect of any transfer of any security, instrument or right,
including Rights, shares of Common Stock and shares of Preferred Stock.
(aa) "USI Rights Plan" shall mean the Rights Agreement, dated October
15, 1998, by and between U.S.I. and the Chase Manhattan Bank.
(bb) "Voting Stock" shall mean (i) the Common Stock of the Company and
(ii) any other shares of capital stock of the Company entitled to vote generally
in the election of directors or entitled to vote together with the Common Stock
in respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up. For purposes of this
Agreement, Voting Stock shall include securities of the type referred to in
clauses (i) and (ii) above that trade on a "when issued" basis on a national
securities exchange or on the NASDAQ. For purposes of this Agreement, a stated
percentage of the Voting Stock shall mean a number of shares of the Voting Stock
as shall equal in voting power that stated percentage of the total voting power
of the then outstanding shares of Voting Stock in the election of a majority of
the Board of Directors or in respect of any merger, consolidation, sale of all
or substantially all of the Company's assets, liquidation, dissolution or
winding up.
Any determination required to be made by the Board of Directors of the
Company for purposes of applying the definitions contained in this Section 1
shall be made by the Board of
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Directors in its good faith judgment, which determination shall be binding on
the Rights Agent and the holders of the Rights.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issuance of Rights Certificates. (a) On the Record Date (or
as soon as practicable thereafter), the Company or the Rights Agent shall send a
copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit A (the "Summary of Rights"), by first class mail, postage prepaid, to
each record holder of the Common Stock as of the close of business on the Record
Date, at the address of such holder shown on the records of the Company.
(b) Until the Close of Business on the day which is the earlier of (i)
the tenth day after the Stock Acquisition Date or such earlier or later date
(not beyond the thirtieth day after the Stock Acquisition Date) as the Board of
Directors may from time to time fix by resolution adopted prior to the
Distribution Date that otherwise would have occurred or (ii) the tenth business
day (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than an Exempt Person) of, or the first
public announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer upon the successful consummation of which
such Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 15% or more of the then outstanding shares of Voting Stock
of the Company (irrespective of whether any shares are actually purchased
pursuant to any such offer) (the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights shall be evidenced by the
Book-Entries, or certificates for, Common Stock registered in the name of the
holders of Common Stock (together with, in the case of Book-Entries
representing, or the certificates for, Common Stock outstanding as of the Record
Date, the Summary of Rights) and not by separate Book-Entries or Rights
Certificates and the record holders of the Common Stock represented by such
Book-Entries or certificates shall be the record holders of the Rights
represented thereby and (y) each Right shall be transferable only simultaneously
and together with the transfer of a share of Common Stock (subject to adjustment
as hereinafter provided). Until the Distribution Date (or, if earlier, the
Expiration Date), transfer on the Company's Direct Registration System of any
Common Stock represented by a Book-Entry or the surrender for transfer of any
certificate for Common Stock shall constitute the surrender for transfer of the
Right or Rights associated with the Common Stock evidenced thereby, whether or
not accompanied by a copy of the Summary of Rights.
(c) Rights shall be issued in respect of all shares of Common Stock
that become outstanding after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date and, in certain circumstances provided
in Section 3(e) hereof and Section 22 hereof, may be issued in respect of shares
of Common Stock that become outstanding after the Distribution Date.
Certificates for Common Stock (including, without limitation, certificates
issued upon original issuance, disposition from the Company's treasury or
transfer or exchange of Common Stock) after the Record Date but prior to the
earlier of the Distribution Date and the
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Expiration Date (or, in certain circumstances as provided in Section 3(e) hereof
and Section 22 hereof, after the Distribution Date) shall have impressed,
printed, written or stamped thereon or otherwise affixed thereto the following
legend:
This certificate also evidences and entitles the holder hereof to the
same number of Rights (subject to adjustment) as the number of shares
of Common Stock represented by this certificate, such Rights being on
the terms provided under the Rights Agreement between LCA Corporation
and Mellon Investor Services (the "Rights Agent"), dated as of
_____, 2000, as it may be amended from time to time (the "Rights
Agreement"), the terms of which are incorporated herein by reference
and a copy of which is on file at the principal executive offices of
LCA Group Inc. Under certain circumstances, as set forth in the Rights
Agreement, such Rights shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. LCA Group Inc. shall
mail to the registered holder of this certificate a copy of the Rights
Agreement without charge within five days after receipt of a written
request therefor. Under certain circumstances as provided in Section
7(e) of the Rights Agreement, Rights issued to or Beneficially Owned
by Acquiring Persons or their Affiliates or Associates (as such terms
are defined in the Rights Agreement) or any subsequent holder of such
Rights shall be null and void and may not be transferred to any
Person.
(d) As soon as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if requested, send),
by first class mail, postage prepaid, to each record holder of the Common Stock
as of the close of business on the Distribution Date, as shown by the records of
the Company, at the address of such holder shown on such records, a certificate
substantially in the form provided by Section 4 hereof (a "Rights Certificate"),
evidencing one Right (subject to adjustment as provided herein) for each share
of Common Stock so held. As of and after the Distribution Date, the Rights shall
be evidenced solely by Rights Certificates and may be transferred by the
transfer of the Rights Certificate as permitted hereby, separately and apart
from any transfer of one or more shares of Common Stock.
(e) In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the Expiration Date,
the Company (i) shall, with respect to shares of Common Stock so issued or sold
(x) pursuant to the exercise of stock options or under any employee plan or
arrangement or (y) upon the exercise, conversion or exchange of other securities
issued by the Company prior to the Distribution Date and (ii) may, in any other
case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Rights Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided that no such Rights
Certificate shall be issued if, and to the extent that, (i) 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
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Certificate would be issued or (ii) appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
shares, certificate and assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Common Stock or the Rights
may from time to time be listed or as the Company may deem appropriate to
conform to usage or otherwise and as are not inconsistent with the provisions of
this Rights Agreement. Subject to the provisions of Section 22 hereof, Rights
Certificates evidencing Rights whenever issued, (i) shall be dated as of the
date of issuance of the Rights they represent and (ii) subject to adjustment
from time to time as provided herein, on their face shall entitle the holders
thereof to purchase such number of shares (including fractional shares which are
integral multiples of one one-hundredth of a share) of Preferred Stock as shall
be set forth therein at the price payable upon exercise of a Right provided by
Section 7(b) hereof as the same may from time to time be adjusted as provided
herein (the "Exercise Price").
(b) Notwithstanding any other provision of this Rights Agreement, any
Rights Certificate that represents Rights Beneficially Owned by an Acquiring
Person or any Affiliate or Associate thereof or any other Person whose Rights
shall become void pursuant to Section 7(e) shall have impressed on, printed on,
written on or otherwise affixed to it (if the Company or the Rights Agent has
knowledge that such Person is an Acquiring Person or an Associate or Affiliate
or a nominee of any of the foregoing) the following legend:
(i) The Beneficial Owner of the Rights represented by this Rights
Certificate is an Acquiring Person or an Affiliate or an Associate of an
Acquiring Person. Accordingly, this Rights Certificate and the Rights
represented hereby shall become void in the circumstances specified in
Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration. (a) Each Rights
Certificate shall be executed on behalf of the Company by its Chairman of the
Board, President or any Vice President, either manually or by facsimile
signature, and have affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. Each Rights Certificate
shall be countersigned by the Rights Agent either manually or by facsimile
signature and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any Rights Certificate
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery of the certificate by the Company, such
Rights Certificate, nevertheless, may be countersigned by the Rights Agent and
issued and delivered with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such officer of the
Company. Any Rights Certificate may be signed on behalf of the Company by any
person who, on the date of the execution of such Rights
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Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or one or more offices designated as
the appropriate place for surrender of Rights Certificates upon exercise or
transfer, and in such other locations as may be required by law, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to the provisions of Sections 7(e), 7(f) 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 Expiration Date, any Rights Certificate, may be (i)
transferred or (ii) split up, combined or exchanged for one or more other Rights
Certificates, entitling the registered holder to purchase a like number of
shares of Preferred Stock as the Rights Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer any Rights Certificate shall surrender the Rights
Certificate at the office of the Rights Agent designated for the surrender of
Rights Certificates with the form of certificate and assignment on the reverse
side thereof duly endorsed (or enclosed with such Rights Certificate a written
instrument of transfer in form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Rights Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Rights Certificate to be split up, combined or exchanged at the office of
the Rights Agent designated therefor. Thereupon, the Rights Agent shall
countersign and deliver to the person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any Transfer Tax that may be
imposed in connection with any transfer, split up, combination or exchange of
any Rights Certificates.
