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Exhibit 4
Starwood Hotels & Resorts Worldwide, Inc.
and
ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent
------------------------------------
Rights Agreement
Dated as of March 15, 1999
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Table of Contents
Section Page
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Section 1. Certain Definitions.................................................................... 1
Section 2. Appointment of Rights Agent............................................................ 5
Section 3. Issue of Rights Certificates........................................................... 5
Section 4. Form of Rights Certificates............................................................ 7
Section 5. Countersignature and Registration...................................................... 8
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates................................................ 9
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights......................................................... 10
Section 8. Cancellation and Destruction of Rights
Certificates...................................................................... 11
Section 9. Reservation and Availability of Stock.................................................. 12
Section 10. Preferred Stock Record Date............................................................ 13
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights............................................... 14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares............................. 22
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power....................................................... 22
Section 14. Fractional Rights and Fractional Shares................................................ 24
Section 15. Rights of Action....................................................................... 25
Section 16. Agreement of Rights Holders............................................................ 26
Section 17. Rights Certificate Holder Not Deemed a Stockholder..................................... 26
Section 18. Concerning the Rights Agent............................................................ 27
Section 19. Merger or Consolidation or Change of Name
of Rights Agent................................................................... 27
Section 20. Duties of Rights Agent................................................................. 28
Section 21. Change of Rights Agent................................................................. 31
Section 22. Issuance of New Rights Certificates.................................................... 31
Section 23. Redemption and Termination............................................................. 32
Section 24. Exchange............................................................................... 33
Section 25. Notice of Certain Events............................................................... 34
Section 26. Notices................................................................................ 35
Section 27. Supplements and Amendments............................................................. 35
Section 28. Successors............................................................................. 35
Section 29. Determination and Actions by the Board of Directors, etc............................... 36
Section 30. Benefits of this Agreement............................................................. 36
Section 31. Severability........................................................................... 36
Section 32. Governing Law.......................................................................... 36
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Section 33. Counterparts........................................................................... 37
Section 34. Descriptive Headings................................................................... 37
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RIGHTS AGREEMENT
RIGHTS AGREEMENT dated as of March 15, 1999 (the "Agreement"),
between STARWOOD HOTELS & RESORTS WORLDWIDE, INC., a Maryland corporation (the
"Corporation"), and CHASEMELLON SHAREHOLDER 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:
WHEREAS (i) on March 15, 1999 (the "Rights Dividend
Declaration Date"), the Corporation declared a dividend distribution of one
Right (as hereinafter defined) for each share of Common Stock (as hereinafter
defined) of the Corporation outstanding at the Close of Business (as hereinafter
defined) on April 5, 1999 (the "Record Date"), each Right initially representing
the right to purchase one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Corporation
having the rights, powers and preferences set forth in the form of Articles
Supplementary attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (the "Rights"), and (ii) the Board of Directors
of the Corporation has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p)) for each
share of Common Stock of the Corporation issued between the Record Date and the
earlier of the Distribution Date and the Expiration Date (as such terms are
hereinafter defined) or, in certain circumstances provided in Section 22, after
the Distribution Date;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include the Corporation, any Subsidiary of
the Corporation, any employee benefit plan of the Corporation or of any
Subsidiary of the Corporation, or any Person organized, appointed or
established by the Corporation for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of shares of Common
Stock by the Corporation which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the shares of Common Stock then
outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding by reason of share purchases by the Corporation and shall,
after such share purchases by the Corporation, become the Beneficial
Owner of any additional shares of Common Stock, then such Person shall
be deemed to be an "Acquiring Person". Notwithstanding the foregoing,
if the Board
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of Directors of the Corporation 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 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 be
deemed not to be an "Acquiring Person" for any purposes of this
Agreement.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange
rights, other rights, warrants or options, or otherwise;
provided, however, that a Person shall be deemed not the
"Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering
Event or (C) securities issuable upon exercise of Rights from
and after the occurrence of a Triggering Event, which Rights
were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 (the "Original Rights")
or pursuant to Section 11(i) in connection with an adjustment
made with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall be deemed not
the "Beneficial Owner" of, or to "beneficially own," any
security by reason of this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response
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to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act and (B)
is not also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso to subparagraph (ii) of this
paragraph (d)) or disposing of any voting securities of the
Corporation;
provided, however, that nothing in this paragraph (d) shall cause a
Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities
acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the
date of such acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York
or the State of California are authorized or obligated by law or
executive order to close.