(b) Subject to the provisions of Section 7(e), 7(f) and 14 hereof, upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them and, if requested by the Company, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, or
upon surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company shall issue and deliver a new Rights Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date of
Rights. (a)The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Sections 7(e) and 23(a) hereof). Except as otherwise provided herein, the Rights
may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon
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surrender of the Rights Certificate, with the form of election to purchase and
certificate on the reverse side thereof duly executed (with signatures duly
guaranteed), to the Rights Agent at the principal office of the Rights Agent in
New York, New York, together with payment of the Exercise Price for each Right
exercised, subject to adjustment as hereinafter provided, at or prior to the
Close of Business on the earlier of: (i) _______, 2011 (or if the Distribution
Date shall have occurred before _______, 2011, at the close of business on the
90th day following the Distribution Date) and (ii) the date on which the rights
are redeemed or exchanged as provided in Section 23 hereof (the "Expiration
Date").
(b) The Exercise Price shall initially be [$____] for each one
one-hundredth (1/100) of a share of Preferred Stock issued pursuant to the
exercise of a Right. The Exercise Price and the number of shares of Preferred
Stock or other securities to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof. The Exercise Price shall be payable in lawful money of the United States
of America, in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a Rights
Certificate representing exercisable Rights with the form of election to
purchase duly executed, accompanied by payment by certified check, cashier's
check, bank draft or money order payable to the Company or the Rights Agent of
the Exercise Price for the shares to be purchased and an amount equal to any
applicable Transfer Tax required to be paid by the holder of the Rights
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Preferred
Stock of the Company one or more certificates representing the number of shares
of Preferred Stock to be so purchased, and the Company hereby authorizes and
directs such transfer agent to comply with all such requests, (ii) as provided
in Section 14(b), at the election of the Company, cause depositary receipts to
be issued in lieu of fractional shares of Preferred Stock, (iii) if the election
provided for in the immediately preceding clause (ii) has not been made,
requisition from the Company the amount of cash to be paid in lieu of the
issuance of fractional shares in accordance with Section 14(b) hereof, (iv)
after receipt of such Preferred Stock certificates and, if applicable,
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder and (v) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered holder of such
Rights Certificate; provided, however, that in the case of a purchase of
securities, other than Preferred Stock, pursuant to Section 13 hereof, the
Rights Agent shall promptly take the appropriate actions corresponding in such
case to that referred to in the foregoing clauses (i) through (v) of this
Section 7(c). Notwithstanding the foregoing provisions of this Section 7(c), the
Company may suspend the issuance of shares of Preferred Stock upon exercise of a
Right for a reasonable period, not in excess of 90 days, during which the
Company seeks to register under the Securities Act of 1933, as amended (the
"Act"), and any applicable securities law of any other jurisdiction, the shares
of Preferred Stock to be issued pursuant to the Rights; provided, however, that
nothing contained in this Section 7(c) shall relieve the Company of its
obligations under Section 9(c) hereof.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the
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Rights remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Rights Certificate or his assign, subject to the
provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Rights Agreement to the
contrary, from and after the time (the "invalidation time") when any Person
first becomes an Acquiring Person, other than pursuant to a Qualifying Tender
Offer, any Rights that are beneficially owned by (x) such Acquiring Person (or
any Associate or Affiliate of such Acquiring Person), (y) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
after the invalidation time or (z) a transferee of such Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the invalidation time pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of this Section 7(e), and subsequent transferees of such Persons
referred to in either clause (y) or (z) above, shall be void without any further
action and any holder of such Rights shall thereafter have no rights whatsoever
with respect to such Rights under any provision of this Rights Agreement. The
Company shall use all reasonable efforts to ensure that the provisions of this
Section 7(e) are complied with, but shall have no liability to any holder of
Rights Certificates or any other Person as a result of its failure to make any
determination with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder. No Rights Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person whose Rights would be void pursuant to the provisions of this Section
7(e) or any Associate or Affiliate thereof; no Rights Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the provisions of this Section 7(e) or any
Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Rights Certificate delivered to the Rights Agent
for transfer to an Acquiring Person whose Rights would be void pursuant to the
provisions of this Section 7(e) shall be cancelled. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Rights Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates and Associates or any
transferee of any of them 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 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 following the form of election to purchase
set forth on the reverse side of the Rights Certificate surrendered for such
exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it,
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and no Rights 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 cancel and retire, any Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock or out of
authorized and issued shares of Preferred Stock held in its treasury, such
number of shares of Preferred Stock as will from time to time be sufficient to
permit the exercise in full of all outstanding Rights.
(b) The Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares of Preferred Stock issued
or reserved for issuance in accordance with this Rights Agreement to be listed,
upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation in the National Association of Securities Dealers
Automated Quotation System or any successor thereto or other comparable
quotation system ("NASDAQ").
(c) The Company covenants and agrees that it will take all such action
as may be necessary to insure that all shares of Preferred Stock delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price in respect thereof), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as soon as
practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
shares of Preferred Stock 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 Preferred Stock, or (B) the Expiration
Date. The Company may temporarily suspend, for a period of time not to exceed
ninety days, the issuance of shares of Preferred Stock upon exercise of a Right
in order to prepare and file a registration statement under the Act and permit
it to become effective. 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.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Act (if required) shall have been declared effective.
(e) The Company covenants and agrees that it will pay when due and
payable any and all federal and state Transfer Taxes which may be payable in
respect of the issuance or
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delivery of the Rights Certificates or of any shares of Preferred Stock issued
or delivered upon the exercise of Rights. The Company shall not, however, be
required to pay any Transfer Tax which may be payable in respect of any transfer
or delivery of a Rights Certificate to a Person other than, or the issuance or
delivery of certificates for Preferred Stock upon exercise of Rights in a name
other than that of, the registered holder of the Rights Certificate, and the
Company shall not be required to issue or deliver a Rights Certificate or
certificate for Preferred Stock to a Person other than such registered holder
until any such Transfer Tax shall have been paid (any such Transfer Tax being
payable by the holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such
Transfer Tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Stock represented thereby on, and such certificate shall be dated as
of, the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Exercise 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 Preferred Stock transfer books of the Company
are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated as of, the next succeeding
Business Day on which the Preferred Stock transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate, as such, shall not be entitled 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, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Exercise Price or Number of Shares. The
Exercise Price and the number of shares of Preferred Stock which may be
purchased upon exercise of a 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 Rights Agreement (A) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (B) subdivide or split the outstanding shares of Common
Stock into a greater number of shares or (C) combine or consolidate the
outstanding shares of Common Stock into a smaller number of shares or effect a
reverse split of the outstanding shares of Common Stock or (D) issue any shares
of its capital stock in a reclassification of the Common Stock (including any
such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then and in each such event
the number of shares of Preferred Stock issuable upon the exercise of a Right
after the record date for such event (if one shall have been established or, if
not, after the date of such event) shall be the number of shares of Preferred
Stock issuable immediately prior to such event multiplied by a fraction the
numerator of which is the number of Rights outstanding immediately prior to such
event and the denominator of which is the number of Rights outstanding
immediately after such event and the Exercise Price after such event shall be
the Exercise Price in effect immediately prior to such event multiplied by such
fraction. If an event occurs which would require an adjustment under
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both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 27 of this Rights Agreement, in the event that
any Person (other than an Exempt Person), alone or together with its
Affiliates and Associates, shall become an Acquiring Person, then, subject
to the last sentence of Section 23(a) and except as otherwise provided in
this Section 11, each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive upon exercise of such
Right in accordance with the terms of this Rights Agreement and payment of
the Exercise Price, the greater of (1) the number of one one-hundredths of
a share of Preferred Stock for which such Right was exercisable immediately
prior to the first occurrence of the event described in this Section
11(a)(ii) or (2) such number of one one-hundredths of a share of Preferred
Stock as shall equal the result obtained by dividing the Exercise Price by
50% of the Fair Market Value of one one-hundredth of a share of Preferred
Stock (determined pursuant to Section 11(b) hereof) on the date of such
first occurrence; provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) In the event that the Company does not have available sufficient
authorized but unissued Preferred Stock to permit the adjustments required
pursuant to the foregoing subparagraph (i) or the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii), the Company
shall take all such actions as may be necessary to authorize and reserve
for issuance such number of additional shares of Preferred Stock as may
from time to time be required to be issued upon the exercise in full of all
Rights from time to time outstanding and, if necessary, shall use its best
efforts to obtain stockholder approval thereof. In lieu of issuing shares
of Preferred Stock in accordance with the foregoing subparagraphs (i) and
(ii), the Company may, if the Board of Directors determines that such
action is necessary or appropriate and not contrary to the interests of
holders of Rights, elect to issue or pay, upon the exercise of the Rights,
cash, property, shares of Preferred or Common Stock, debt or other equity
securities or any combination thereof, having an aggregate Fair Market
Value equal to the Fair Market Value of the shares of Preferred Stock which
otherwise would have been issuable pursuant to Section 11(a)(ii), which
Fair Market Value shall be determined by an investment banking firm
selected by the Board of Directors. For purposes of the preceding sentence,
the Fair Market Value of the Preferred Stock shall be as determined
pursuant to Section 11(b). Subject to Section 23 hereof, any such election
by the Board of Directors of the Company must be made and publicly
announced within thirty (30) days after the date on which the event
described in Section 11(a)(ii) occurs.
(b) For the purpose of this Rights Agreement, the "Fair Market Value"
of any share of Preferred Stock, Common Stock or any other stock or any Right or
other security or any other property on any date shall be determined as provided
in this Section 11(b). In the case of a publicly-traded stock or other security,
the Fair Market Value on any date shall be deemed to be the average of the daily
closing prices per share of such stock or per unit of such other security
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for the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event that the
Fair Market Value per share of any share of Common Stock is determined during a
period which includes any date that is within 30 Trading Days after (i) the
ex-dividend date for a dividend or distribution on such stock payable in shares
of Common Stock or securities convertible into shares of Common Stock, or (ii)
the effective date of any subdivision, split, combination, consolidation,
reverse stock split or reclassification of such stock, then, and in each such
case, the Fair Market Value shall be appropriately adjusted by the Board of
Directors of the Company to take into account ex-dividend or post-effective date
trading. 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
applicable transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange), or, if the securities are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the applicable transaction reporting system with respect to securities listed on
the principal national securities exchange on which such security is listed or
admitted to trading; or, if not listed or admitted to trading on any national
securities exchange, the last quoted price (or, if not so quoted, the average of
the high bid and low asked prices) in the over-the-counter market, as reported
by the NASDAQ or such other system then in use; or, if no bids for such security
are 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 such
security selected by the Board of Directors of the Company. The term "Trading
Day" shall mean a day on which the principal national securities exchange on
which such security is listed or admitted to trading is open for the transaction
of business or, if such security is not listed or admitted to trading on any
national securities exchange, a Business Day. If a security is not publicly held
or not so listed or traded, "Fair Market Value" shall mean the fair value per
share of stock or per other unit of such other security, as determined by an
independent investment banking firm experienced in the valuation of securities
selected in good faith by the Board of Directors of the Company, or, if no such
investment banking firm is, in the good faith judgment of the Board of
Directors, available to make such determination, in good faith by the Board of
Directors of the Company; provided, however, that for purposes of making the
adjustment provided for by Section 11(a)(ii) hereof, the Fair Market Value of a
share of Preferred Stock shall not be less than 100% of the product of the Fair
Market Value of a share of Common Stock multiplied by the higher of the then
Dividend Multiple or Vote Multiple applicable to the Preferred Stock (as defined
in the Certificate of Designations relating to the Preferred Stock) and shall
not exceed 105% of the product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock. In the case of property other than
securities, the "Fair Market Value" thereof shall be determined in good faith by
the Board of Directors of the Company based upon such appraisals or valuation
reports of such independent experts as the Board of Directors of the Company
shall in good faith determine to be appropriate in accordance with good business
practices and the interests of the holders of Rights. Any such determination of
Fair Market Value shall be described in a statement filed with the Rights Agent
and shall be binding upon the Rights Agent.
(c) All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one one-hundredth of a share, as the case may be.
-15-
(d) Irrespective of any adjustment or change in the Exercise Price or
the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Exercise Price and the number of shares to be issued upon
exercise of the Rights as in the initial Rights Certificates issued hereunder
but, nevertheless, shall represent the Rights as so adjusted.
(e) Before taking any action that would cause an adjustment reducing
the purchase price per whole share of Preferred Stock upon exercise of the
Rights below the then par value, if any, of the shares of Preferred Stock, the
Company shall use its best efforts to take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and non-assessable shares of such Preferred Stock
at such adjusted purchase price per share.
(f) Anything in this Section 11 to the contrary notwithstanding, in the
event of any reclassification of stock of the Company or any recapitalization,
reorganization or partial liquidation of the Company or similar transaction, the
Company shall be entitled to make such further adjustments in the number of
shares of Preferred Stock which may be acquired upon exercise of the Rights, and
such adjustments in the Exercise Price therefor, in addition to those
adjustments expressly required by the other paragraphs of this Section 11, as
the Board of Directors of the Company shall determine to be necessary or
appropriate in order for the holders of the Rights in such event to be treated
equitably and in accordance with the purpose and intent of this Rights Agreement
or in order that any such event shall not, but for such adjustment, in the
opinion of counsel to the Company, result in the stockholders of the Company
being subject to any United States federal income tax liability by reason
thereof.
(g) In the event the Company shall at any time after the Record Date
make any distribution on the shares of Common Stock of the Company, whether by
way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Company or otherwise, in cash or
any debt security, debt instrument, real or personal property or any other
property (other than any shares of Common Stock or other capital stock of the
Company and other than any right or warrant to acquire any such shares,
including any debt security convertible into or exchangeable for any such share,
at less than the Fair Market Value of such shares) and the amount of such cash
dividend or the Fair Market Value of such debt security, debt instrument or
property exceeds 150% of the aggregate amount of the cash dividends declared or
paid on the Common Stock of the Company in the 15-month period immediately
preceding such distribution, then and in each such event, unless such
distribution is part of or is made in connection with a transaction to which
Section 11(a)(ii) or Section 13 hereof applies, the Exercise Price shall be
reduced by an amount equal to the cash or the Fair Market Value of such
distribution, as the case may be, per share of Common Stock of the Company. For
purposes hereof, the Fair Market Value of any property distributed to the
holders of shares of Common Stock of the Company shall be the Fair Market Value
of such property as determined by an independent investment banking firm
experienced in the valuation of securities or the other property so distributed,
as the case may be, selected in good faith by the Board of Directors of the
Company, or, if no such investment banking firm is in the good faith judgment of
the Board of Directors available to make such determination, in good faith by
the Board of Directors of the Company, whose determination shall be final and
binding on the Company, the Rights Agent and the holders of Rights.
-16-
Section 12. Certification of Adjusted Exercise Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11, 13 or 23(c),
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts giving rise to such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Rights Certificate in accordance with Section 25.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or give such notice shall not affect the validity of or the force
or effect of the requirement for such adjustment. Any adjustment to be made
pursuant to Section 11, 13 or 23(c) of this Rights Agreement shall be effective
as of the date of the event giving rise to such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
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, at any time after the time that any Person
becomes an Acquiring Person, (x) the Company shall, directly or indirectly,
consolidate with, or merge with and into, any other Person or Persons (other
than an Exempt Person or Persons) and the Company shall not be the surviving or
continuing corporation of such consolidation or merger, or (y) any Person or
Persons (other than an Exempt Person) shall, directly or indirectly, consolidate
with, or merge with and into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (other than an Exempt Person) or of the Company
or cash or any other property, or (z) the Company or one or more of its
Subsidiaries shall, directly or indirectly, sell or otherwise transfer to any
other Person or any Affiliate or Associate of such Person, in one or more
transactions, or the Company or one or more of its Subsidiaries shall sell or
otherwise transfer to any Persons in one or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole), then, on the first
occurrence of any such event, proper provision shall be made so that (i) each
holder of record of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof and payment of
the Exercise Price in accordance with the terms of this Rights Agreement, such
number of shares of validly issued, fully paid, non-assessable and freely
tradable Common Stock of the Principal Party (as defined herein), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims, as
shall equal the result obtained by dividing the Exercise Price by 50% of the
Fair Market Value of the Common Stock of the Principal Party on the date of the
consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Rights Agreement; (iii) the term "Company" for all
purposes of this Rights Agreement shall thereafter be deemed to refer to such
Principal Party; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its Common
Stock in accordance with the provisions of Section 9 hereof applicable to the
reservation of Preferred Stock) in connection with such consummation as may be
necessary to
-17-
insure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; provided, however, that, upon the
subsequent occurrence of any merger, consolidation, sale of all or substantially
all of the assets, recapitalization, reclassification of shares, reorganization
or other extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Exercise Price, such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had it, at
the time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party shall
take such steps (including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other property; and (v) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the occurrence of any event described in clause (x), (y) or
(z) above of this Section 13(a).