(f) "Class B Shares" shall mean the Class B Shares of
beneficial interest, par value $.01 per share, of the Trust or any
shares of beneficial interest of the Trust into which such Class B
Shares may be changed.
(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.
(h) "Common Stock" shall mean the common stock, par value $.01
per share, of the Corporation, except that "Common Stock" when used
with reference to any Person other than the Corporation shall mean the
class or series of stock of such Person with the greatest voting power,
or, if such Person is not a corporation, the equity securities or other
equity interest issued by such Person having power to control or direct
the management of such Person.
(i) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement.
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(j) "Person" shall mean any individual, firm, limited
liability company, corporation, partnership or other entity and shall
include any successor (by merger or otherwise) of such entity.
(k) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the
Corporation, and, to the extent that there is not a sufficient number
of shares of Series A Junior Participating Preferred Stock authorized
to permit the full exercise of the Rights, any other series of
preferred stock, par value $.01 per share, of the Corporation
designated for such purpose containing terms substantially similar to
the terms of the Series A Junior Participating Preferred Stock.
(l) "Section 11(a)(ii) Event" shall mean the event described
in Section 11(a)(ii).
(m) "Section 13 Event" shall have the meaning set forth in
Section 13(a).
(n) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, a press release or a report filed pursuant
to Section 13(d) of the Exchange Act) by the Corporation or an
Acquiring Person substantially to the effect that an Acquiring Person
has become such.
(o) "Subsidiary" shall mean, with reference to any Person, any
other Person (other than an individual) of which an amount of voting
securities sufficient to elect at least a majority of the board of
directors (or comparable body) of such other Person is beneficially
owned by such Person, or otherwise controlled by such Person.
(p) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
(q) "Trust" shall mean Starwood Hotels & Resorts, a Maryland
real estate investment trust, and any successor.
(r) "Units" shall mean units consisting of one Class B Share
attached to one share of Common Stock and represented by a single share
certificate, as provided in the Amended and Restated Intercompany
Agreement dated as of January 6, 1999, between the Corporation and the
Trust, as amended from time to time; provided, however, that from and
after the date, if any, upon which the Common Stock becomes generally
transferable separately from the Class B Shares, "Units" shall mean the
Common Stock; and provided, further, that in the event that the Trust
shall at any time after the Rights Dividend Declaration Date declare or
pay any distribution consisting in whole or in part of Class B Shares,
or subdivide, combine or otherwise reclassify such Class B Shares, the
number and class of
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securities comprising a Unit shall be adjusted such that each Unit
shall, for purposes of this Agreement, consist of one share of Common
Stock and the number of Class B Shares and/or any other shares of
beneficial interest in the Trust that a holder of one Class B Share
would have held or been entitled to receive after giving effect to such
distribution, subdivision, combination or other reclassification.
In addition, for purposes of this Agreement, the following
terms have the meanings indicated in specified sections of this Agreement: (i)
"Adjustment Shares" shall have the meaning set forth in Section 11(a)(ii); (ii)
"common stock equivalents" shall have the meaning set forth in Section
11(a)(iii); (iii) "current market price" shall have the meaning set forth in
Section 11(d); (iv) "Current Value" shall have the meaning set forth in Section
11(a)(iii); (v) "Distribution Date" shall have the meaning set forth in Section
3(a); (vi) "equivalent preferred stock" shall have the meaning set forth in
Section 11(b); (vii) "Exchange Ratio" shall have the meaning set forth in
Section 24(a); (viii) "Expiration Date" shall have the meaning set forth in
Section 7(a); (ix) "Final Expiration Date" shall have the meaning set forth in
Section 7(a); (x) "Nasdaq" shall have the meaning set forth in Section 11(d)(i);
(xi) "Principal Party" shall have the meaning set forth in Section 13(b); (xii)
"Purchase Price" shall have the meaning set forth in Section 4(a); (xiii)
"Record Date" shall have the meaning set forth in the recitals hereof; (xiv)
"Redemption Price" shall have the meaning set forth in Section 23(a); (xv)
"Rights" shall have the meaning set forth in the recitals hereof; (xvi) "Rights
Certificates" shall have the meaning set forth in Section 3(a); (xvii) "Rights
Dividend Declaration Date" shall have the meaning set forth in the recitals
hereof; (xviii) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii); (xix) "Spread" shall have the meaning set forth in
Section 11(a)(iii); (xx) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii); (xxi) "Summary of Rights" shall have the meaning set
forth in Section 3(b); and (xxii) "Trading Day" shall have the meaning set forth
in Section 11(d)(i).