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of the
first sentence of Section 13(a) hereof: the Person that is the issuer of
the securities into which shares of Common Stock of the Company are changed
or otherwise exchanged or converted in such merger or consolidation, or, if
there is more than one such issuer, the issuer of the Common Stock of which
has the greatest market value or (B) if no securities are so issued, (x)
the Person that is the other party to the merger or consolidation and that
survives such merger or consolidation, or, if there is more than one such
Person, the Person the Common Stock of which has the greatest market value
or (y) if the Person that is the other party to the merger or consolidation
does not survive the merger or consolidation, the Person that does survive
the merger or consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions, or, if each Person that is a party to
such transaction or transactions receives the same portion of the assets or
earning power so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever of
such Persons is the issuer of Common Stock having the greatest market value
of shares outstanding; provided, however, that in any such case, if the
Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the
term "Principal Party" shall refer to such other Person, or if such Person
is a Subsidiary, directly or indirectly, of more than one Person, the
Common Stocks of all of which are and have been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
the Common Stock having the greatest market value of shares outstanding.
-18-
(c) The Company shall not consummate any consolidation, merger or sale
or transfer of assets or earning power referred to in Section 13(a) unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance to permit
exercise in full of all Rights in accordance with this Section 13 and unless
prior thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger or sale
or transfer of assets or earning power, assume this Rights Agreement in
accordance with Section 13(a) hereof and that all rights of first refusal or
preemptive rights in respect of the issuance of shares of Common Stock of the
Principal Party upon exercise of outstanding Rights have been waived and that
such transaction shall not result in a default by the Principal Party under this
Rights Agreement, and further providing that, as soon as practicable after the
date of any consolidation, merger or sale or transfer of assets or earning power
referred to in Section 13(a) hereof, 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, use its best efforts to cause such
registration statement to become effective as soon as practicable after
such filing and use its best efforts to cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the date of expiration of the Rights, and
similarly comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial statements
for the Principal Party which comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the Exchange Act.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been
exercised shall, subject to the provisions of Section 7(e) hereof,
thereafter be exercisable in the manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its Certificate of Incorporation or By-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then Fair Market Value per
share (determined pursuant to Section 11(b) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then Fair Market Value (other than to holders of Rights pursuant to this Section
13) or (ii) providing for any special tax or similar payment in connection with
the issuance to any holder of a Right of Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the Company
shall not consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing
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that the provision in question of such Principal Party shall have been
cancelled, waived or amended, or that the authorized securities shall be
redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights (i.e., Rights to acquire less than
one one-hundredth of a share of Preferred Stock), unless such fractional Rights
result from a transaction referred to in Section 11(a)(i) hereof. If the Company
shall determine not to issue such fractional Rights, then, in lieu of such
fractional Rights, there shall be paid to the holders of record of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Fair Market Value
of a whole Right.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of one one-hundredth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Company may, at its election, issue
depositary receipts evidencing fractions of shares 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 of the rights, privileges and preferences to which they would be
entitled as owners of the Preferred Stock. With respect to fractional shares
that are not integral multiples of one one-hundredth of a share, if the Company
does not issue such fractional shares or depositary receipts in lieu thereof,
there shall be paid to the holders of record of Rights Certificates at the time
such Rights Certificates are exercised as herein provided an amount in cash
equal to the same fraction of the Fair Market Value of a share of Preferred
Stock.
(c) The holder of a Right by the acceptance of a Right expressly waives
his right to receive any fractional Right or any fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Rights Agreement, except the rights of action given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Rights 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 Rights 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 Rights
Agreement.
-20-
Section 16. Agreement of Right Holders. Each holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be evidenced by
the Book Entries representing Common Stock registered in the name of the holders
of Common Stock (together, as applicable, with the Summary of Rights), which
Book-Entries representing Common Stock shall also constitute certificates for
Rights, and not by separate Rights Certificates, and each Right shall be
transferable only simultaneously and together with the transfer of shares of
Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary; 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 a beneficial interest in a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible; and
(e) Rights beneficially owned by certain persons will under certain
circumstances set forth in this Agreement become null and void pursuant to
Section 7(e) hereof; and
(f) this Agreement may be supplemented or amended from time to time
pursuant to Section 26 hereof.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Stock or any
other securities which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a 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 (except as provided in Section 7(f) hereof), or to give or
withhold consent to any corporate action (except as provided in Section
-21-
7(f) hereof), or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Rights Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or failed to be done by the Rights Agent in connection with the
acceptance and administration of this Rights Agreement, including the cost and
expenses of defending against any claim of liability relating to the Rights or
this Rights Agreement.
(b) The Rights Agent shall be protected against, and shall incur no
liability for or in respect of, any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon any
Rights Certificate or certificate for Preferred Stock 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. In addition, anything in this Rights Agreement to the
contrary notwithstanding, in no event shall the Rights Agent be liable for
special, indirect or consequential damages of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.
Section 19. Merger or Consolidation of, or Change in Name of, the
Rights Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Rights Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Rights Agreement any of the Rights 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
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Rights Agreement.
-22-
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; in all such cases such Rights Certificates shall have
the full force provided in the Rights Certificates and in this Rights Agreement.
Section 20. Duties of the Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates by their acceptance thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President
or any Vice President and by the Treasurer or the Secretary of the Company and
delivered to the Rights Agent. Any such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights Agreement or in the
Rights 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 Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a certificate describing any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock to be issued
-23-
pursuant to this Rights Agreement or any Rights Certificate or as to whether any
shares of Preferred Stock 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 the Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President or any Vice President or 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.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days notice in writing mailed to the Company and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor Rights
Agent (with or without cause) upon 30 days notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and the Preferred Stock by registered or certified
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
Notwithstanding the foregoing provisions of this Section 21, in no event shall
the resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted such appointment. If
the Company shall fail to make such appointment within a period of 30 days after
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the incumbent Rights Agent or the holder of
record of any Rights 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
-24-
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of any state thereof, in good
standing, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination in the
conduct of its corporate trust or stock transfer business by federal or state
authorities and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $5,000,000 or (b) an Affiliate
controlled by a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed, but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and
Preferred Stock, and mail a notice thereof in writing to the registered holders
of the Rights Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be. Notwithstanding the foregoing
provisions, in the event of resignation, removal or incapacity of the Rights
Agent, the Company shall have the authority to act as the Rights Agent until a
successor Rights Agent shall have assumed the duties of the Rights Agent
hereunder.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Exercise Price per share and the number or kind or class of
shares of stock or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Rights Agreement.
Section 23. Redemption or Exchange. (a) The Company may, at its option,
but only by the vote of a majority of the Board of Directors, redeem all but not
less than all of the then outstanding Rights, at any time prior to the Close of
Business on the tenth day following the Stock Acquisition Date (subject to
extension by the Company as provided in Section 26 hereof) at a redemption price
of $0.01 per Right, subject to adjustments as provided in subsection (c) below
(the "Redemption Price"). Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable pursuant to Section
11(a)(ii) prior to the expiration of the Company's right of redemption
hereunder.
(b) Without any further action and without any notice, the right to
exercise the Rights will terminate effective at the time of the action of the
Board of Directors ordering the redemption of the Rights and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
Within ten days after the effective time of the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each notice of redemption will state the method by which
the
-25-
payment of the Redemption Price will be made. At the option of the Board of
Directors, the Redemption Price may be paid in cash to each Rights holder or by
the issuance of shares (and, at the Company's election pursuant to Section 14(b)
hereof, cash or depositary receipts in lieu of fractions of shares other than
fractions which are integral multiples of one one-hundredth (1/100) of a share)
of Preferred Stock having a Fair Market Value equal to such cash payment.
(c) In the event the Company shall at any time after the date of this
Rights Agreement (A) pay any dividend on Common Stock in shares of Common Stock,
(B) subdivide or split the outstanding shares of Common Stock into a greater
number of shares, (C) combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock or (D) issue any shares of its capital stock
in a reclassification of the Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, and in each such event, the
Redemption Price shall be adjusted so that the Redemption Price after such event
shall equal the Redemption Price immediately prior to such event multiplied 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 outstanding immediately prior to such event;
provided, however, that in each case such adjustment to the Redemption Price
shall be made only if the amount of the Redemption Price shall be reduced or
increased by $0.01 per Right.
(d) The Board of Directors of the Company may, at its option, at any
time after the tenth day following a Stock Acquisition Date and prior to the
time that an Acquiring Person becomes the Beneficial Owner of more than 50% of
the outstanding Voting Stock of the Company, elect to exchange all (but not less
than all) of the then outstanding Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e)) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted in order to protect the interests of holders of Rights
generally in the event that an event of a type analogous to any of the events
described in Section 11 shall have occurred with respect to the Common Stock
(such exchange ratio, as adjusted from time to time, being hereinafter referred
to as the "Exchange Ratio").
(e) Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. Promptly after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the then outstanding Rights
by mailing such notice in accordance with Section 25.
Section 24. Notice of Proposed Actions. (a) In case the Company, after
the Distribution Date, shall propose (i) to effect any of the transactions
referred to in Section 11(a)(i) or 11(g) or (ii) to offer to the holders of
record of its Common Stock options, warrants, or other rights to subscribe for
or to purchase shares of Common Stock (including any security convertible into
or exchangeable for Common Stock) or shares of stock of any class or any other
securities, options, warrants, convertible or exchangeable securities or other
rights, or (iii) to
-26-
effect any reclassification of its Preferred Stock or Common Stock or any
recapitalization or reorganization of the Company, or (iv) to effect any
consolidation or merger with or into, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of record of a Rights Certificate, in accordance with Section 25,
notice of such proposed action, which shall specify the record date for the
purposes of such transaction referred to in Section 11(a)(i) or such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date for determining
participation therein by the holders of record of Common Stock or Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least ten days prior
to the record date for determining holders of record of the Preferred Stock for
purposes of such action, and in the case of any such other action, at least ten
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of record of Common Stock or Preferred
Stock, whichever shall be the earlier. The failure to give notice required by
this Section 24 or any defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any such action.
(b) In case any of the transactions referred to in Section 11(a)(i),
11(g) or 13 of this Rights Agreement are proposed, then, in any such case, the
Company shall give to each holder of Rights, in accordance with Section 25
hereof, notice of the proposal of such transaction at least ten days prior to
consummating such transaction, which notice shall specify the proposed event and
the consequences of the event to holders of Rights under Section 11(a)(i), 11(g)
or 13 hereof, as the case may be, and, upon consummating such transaction, shall
similarly give notice thereof to each holder of Rights.
Section 25. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of record of
any Rights Certificate or Right to or on the Company shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
LCA Group Inc.
000 Xxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or by the
holder of record of any Rights Certificate or Right to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:
-00-
Xxxxxx Xxxxxxxx Services
00 Xxxx Xxxxxx - 0xx Xxxxx.
Xxx Xxxx, XX 00000
Re: LCA Group Inc.
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to the holder of record of any Rights
Certificate or Right shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 26. Supplements and Amendments. For as long as the Rights are
then redeemable, the Company may in its sole and absolute discretion, and the
Rights Agent shall if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of the Rights. At any time
when the Rights are not then redeemable, the Company may, and the Rights Agent
shall if the Company so directs, supplement or amend this Rights Agreement
without the approval of any holders of Rights Certificates (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein or (iii) to
change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable, provided that no such supplement or amendment
pursuant to this clause (iii) shall materially adversely affect the interest of
the holders of Rights Certificates. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights Agent
shall execute such supplement or amendment.
Section 27. Determination and Actions by the Board of Directors of the
Company, etc. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board, or 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, without limitation, a
determination to redeem or not redeem the Rights or to amend the Agreement and
whether any proposed amendment materially adversely affects the interests of the
holders of Rights Certificates). For all purposes of this Agreement, any
calculation of the number of shares of Common Stock or other securities
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock or any other
securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (y) not subject the Board to any liability
to the holders of the Rights.
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Section 28. Successors. All of the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Rights Agreement. Nothing in this Rights
Agreement shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, the holders of Common Stock in their
capacity as holders of the Rights) any legal or equitable right, remedy or claim
under this Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of record of
the Rights Certificates (and, prior to the Distribution Date, the holders of
Common Stock in their capacity as holders of the Rights).
Section 30. Delaware Contract. This Rights Agreement and each Rights
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 and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state; provided,
however, that the provisions of Sections 15, 16, 18 and 20 expressly relating to
the rights, duties and obligations of the Rights Agent shall be governed by the
laws of the State of New York without reference to New York's choice of law
rules.
Section 31. Counterparts. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 33. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
-29-
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
LCA Group Inc.
By /s/
---------------------------------------
Name:
Title:
MELLON INVESTOR SERVICES LLC
By /s/
---------------------------------------
Name:
Title:
EXHIBIT A
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT (AS
REFERRED TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS
OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND
MAY NOT BE TRANSFERRED TO ANY PERSON.
LCA GROUP INC.
SUMMARY OF RIGHTS TO PURCHASE SERIES A PREFERRED STOCK
On November ___, 2000, the Board of Directors of LCA Group Inc. (the
"Company") declared a dividend distribution of one Preferred Stock Purchase
Right for each outstanding share of Common Stock, par value $0.01 per share (the
"Common Stock"), of the Company held by stockholders of record on ______, 2000.
Each Right entitles the registered holder to purchase from the Company one
one-hundredth (1/100) of a share of preferred stock of the Company, designated
as Series A Preferred Stock (the "Preferred Stock") at a price of $___ per one
one-hundredth (1/100) of a share (the "Exercise Price"). The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and Mellon Investor Services LLC, as Rights Agent
(the "Rights Agent").
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will automatically
trade with the Common Stock.
Unless earlier redeemed, the Rights will expire (the "Final Expiration
Time") (i) at the close of business on _______, 2011 or (ii) if the Rights
Distribution Date (as defined below) shall have occurred before ______, 2011, at
the close of business on the 90th day following the Rights Distribution Date,
provided that the Board of Directors of the Company does not extend or otherwise
modify the Rights. There can be no assurance, however, as to whether or not such
Board of Directors will so extend, modify or redeem the Rights. The Rights,
unless earlier redeemed by the Company's Board of Directors or extended or
modified as described above, become exercisable by each record holder thereof,
other than the Acquiring Person (as defined below), upon the close of business
on the day (the "Rights Distribution Date") which is the earlier of (i) the
tenth day following the first date (the "Stock Acquisition Date") on which there
is a public announcement that a person or group of affiliated or associated
persons, with certain exceptions set forth below, has acquired beneficial
ownership of 15% or more of the outstanding voting stock of the Company (an
"Acquiring Person") or such earlier or later date (not beyond the thirtieth day
after the Stock Acquisition Date) as the Board of Directors may determine and
(ii) the tenth business day (or such later date as may be determined by the
Company's Board of Directors prior to such time as any person or group of
affiliated or associated persons becomes an Acquiring Person) after the date of
the commencement or announcement of a person's or group's intention to commence
a tender or exchange offer the consummation of which would result in the
ownership of 15% or more of the Company's outstanding voting stock (even if no
shares are actually purchased pursuant to such offer); prior
A-1
thereto, the Rights will not be exercisable, will not be represented by a
separate certificate, and will not be transferable apart from the Common Stock,
but will instead be evidenced with respect to any of the shares of Common Stock
held in uncertified book-entry form (a "Book-Entry") outstanding as of the
Record Date, by such Book-Entry. An Acquiring Person does not include (A) prior
to the Spin-off of the Company from U.S. Industries Inc., ("USI") USI (B) the
Company, (C) any subsidiary of the Company, (D) any employee benefit plan or
employee stock plan of the Company or of any subsidiary of the Company, or any
trust or other entity organized, appointed, established or holding Common Stock
for or pursuant to the terms of any such plan or (E) any person or group whose
ownership of 15% or more of the shares of voting stock of the Company then
outstanding results solely from (i) any action or transaction or transactions
approved by the Company's Board of Directors before such person or group became
an Acquiring Person or (ii) a reduction in the number of issued and outstanding
shares of voting stock of the Company pursuant to a transaction or transactions
approved by the Company's Board of Directors (provided that any person or group
that does not become an Acquiring Person by reason of clause (i) or (ii) above
shall become an Acquiring Person upon acquisition of an additional 1% of the
Company's voting stock unless such acquisition of additional voting stock will
not result in such person or group becoming an Acquiring Person by reason of
such clause (i) or (ii). For purposes of the foregoing, outstanding voting stock
of the Company includes voting stock that trades on a "when issued" basis on a
national securities exchange (such as the NYSE), on the National Association of
Securities Dealers Automated Quotation System or otherwise.
The Rights Agreement provides that when a person or group of affiliated
or associated persons becomes an Acquiring Person (other than pursuant to a
Qualifying Tender Offer (as defined below)), such Acquiring Person's Rights will
thereupon become null and void.
The Rights Agreement provides that until the Rights Distribution Date,
the Rights will be transferred with and only with the Common Stock. Until the
Rights Distribution Date (or earlier redemption or expiration of the Rights),
Common Stock certificates will contain a legend incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), transfer on the Corporation's Direct Registration
System of any Common Stock represented by a Book-Entry or a certificate
outstanding as of [ ] [ ], 2000, and, in each case, with or without a copy of
this Summary of Rights attached thereto, will also constitute the transfer of
the Rights associated with the Common Stock represented by such Book-Entry or
certificate. As soon as practicable following the Rights Distribution Date,
separate certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of the Common Stock as of the close of business on
the Rights Distribution Date and such separate certificates alone will evidence
the Rights from and after the Rights Distribution Date.