Section 2. Appointment of Rights Agent. The Corporation hereby
appoints the Rights Agent to act as agent for the Corporation in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions of any
such co-Rights Agent.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the Close of Business on the
Record Date) or (ii) the Close of Business on the tenth Business Day (or such
later date as may be determined by action of the Board of Directors of the
Corporation prior to such time as any Person becomes an Acquiring Person) after
the date that a tender or exchange offer by any Person (other than the
Corporation, any Subsidiary of the Corporation, any employee benefit plan of the
Corporation or of any Subsidiary of the Corporation, or any Person organized,
appointed or established by the Corporation for or
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pursuant to the terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and Regulations under
the Exchange Act (or any successor rule), if upon consummation thereof, such
Person would be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, (the earlier of (i) and (ii) being herein referred to as
the "Distribution Date"), (x) the Rights will be represented (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates and (y) the Rights will be transferable
only in connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Corporation). As soon as practicable after the
Distribution Date and once the Rights Agent has been provided with all necessary
information, the Rights Agent will send by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock as of the Close of Business on
the Distribution Date, at the address of such holder shown on the records of the
Corporation, one or more Rights certificates, in substantially the form of
Exhibit B hereto (the "Rights Certificates"), representing one Right for each
share of Common Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11(p), at the time of distribution of the Rights
Certificates, the Corporation shall make the necessary and appropriate
adjustments (in accordance with Section 14(a)) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of and after the Distribution Date, the Rights
will be represented solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Corporation will send a copy of a Summary of Rights to Purchase Preferred Stock,
in substantially the form attached hereto as Exhibit C (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of 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 Corporation. With respect to
certificates for the Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be represented by such certificates
registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto. Until the earlier of the Distribution Date
or the Expiration Date, the surrender for transfer of any certificate
representing shares of Common Stock in respect of which Rights have been issued,
with or without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with such shares of Common
Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date or, in certain circumstances provided in Section 22,
after the Distribution Date. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for Rights, and shall bear a
legend substantially in the following form:
This certificate also represents and entitles the holder
hereof to certain rights as set forth in the Rights Agreement dated as
of March 15, 1999 (the "Rights Agreement") between Starwood Hotels &
Resorts Worldwide, Inc. (the
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"Corporation") and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent (the "Rights Agent"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
offices of the Corporation. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be represented by separate
certificates and will no longer be represented by this certificate. The
Corporation will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or by
any subsequent holder, may become null and void and will no longer be
transferable.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
represented by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the surrender
for transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificates. In
the event the Corporation purchases or acquires any shares of its Common Stock
after the Record Date but prior to the Distribution Date, any Rights associated
with such shares shall be deemed cancelled and retired so that the Corporation
shall not be entitled to exercise any Rights associated with shares of Common
Stock that are not outstanding. Notwithstanding this Section 3(c), the omission
of a legend shall not affect the enforceability of any part of this Agreement or
the rights of any holder of the Rights.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Corporation may deem appropriate (but which do not affect
the duties or responsibilities of the Rights Agent hereunder) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date or, in the case of Rights with
respect to shares of Common Stock issued or becoming outstanding after the
Record Date, the same date as the stock certificate representing such shares,
and on their face shall entitle the holders thereof to purchase such number of
one one-thousandths of a share of Preferred Stock as shall be set forth therein
at the price set forth therein (such exercise price per one one-thousandth of a
share, the "Purchase Price"), but the amount and type of securities purchasable
upon the exercise of each Right and the
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Purchase Price thereof shall be subject to adjustment from time to time as
provided in Sections 11 and 13(a).