The Preferred Stock is nonredeemable and, unless otherwise provided
in connection with the creation of a subsequent series of preferred stock (i)
subordinate to any other series of the Company's preferred stock and (ii)
senior to the Common Stock. The Preferred Stock may not be issued except upon
exercise of Rights. Each share of Preferred Stock will be entitled to receive
when, as and if declared, a quarterly dividend in an amount equal to (i) 100
times the cash dividends declared on the Company's Common Stock, and (ii) a
preferential cash dividend, if any, in preference to holders of Common Stock in
an amount equal to $0.10 per share of Preferred Stock less the per share
amount of all cash dividends declared on the Preferred
A-2
Stock pursuant to clause (i) since the immediately preceding quarterly dividend
payment date. In addition, Preferred Stock is entitled to 100 times any noncash
dividends (other than dividends payable in equity securities) declared on the
Common Stock, in like kind. In the event of the liquidation of the Company, the
holders of Preferred Stock will be entitled to receive, for each share of
Preferred Stock, a payment in an amount equal to 100 times the payment made per
share of Common Stock. Each share of Preferred Stock will have 100 votes, voting
together with the Common Stock. In the event of any merger, consolidation or
other transaction in which Common Stock is exchanged, each share of Preferred
Stock will be entitled to receive 100 times the amount received per share of
Common Stock. The rights of Preferred Stock as to dividends, liquidation and
voting are protected by anti-dilution provisions. If the dividends accrued on
the Preferred Stock for four or more quarterly dividend periods, whether
consecutive or not, shall not have been declared and paid or irrevocably set
aside for payment, the holders of record of the Preferred Stock of the Company
of all series (including the Preferred Stock) will have the right to elect
two members to the Company's Board of Directors.
The number of shares of Series A Preferred Stock issuable upon exercise
of the Rights is subject to certain adjustments from time to time in the event
of a stock dividend on, or a subdivision, combination or issuance of capital
stock in a reclassification of, the Common Stock. The Exercise Price for the
Rights is subject to adjustment in certain circumstances, including certain
distributions of cash or other property to holders of Common Stock.
Unless the Rights are earlier redeemed, in the event that, at any time
on or after the Rights Distribution Date, the Company were to be acquired in a
merger or other business combination (in which any shares of Common Stock are
changed or converted into or exchanged for other securities or assets) or more
than 50% of the assets or earning power of the Company and its subsidiaries
(taken as a whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record of a Right, other than the Acquiring Person, will
from and after such date have the right to receive, upon payment of the Exercise
Price, that number of shares of common stock of the acquiring company having a
market value at the time of such transaction equal to two times the Exercise
Price. In addition, unless the Rights are earlier redeemed, in the event that a
person or group becomes the beneficial owner of 15% or more of the Company's
voting stock (other than pursuant to a tender or exchange offer (a "Qualifying
Tender Offer") for all outstanding shares of Common Stock that is approved by
the Board of Directors, after taking into account the long-term value of the
Company and all other factors they consider relevant), the Rights Agreement
provides that proper provision will be made so that each holder of record of a
Right, other than the Acquiring Person, will thereafter have the right to
receive, upon payment of the Exercise Price, that number of shares of the Series
A Preferred Stock having a market value at the time of the transaction equal to
two times the Exercise Price (such market value to be determined with reference
to the market value of the Common Stock as provided in the Rights Agreement).
Fractions of shares of Series A Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share) may, at the election of the
Company, be evidenced by depositary receipts. The Company may also issue cash in
lieu of fractional shares which are not integral multiples of one one-hundredth
of a share.
A-3
At any time on or prior to the close of business on the tenth day after
the time that a person has become an Acquiring Person (or such later date as may
be determined by a majority of the Board of Directors), the Company may redeem
the Rights in whole, but not in part, at a price of $0.0l per Right, subject to
adjustment (the "Redemption Price"). Immediately upon the effective time of the
action of the Board of Directors of the Company authorizing redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price. For as long as
the Rights are then redeemable, the Company may amend the Rights in any manner,
including an amendment to extend the time period in which the Rights may be
redeemed. At any time when the Rights are not then redeemable, the Company may
amend the Rights in any manner that does not materially adversely affect the
interests of holders of the Rights as such. In addition, the Board of Directors
of the Company may, at its option, at any time after the tenth day following a
Stock Acquisition Date and prior to the time that an Acquiring Person becomes
the Beneficial Owner of more than 50% of the outstanding shares of the voting
stock of the Company, elect to exchange all (but not less than all) of the then
outstanding Rights (other than Rights owned by the Acquiring Person or any
affiliate or associate thereof, which Rights become void) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of the Distribution Date (the "Exchange Ratio").
Immediately upon such action by the Board of Directors (the "Exchange Time"),
the right to exercise the Rights will terminate and each Right will thereafter
represent only the right to receive a number of shares of Common Stock equal to
the Exchange Ratio.
Until a Right is exercised, the holder, as such, will have no rights as
a stockholder of the Company, including, without limitation, the right to vote
or to receive dividends. Holders of Common Stock may, depending upon the
circumstances, recognize taxable income should the Rights become exercisable or
upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Form 10, dated ______, 2000.
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 in this summary description herein by reference.
A-4
EXHIBIT B
[Form of Rights Certificate]
Certificate No. W- _______________Rights NOT EXERCISABLE
AFTER (I) ______, 2011, OR (II) IF THE DISTRIBUTION DATE (AS
DEFINED BELOW) SHALL HAVE OCCURRED BEFORE THE DATE SPECIFIED
IN CLAUSE (I), THE DATE WHICH IS NINETY (90) DAYS AFTER THE
DISTRIBUTION DATE, OR EARLIER IF REDEEMED. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY AND
UNDER CERTAIN OTHER CIRCUMSTANCES, AT $0.0l PER RIGHT
(SUBJECT TO ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED
TO IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES AS
PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO BELOW),
RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS
OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED TO
ANY PERSON.
Rights Certificate
LCA GROUP INC.
This certifies that ____________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of _____, 2001 (the "Rights Agreement") between LCA Group
Inc., a Delaware corporation (the "Company"), and ChaseMellon Shareholder
Services L.L.C., as Rights Agent (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M. (New York City time) on (i) _____, 2011
(or if the Distribution Date shall have occurred before _____, 2011, the date
which is ninety (90) days after the Distribution Date) at the office of the
Rights Agent designated in the Rights Agreement for such purpose, or its
successor as Rights Agent, in New York City, one one-hundredth (1/100) of a
fully paid nonassessable share of Series A Preferred Stock (the "Preferred
Stock") of the Company at a purchase price of $___, as the same may from time to
time be adjusted in accordance with the Rights Agreement (the "Exercise Price"),
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase attached hereto duly executed. As provided in the Rights
Agreement, the Exercise Price and the number of shares of Preferred Stock which
may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events and, upon the happening of certain events, securities other than
shares of Preferred Stock, or other
B-1
property, may be acquired upon exercise of the Rights evidenced by this Rights
Certificate, as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of record of Rights Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated in the Rights Agreement
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder of
record to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option or under
certain other circumstances at a redemption price of $0.0l per Right. No
fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth (1/100) of a share) are required to be issued
upon the exercise of any Right or Rights evidenced hereby, and in lieu thereof
the Company may cause depositary receipts to be issued and/or a cash payment may
be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at meeting
thereof, or to give or withhold consent to any corporate action or to receive
notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights Certificate shall
have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
B-2
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of , .
---------------------- --
Attest:
---------------------------
LCA GROUP INC.
By:
-------------------------------
Secretary
Title:
Countersigned:
[ ]
By
---------------------------------
Authorized Signature
B-3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificates.)
FOR VALUE RECEIVED ______________________________________ hereby sells,
assigns and transfers unto______________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
Rights evidenced by this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint [ ]
Attorney to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ,
------------- -----
----------------------------------
Signature
Signature Guaranteed:
B-4
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Associate or an Affiliate thereof (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).
Dated: ,
------------- ---- ---------------------------
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-5
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder
desires to exercise the Rights Certificate.)
TO LCA GROUP INC.:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of such Rights and requests that
certificates for such share(s) be issued in the following:
name:
Please insert social security or other identifying number:______________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number:______________________
________________________________________________________________________________
(Please print name and address)
Dated: ,
----------------- -----
--------------------------------------
Signature
Signature must conform in all respects
to name of holder as specified on the
fact of this Rights Certificate)
Signature Guaranteed:
B-6
EXHIBIT C
FORM OF CERTIFICATE OF
DESIGNATIONS OF
SERIES A PREFERRED STOCK
OF LCA GROUP INC.