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 that represents Rights beneficially owned by any Person known to be:
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person (or any Associate or Affiliate
thereof) to holders of equity interests in such Acquiring Person (or any
Associate or Affiliate thereof) or to any Person with whom such Acquiring Person
(or any Associate or Affiliate thereof) has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Corporation has determined is part of a
plan, arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e), and any Rights Certificate issued pursuant to Section
6 or Section 11 upon transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Corporation by its Chairman of the Board, its Chief Executive Officer, its
President or any Vice President, either manually or by facsimile signature, and
shall have affixed thereto the Company's seal or a facsimile thereof which shall
be attested by the Secretary or an Assistant Secretary of the Corporation,
either manually or by facsimile signature. The Rights Certificates shall be
countersigned manually or by facsimile signature by the Rights Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of the
Corporation who shall have signed any of the Rights Certificates shall cease to
be such officer of the Corporation before countersignature by the Rights Agent
and issuance and delivery by the Corporation, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Corporation with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such officer of the
Corporation; and any Rights Certificates may be signed on behalf of the
Corporation by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Corporation to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
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(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept (to the extent all necessary information has been
received by the Rights Agent), at its principal office or offices designated as
the appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights represented on its face
by each of the Rights Certificates and the certificate number and the date of
each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14, at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the Expiration Date, any Rights Certificate or
Certificates (other than Rights Certificates representing Rights that have
become null and void pursuant to Section 7(e) or that have been exchanged
pursuant to Section 24) may be transferred, split up, combined or exchanged for
another Rights Certificate or Certificates, entitling the registered holder to
purchase a like number of one one-thousandths of a share of Preferred Stock (or,
following a Triggering Event, Units, other securities, cash or other assets, as
the case may be) as the Rights Certificate or Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Certificates
to be transferred, split up, combined or exchanged at the principal office or
offices of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Corporation shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Rights Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the
Corporation or the Rights Agent shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e), Section 14 and Section 24,
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Corporation may
require payment of a sum sufficient to cover any tax or charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates. Neither the Rights Agent nor the Corporation shall have any
duty or obligation under this Section 6 unless and until they are satisfied that
all such taxes and/or changes have been paid.
(b) Upon receipt by the Corporation 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 satisfactory to them, and reimbursement to the
Corporation and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificates if mutilated, the Corporation will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
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Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) Subject to Section 7(e), the registered holder of any Rights
Certificate may exercise the Rights represented thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23) in
whole or in part at any time after the Distribution Date upon surrender of the
Rights Certificate, with the form of election to purchase and the certificate on
the reverse side thereof duly executed, to the Rights Agent at the office or
offices of the Rights Agent designated for such purpose, together with payment
of the aggregate Purchase Price with respect to the total number of one
one-thousandths of a share of Preferred Stock (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earliest of (i) the Close of Business on April
5, 2009 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 or (iii) the time at which such Rights are
exchanged pursuant to Section 24 (the earliest of (i), (ii) and (iii) being
herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of a share
of Preferred Stock pursuant to the exercise of a Right shall initially be $125,
and shall be subject to adjustment from time to time as provided in Sections 11
and 13(a) and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate on
the reverse side thereof duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per one one-thousandth of a share
of Preferred Stock (or other shares, securities, cash or other assets, as the
case may be) to be purchased as set forth below and an amount equal to any
applicable tax or charge required to be paid by the holder of the Rights
Certificate in accordance with Section 9(e), the Rights Agent shall, subject to
Section 20(k), thereupon promptly (i) (A) requisition from any transfer agent of
the shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of one
one-thousandths of a share of Preferred Stock to be purchased and the
Corporation hereby irrevocably authorizes its transfer agent to comply with all
such requests or (B) if the Corporation shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-thousandths of a share
of Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Corporation will direct the
depositary agent to comply with such request, (ii) requisition from the
Corporation the amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder and (iv) after receipt thereof, deliver such
cash, if any, to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii)) shall be made in cash or by certified bank check
or bank draft payable to the order of the Corporation. In the event that the
Corporation is obligated to issue other securities (including Units) of the
Corporation or the
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Trust, pay cash and/or distribute other property pursuant to Section 11(a), the
Corporation will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when necessary to comply with the terms of this Agreement. The
Corporation reserves the right to require prior to the occurrence of a
Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights represented thereby, a new Rights
Certificate representing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person (or
any Affiliate or Associate thereof) to holders of equity interests in such
Acquiring Person (or any Affiliate or Associate thereof) or to any Person with
whom the Acquiring Person (or any Affiliate or Associate thereof) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Corporation has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall become null
and void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Corporation shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) are complied
with, but neither the Corporation nor the Rights Agent shall have any liability
to any holder of Rights Certificates or other Person as a result of the
Company's failure to make any determinations with respect to an Acquiring Person
or any of its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Corporation 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) properly completed and signed the certificate contained in
the form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Corporation or the Rights Agent 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
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shall, if surrendered to the Corporation or any of its agents, be delivered to
the Rights Agent for cancellation or in cancelled form, or, if surrendered to
the Rights Agent, shall be cancelled by it, and no Rights Certificates shall be
issued in lieu thereof, except as expressly permitted by any of the provisions
of this Agreement. The Corporation shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Rights Certificates purchased or acquired by the Corporation otherwise
than upon the exercise thereof. The Rights Agent shall deliver all cancelled
Rights Certificates to the Corporation, or shall, at the written request of the
Corporation, destroy such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Corporation.
Section 9. Reservation and Availability of Stock.
(a) The Corporation covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities), the
number of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) and shall cause the
Trust to reserve and keep available out of its authorized and unissued shares of
beneficial interest, following the occurrence of a Triggering Event, the number
of Class B Shares (or other securities) that, as provided in this Agreement,
including Section 11(a)(iii), will be sufficient to permit the exercise in full
of all outstanding Rights in accordance with the terms of this Agreement.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Units and/or other securities) issuable
and deliverable upon the exercise of the Rights may be listed on any national
securities exchange or The Nasdaq National Market (or any successor), the
Corporation shall use its best efforts to cause (and to cause the Trust to
cause), from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange or The Nasdaq National
Market (or any successor), upon official notice of issuance upon such exercise.
(c) The Corporation shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Corporation upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii), a registration statement under the Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the date of the expiration of the
Rights. The Corporation will also take such action as may be appropriate under,
or to ensure compliance with, the securities or "Blue Sky" laws of the various
states in connection with the exercisability of the Rights. The Corporation may
temporarily suspend, for a period of time not to exceed 90 days after the date
set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become
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effective. Upon any such suspension, the Corporation shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect (with prompt notice of any such announcements to the Rights
Agent). In addition, if following the Distribution Date the Corporation shall
determine that a registration statement is required in connection with the
exercise of the Rights, and a Section 11(a)(ii) Event has not occurred, the
Corporation may temporarily suspend the exercisability of Rights until such time
as the applicable registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification or
exemption in such jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law or an applicable
registration statement shall not have been declared effective, unless in any
such case the Corporation makes a public announcement to the contrary.
(d) The Corporation covenants and agrees that it will take all
such actions as may be necessary to ensure that all one one-thousandths of a
share of Preferred Stock (and, following the occurrence of a Triggering Event,
Units and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Corporation further covenants and agrees that it will
pay, when due and payable, any and all taxes and charges that may be payable in
respect of the issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-thousandths of a share of Preferred Stock
(or Units and/or other securities, as the case may be) upon the exercise of
Rights. The Corporation shall not, however, be required to pay any tax or charge
that may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a number of
one one-thousandths of a share of Preferred Stock (or Units and/or other
securities, as the case may be) in respect of a name other than that of, the
registered holder of the Rights Certificates representing Rights surrendered for
exercise or to issue or deliver any certificates for a number of one
one-thousandths of a share of Preferred Stock (or Units and/or other securities,
as the case may be) in a name other than that of the registered holder upon the
exercise of any Rights until such tax or charge shall have been paid (any such
tax or charge being payable by the holder of such Rights Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax or charge is due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for a number of one one-thousandths of a share of Preferred
Stock (or Units and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Units and/or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate representing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable taxes or charges) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock (or Units
and/or other securities, as the case may be) transfer books of the Corporation
(and the Trust or other Person, as the case may be) are closed, such Person
shall be deemed to have become the record holder of such shares (fractional or
otherwise) on, and such
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certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Units and/or other securities, as the case may be) transfer
books of the Corporation (and the Trust or other Person, as the case may be) are
open. Prior to the exercise of the Rights represented thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a stockholder of the
Corporation with respect to shares or other securities 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
Corporation, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Corporation shall at any time after
the date of this Agreement (A) declare and pay a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares or (D) issue any shares of its
stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Corporation is the continuing or surviving Corporation), except as
otherwise provided in this Section 11(a) and Section 7(e), the Purchase
Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock
or other stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares
of Preferred Stock or other stock, as the case may be, which, if such
Right had been exercised immediately prior to such date and at a time
when the Preferred Stock transfer books of the Corporation were open,
such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs that would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section
11(a)(ii).