Pursuant to Section 151 of the
Delaware General Corporation Law
I, [name], [office] of LCA Group Inc., a corporation organized and
existing under the Delaware General Corporation Law (the "Company"), in
accordance with the provisions of Section 151 of such law, DO HEREBY CERTIFY
that pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Company, the Board of Directors on January
__, 2001 adopted the following resolution which creates a series of 150,000
shares of Preferred Stock designated as Series A Preferred Stock, as follows:
RESOLVED, that pursuant to Section 151(g) of the Delaware General
Corporation Law and the authority vested in the Board of Directors of the
Company in accordance with the provisions of ARTICLE IV of the Amended and
Restated Certificate of Incorporation of the Company, a series of Preferred
Stock of the Company be, and hereby is, created, and the powers, designations,
preferences and relative, participating, optional or other special rights of the
shares of such series, and the qualifications, limitations or restrictions
thereof, be, and hereby are, as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock" (the "Series A Preferred Stock") and
the number of shares constituting such series shall be 150,000.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series A Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount per share (rounded to
the nearest cent) equal to 100 times the aggregate per share amount of all cash
dividends declared or paid on the Common Stock, $0.01 par value per share, of
the Company (the "Common Stock") and (ii) a preferential cash dividend (the
"Preferential Dividends"), if any, in preference to the holders of Common Stock,
on the first day of February, May, August and November of each year (each 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, payable in an amount (except in the case of the first
Quarterly Dividend Payment if the date of the first issuance of Series A
Preferred Stock is a date other than a Quarterly Dividend Payment date, in which
case such payment shall be a prorated amount of such amount) equal to $0.10 per
share of Series A Preferred Stock less the per share amount of all cash
dividends declared on the Series A Preferred Stock pursuant to clause (i) of
this sentence since the immediately preceding Quarterly Dividend Payment Date
or,
C-1
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. In the
event the Company shall, at any time after the issuance of any share or fraction
of a share of Series A Preferred Stock, make any distribution on the shares of
Common Stock of the Company, whether by way of a dividend or a reclassification
of stock, a recapitalization, reorganization or partial liquidation of the
Company or otherwise, which is payable in cash or any debt security, debt
instrument, real or personal property or any other property (other than cash
dividends subject to the immediately preceding sentence, a distribution of
shares of Common Stock or other capital stock of the Company or a distribution
of rights or warrants to acquire any such share, including any debt security
convertible into or exchangeable for any such share, at a price less than the
Fair Market Value (as hereinafter defined) of such share), then, and in each
such event, the Company shall simultaneously pay on each then outstanding share
of Series A Preferred Stock of the Company a distribution, in like kind, of 100
times such distribution paid on a share of Common Stock (subject to the
provisions for adjustment hereinafter set forth). The dividends and
distributions on the Series A Preferred Stock to which holders thereof are
entitled pursuant to clause (i) of the first sentence of this paragraph and
pursuant to the second sentence of this paragraph are hereinafter referred to as
"Dividends" and the multiple of such cash and non-cash dividends on the Common
Stock applicable to the determination of the Dividends, which shall be 100
initially but shall be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Dividend Multiple." In the event the Company
shall at any time after November __, 2000 (i) declare or pay any dividend or
make any distribution on Common Stock payable in shares of Common Stock, (ii)
effect a subdivision or split or a combination, consolidation or reverse split
of the outstanding shares of Common Stock into a greater or lesser number of
shares of Common Stock, or (iii) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then in each such case the Dividend Multiple
thereafter applicable to the determination of the amount of Dividends which
holders of shares of Series A Preferred Stock shall be entitled to receive shall
be the Dividend Multiple applicable immediately prior to such event multiplied
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 each Dividend at the same time it
declares any cash or non-cash dividend or distribution on the Common Stock in
respect of which a Dividend is required to be paid. No cash or non-cash dividend
or distribution on the Common Stock in respect of which a Dividend is required
to be paid shall be paid or set aside for payment on the Common Stock unless a
Dividend in respect of such dividend or distribution on the Common Stock shall
be simultaneously paid, or set aside for payment, on the Series A Preferred
Stock.
(C) Preferential Dividends shall begin to accrue on outstanding shares
of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of any shares of Series A Preferred Stock.
Accrued but unpaid Preferential Dividends shall cumulate but shall not bear
interest. Preferential 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.
C-2
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provisions 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 holders of the Common Stock. The
number of votes which a holder of Series A Preferred Stock is entitled to cast,
as the same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple." In the event the Company shall
at any time after November __, 2000, (i) declare or pay any dividend on Common
Stock payable in shares of Common Stock, (ii) effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, or (iii) issue
any shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), then in
each such case the Vote Multiple thereafter applicable to the determination of
the number of votes per share to which holders of shares of Series A Preferred
Stock shall be entitled after such event shall be the Vote Multiple immediately
prior to such event multiplied 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, in the Certificate of
Incorporation or By-laws, 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) In the event that the Preferred Dividends accrued on the Series A
Preferred Stock for four or more quarterly dividend periods, whether consecutive
or not, shall not have been declared and paid or irrevocably set aside for
payment, the holders of record of Preferred Stock of the Company of all series
(including the Series A Preferred Stock), other than any series in respect of
which such right is expressly withheld by the Certificate of Incorporation or
the authorizing resolutions included in any Certificate of Designations
therefor, shall have the right, at the next meeting of stockholders called for
the election of directors, to elect two members to the Board of Directors, which
directors shall be in addition to the number required by the By-laws prior to
such event, to serve until the next Annual Meeting and until their successors
are elected and qualified or their earlier resignation, removal or incapacity or
until such earlier time as all accrued and unpaid Preferential Dividends upon
the outstanding shares of Series A Preferred Stock shall have been paid (or
irrevocably set aside for payment) in full. The holders of shares of Series A
Preferred Stock shall continue to have the right to elect directors as provided
by the immediately preceding sentence until all accrued and unpaid Preferential
Dividends upon the outstanding shares of Series A Preferred Stock shall have
been paid (or set aside for payment) in full. Such directors may be removed and
replaced by such stockholders, and vacancies in such directorships may be filled
only by such stockholders (or by the remaining director elected by such
stockholders, if there be one) in the manner permitted by law; provided,
however, that any such action by stockholders shall be taken at a meeting of
stockholders and shall not be taken by written consent thereto. (D) Except as
otherwise required by the Certificate of Incorporation or By-laws or set forth
herein, holders of Series A Preferred Stock shall have no
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other 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 the taking of any corporate action.
Section 4. Certain Restrictions.
(A) Whenever Preferential Dividends or Dividends are in arrears or the
Company shall be in default of payment thereof, thereafter and until all accrued
and unpaid Preferential Dividends and Dividends, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid or set
irrevocably aside for payment in full, and in addition to any and all other
rights which any holder of shares of Series A Preferred Stock may have in such
circumstances, 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 as to dividends with the Series A
Preferred Stock, unless dividends are 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 if the full dividends accrued thereon were to
be paid;
(ii) except as permitted by subparagraph (iv) of this paragraph 4(A),
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 stock of the Company
ranking junior (both as to dividends and upon liquidation, dissolution or
winding up) to the Series A Preferred Stock; or
(iii) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with
the Series A Preferred Stock (either as to dividends or upon liquidation,
dissolution or winding up), except in accordance with a purchase offer made
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 (as hereinafter
defined) 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. A "Subsidiary" of the Company shall mean any corporation or other
entity of which securities or other ownership interests having
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ordinary voting power sufficient to elect a majority of the board of directors
of such corporation or other entity or other persons performing similar
functions are beneficially owned, directly or indirectly, by the Company or by
any corporation or other entity that is otherwise controlled by the Company.