(ii) Subject to Section 24, in the event any Person becomes an
Acquiring Person, then each holder of a Right (except as provided below
and in Section 7(e)) shall thereafter have the right to receive, upon
exercise thereof at a price equal to the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of one
one-thousandths of a share of Preferred Stock, such number of Units as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to
the first
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occurrence of a Section 11(a)(ii) Event and (y) dividing that product
(which, following such first occurrence shall thereafter be referred to
as the "Purchase Price" for each Right and for all purposes of this
Agreement, except as otherwise contemplated by Section 13(a)) by 50% of
the current market price (determined pursuant to Section 11(d)) per
Unit on the date of such first occurrence (such number of Units, the
"Adjustment Shares").
(iii) In the event that the number of shares of Common Stock
that are authorized by the Company's charter, but not outstanding or
reserved for issuance for purposes other than upon exercise of the
Rights, or the number of Class B Shares that are authorized by the
Trust's declaration of trust, as amended, but not outstanding or
reserved for issuance for purposes other than upon the exercise of the
Rights, is not sufficient to permit the exercise in full of the Rights
in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Corporation shall: (A) determine the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") and
(B) with respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Units or
other equity securities of the Corporation and/or the Trust (including,
without limitation, shares, or units of shares, of preferred stock,
such as the Preferred Stock, which the Board of Directors of the
Corporation has deemed to have substantially the same value or economic
rights as Units (such shares or units of preferred stock, "common stock
equivalents")), (4) debt securities of the Corporation, (5) other
assets, or (6) any combination of the foregoing, having an aggregate
value equal to the Current Value (less the amount of any reduction in
the Purchase Price), where such aggregate value has been determined by
the Board of Directors of the Corporation based upon the advice of a
nationally recognized investment banking firm selected by the Board of
Directors of the Corporation; provided, however, that if the
Corporation shall not have made adequate provision to deliver value
pursuant to clause (B) above within 30 days following the later of (x)
the first occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Corporation shall be
obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, Units (to the extent
available) and then, if necessary, cash, which Units and/or cash have
an aggregate value equal to the Spread. For purposes of the preceding
sentence, the term "Spread" shall mean the excess of (i) the Current
Value over (ii) the Purchase Price. If the Board of Directors of the
Corporation shall determine in good faith that it is likely that
sufficient additional Units could be authorized for issuance upon
exercise in full of the Rights, the 30-day period set forth above may
be extended to the extent necessary, but not more than 90 days after
the Section 11(a)(ii) Trigger Date, in order that the Corporation (and
the Trust, as the case may be) may seek stockholder (and shareholder,
as the case may be) approval for the authorization of such additional
Units (such 30-day period, as it may be
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extended, the "Substitution Period"). To the extent that action is to
be taken pursuant to the first and/or third sentences of this Section
11(a)(iii), the Corporation (x) shall provide, subject to Section 7(e),
that such action shall apply uniformly to all outstanding Rights and
(y) may suspend the exercisability of the Rights until the expiration
of the Substitution Period in order to seek such stockholder approval
(and to cause the Trust to seek shareholder approval) for such
authorization of additional Units and/or to decide the appropriate form
of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Corporation shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect (with prompt notice of any such announcements to the Rights
Agent). For purposes of this Section 11(a)(iii), the value of each
Adjustment Share shall be the current market price (as determined
pursuant to Section 11(d)) per Unit on the Section 11(a)(ii) Trigger
Date and the value of any "common stock equivalent" shall be deemed to
equal the current market price (as determined pursuant to Section
11(d)) per Unit on such date.