(C) The Company shall not issue any shares of Series A Preferred Stock
except upon exercise of Rights issued pursuant to that certain Rights Agreement
dated as of November __, 2000 between the Company and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent, a copy of which is on file with the Secretary
of the Company at its principal executive office and shall be made available to
stockholders of record without charge upon written request therefor addressed to
said Secretary. Notwithstanding the foregoing sentence, nothing contained in the
provisions hereof shall prohibit or restrict the Company from issuing for any
purpose any series of Preferred Stock with rights and privileges similar to,
different from, or greater than, those of the Series A Preferred Stock.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
upon their retirement and cancellation shall become authorized but unissued
shares of Preferred Stock, without designation as to series, and such shares may
be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
Section 6. Liquidation, Dissolution or Winding Up. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Company, no
distribution shall be made (i) 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 the holders of shares of Series A Preferred
Stock shall have received, subject to adjustment as hereinafter provided, (A)
$65 per one one-hundredth (1/100) share plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment or, (B) if greater than the amount specified in clause (i)(A) of
this sentence, an amount equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, as the same may be adjusted as
hereinafter provided and (ii) to the holders of stock ranking on a parity upon
liquidation, dissolution or winding up with the Series A Preferred Stock, unless
simultaneously therewith distributions are made ratably on the Series A
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series A Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series A Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Company pursuant to
clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Company applicable pursuant to said clause to
the determination of the Participating Liquidation Amount, as said multiple may
be adjusted from time to time as hereinafter provided, is hereinafter referred
to as the "Liquidation Multiple." In the event the Company shall at any time
after November __, 2000 (i) declare or pay any dividend on Common Stock payable
in shares of Common Stock, (ii) effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into a
greater or lesser
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number of shares of Common Stock, or (iii) issue any shares of its capital stock
in a reclassification of the Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is continuing
or surviving corporation), then, in each such case, the Liquidation Multiple
thereafter applicable to the determination of the Participating Liquidation
Amount to which holders of Series A Preferred Stock shall be entitled after such
event shall be the Liquidation Multiple applicable immediately prior to such
event multiplied 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 7. Certain Reclassification and Other Events.
(A) In the event that holders of shares of Common Stock of the Company
receive after November __, 2000 in respect of their shares of Common Stock any
share of capital stock of the Company (other than any share of Common Stock of
the Company), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution or otherwise (a "Transaction"),
then, and in each such event, the dividend rights, voting rights and rights upon
the liquidation, dissolution or winding up of the Company of the shares of
Series A Preferred Stock shall be adjusted so that after such event the holders
of Series A Preferred Stock shall be entitled, in respect of each share of
Series A Preferred Stock held, in addition to such rights in respect thereof to
which such holder was entitled immediately prior to such adjustment, to (i) such
additional dividends as equal the Dividend Multiple in effect immediately prior
to such Transaction multiplied by the additional dividends which the holder of a
share of Common Stock shall be entitled to receive by virtue of the receipt in
the Transaction of such capital stock, (ii) such additional voting rights as
equal the Vote Multiple in effect immediately prior to such Transaction
multiplied by the additional voting rights which the holder of a share of Common
Stock shall be entitled to receive by virtue of the receipt in the Transaction
of such capital stock and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Company as equal the Liquidation Multiple in
effect immediately prior to such Transaction multiplied by the additional amount
which the holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company by virtue of the receipt
in the Transaction of such capital stock, as the case may be, all as provided by
the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of the Company
receive after November ___, 2000 in respect of their shares of Common Stock any
right or warrant to purchase Common Stock (including as such a right, for all
purposes of this paragraph, any security convertible into or exchangeable for
Common Stock) at a purchase price per share less than the Fair Market Value of a
share of Common Stock on the date of issuance of such right or warrant, then and
in each such event the dividend rights, voting rights and rights upon the
liquidation, dissolution or winding up of the Company of the shares of Series A
Preferred Stock shall each be adjusted so that after such event the Dividend
Multiple, the Vote Multiple and the Liquidation Multiple shall each be the
product of the Dividend Multiple, the Vote Multiple and the Liquidation
Multiple, as the case may be, in effect immediately prior to such event
multiplied by a fraction the numerator of which shall be the number of shares of
Common Stock outstanding immediately before such issuance of rights or warrants
plus the maximum number of shares of Common Stock which could be acquired upon
exercise in full of all such rights or
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warrants and the denominator of which shall be the number of shares of Common
Stock outstanding immediately before such issuance of rights or warrants plus
the number of shares of Common Stock which could be purchased, at the Fair
Market Value of the Common Stock at the time of such issuance, by the maximum
aggregate consideration payable upon exercise in full of all such rights or
warrants.
(C) In the event that holders of shares of Common Stock of the Company
receive after November __, 2000 in respect of their shares of Common Stock any
right or warrant to purchase capital stock of the Company (other than shares of
Common Stock), including as such a right, for all purposes of this paragraph,
any security convertible into or exchangeable for capital stock of the Company
(other than Common Stock), at a purchase price per share less than the Fair
Market Value of such shares of capital stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights, voting rights
and rights upon liquidation, dissolution or winding up of the Company of the
shares of Series A Preferred Stock shall each be adjusted so that after such
event each holder of a share of Series A Preferred Stock shall be entitled, in
respect of each share of Series A Preferred Stock held, in addition to such
rights in respect thereof to which such holder was entitled immediately prior to
such event, to receive (i) such additional dividends as equal the Dividend
Multiple in effect immediately prior to such event multiplied, first, by the
additional dividends to which the holder of a share of Common Stock shall be
entitled upon exercise of such right or warrant by virtue of the capital stock
which could be acquired upon such exercise and multiplied again by the Discount
Fraction (as hereinafter defined) and (ii) such additional voting rights as
equal the Vote Multiple in effect immediately prior to such event multiplied,
first, by the additional voting rights to which the holder of a share of Common
Stock shall be entitled upon exercise of such right or warrant by virtue of the
capital stock which could be acquired upon such exercise and multiplied again by
the Discount Fraction and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Company as equal the Liquidation Multiple in
effect immediately prior to such event multiplied, first, by the additional
amount which the holder of a share of Common Stock shall be entitled to receive
upon liquidation, dissolution or winding up of the Company upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon
such exercise and multiplied again by the Discount Fraction. For purposes of
this paragraph, the "Discount Fraction" shall be a fraction the numerator of
which shall be the difference between the Fair Market Value of a share of the
capital stock subject to a right or warrant distributed to holders of shares of
Common Stock of the Company as contemplated by this paragraph immediately after
the distribution thereof and the purchase price per share for such share of
capital stock pursuant to such right or warrant and the denominator of which
shall be the Fair Market Value of a share of such capital stock immediately
after the distribution of such right or warrant.
(D) For purposes of this Certificate of Designations, the "Fair Market
Value" of a share of capital stock of the Company (including a share of Common
Stock) on any date shall be deemed to be the average of the daily closing price
per share thereof over the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that, in
the event that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or distribution on stock
payable in shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split,
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combination, consolidation, reverse stock split or reclassification of such
stock, then, and in each such case, the Fair Market Value shall be appropriately
adjusted by the Board of Directors of the Company to take into account
ex-dividend or post-effective date trading. 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 applicable transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange), or, if the shares are not listed or admitted to trading on the New
York Stock Exchange, as reported in the applicable transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the shares are listed or admitted to trading or, if the 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 Quotation System ("NASDAQ") or such other
system then in use, or if on any such date the 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 shares selected by the Board of
Directors of the Company. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares are listed or
admitted to trading is open for the transaction of business or, if the shares
are not listed or admitted to trading on any national securities exchange, on
which the New York Stock Exchange or such other national securities exchange as
may be selected by the Board of Directors of the Company is open. If the shares
are not publicly held or not so listed or traded on any day within the period of
30 Trading Days applicable to the determination of Fair Market Value thereof as
aforesaid, "Fair Market Value" shall mean the fair market value thereof per
share as determined in good faith by the Board of Directors of the Company. In
either case referred to in the foregoing sentence, the determination of Fair
Market Value shall be described in a statement filed with the Secretary of the
Company.
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 each
outstanding share of Series A Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other property (payable in like kind), as the case may
be, for which or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Vote Multiple, the Dividend Multiple or the
Liquidation Multiple in effect immediately prior to such event.
Section 9. Effective Time of Adjustments.
(A) Adjustments to the Series A Preferred Stock required by the
provisions hereof shall be effective as of the time at which the event requiring
such adjustments occurs.
(B) The Company shall give prompt written notice to each holder of a
share of Series A Preferred Stock of the effect of any adjustment to the voting
rights, dividend rights or rights upon liquidation, dissolution or winding up of
the Company of such shares required by the provisions hereof. Notwithstanding
the foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment.
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Section 10. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Company may acquire
shares of Series A Preferred Stock in any other manner permitted by law, the
provisions hereof and the Certificate of Incorporation of the Company.
Section 11. Ranking. Unless otherwise provided in the Certificate of
Incorporation of the Company or a Certificate of Designations relating to a
subsequent series of preferred stock of the Company, the Series A Preferred
Stock shall rank junior to all other series of the Company's preferred stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up and senior to the Common Stock.
Section 12. Amendment. The provisions hereof and the Certificate of
Incorporation of the Company shall not be amended in any manner which would
adversely affect the rights, privileges or powers of the Series A Preferred
Stock without, in addition to any other vote of stockholders required by law,
the affirmative vote of the holders of two-thirds or more of the outstanding
shares of Series A Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, I have executed and subscribed this Certificate of
Designations and do affirm the foregoing as true under the penalties of perjury
this ______ day of ___________, 2000.
----------------------------------
Name:
Title:
ATTEST:
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