(b) In case the Corporation shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all holders
of Preferred Stock entitling them to subscribe for or purchase (for a period
expiring within 45 calendar days after such record date) Preferred Stock (or
shares having the same rights, privileges and preferences as the shares of
Preferred Stock ("equivalent preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per share of Preferred
Stock or per share of equivalent preferred stock (or having a conversion price
per share, if a security convertible into Preferred Stock or equivalent
preferred stock) less than the current market price (as determined pursuant to
Section 11(d)) per share of Preferred Stock on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock and/or
equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. Shares of Preferred Stock owned by or held for the account of the
Corporation shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed, and in the event that such rights, options or warrants are not so
issued, the Purchase Price
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shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Corporation shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Corporation is
the continuing Corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings of the
Corporation), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Corporation, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights) of the portion of the cash, assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the denominator of which shall be
such current market price (as determined pursuant to Section 11(d)) per share of
Preferred Stock. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such distribution is not so made,
the Purchase Price shall be adjusted to be the Purchase Price that would have
been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii), the "current
market price" per Unit or share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per Unit or share
of Common Stock, respectively, for the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to but not
including such date, and for purposes of computations made pursuant to
Section 11(a)(iii), the "current market price" per Unit or share of
Common Stock on any date shall be deemed to be the average of the daily
closing prices per Unit or share of Common Stock, respectively, for the
ten consecutive Trading Days immediately following but not including
such date; provided, however, that in the event that the current market
price per Unit or share of Common Stock is determined during a period
following the announcement by the Corporation or the Trust or other
issuer of such Common Stock of (A) in the case of the Units, a dividend
or distribution on the Common Stock or the Class B Shares comprising
such Units payable in shares of Common Stock or in Class B Shares,
respectively, or securities convertible into or exercisable for shares
of such Common Stock or Class B Shares (other than the Rights),
respectively, or in the case of the Common Stock of any other issuer, a
dividend or distribution on such Common Stock payable in shares of
Common Stock or securities convertible into or exercisable for shares
of such Common Stock, or (B) in the case of the Units, any subdivision,
combination or reclassification of the Common Stock or Class B Shares
comprising such Units, or in the case of the Common Stock of any other
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issuer, any subdivision, combination or reclassification of such Common
Stock, and the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification
shall not have occurred prior to the commencement of the requisite 30
Trading Day or ten Trading Day period, as set forth above, then, and in
each such case, the "current market price" shall be properly adjusted
to take into account any trading during the period prior to such
ex-dividend date or record date. The closing price for each day shall
be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Units or
shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Units or shares of
Common Stock are listed or admitted to trading or, if the Units or
shares of Common Stock 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 Units or shares
of Common Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in the Units or Common Stock selected by the
Board of Directors of the Corporation. If on any such date no market
maker is making a market in the Units or Common Stock, the fair value
of such shares on such date as determined in good faith by the Board of
Directors of the Corporation shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on
which the Units or shares of Common Stock are listed or admitted to
trading is open for the transaction of business or, if the Units or
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Units or shares of
Common Stock are not publicly held or not so listed or traded, "current
market price" per Unit or share of Common Stock shall mean the fair
value per Unit or share of Common Stock, respectively, as determined in
good faith by the Board of Directors of the Corporation, whose
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined
in the same manner as set forth above for the Units in clause (i) of
this Section 11(d) (other than the last sentence thereof). If the
current market price per share of Preferred Stock cannot be determined
in the manner provided above, or if the Preferred Stock is not publicly
held or listed or traded in a manner described in clause (i) of this
Section 11(d), the "current market price" per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 1000 (as such
number may be appropriately
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adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the securities comprising the Units
occurring after the date of this Agreement) multiplied by the current
market price per Unit. If neither the Units nor the Preferred Stock are
publicly held or so listed or traded, "current market price" per share
of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the Corporation,
whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. For all purposes of this Agreement, the "current market
price" of one one-thousandth of a share of Preferred Stock shall be
equal to the "current market price" of one share of Preferred Stock
divided by 1000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one ten-thousandth of a Unit
or other share or one one-millionth of a share of Preferred Stock, as the case
may be. Notwithstanding the provisos to the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction that mandates
such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k), (l) and (m), and the provisions of Sections
7, 9, 10, 13 and 14 with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Corporation subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-thousandths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Corporation shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one-thousandths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-thousandths
of a share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such
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adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Corporation may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-thousandths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Corporation shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made (with prompt
notice thereof to the Rights Agent). This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten days later than the date of
the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
representing, subject to Section 14, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Corporation, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Corporation, new Rights Certificates representing all the Rights to which such
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Corporation, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-thousandth of a share and the number of one one-thousandths of a share that
were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the number
of one one-thousandths of a share of Preferred Stock issuable upon exercise of
the Rights, the Corporation shall take any corporate action that may, in the
opinion of its counsel, be necessary in order that the Corporation may validly
and legally issue fully paid and nonassessable shares of Preferred Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Corporation may
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elect to defer adjustment (and shall provide the Rights Agent prompt notice of
such election) until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of one one-thousandths of
a share of Preferred Stock and other stock or securities, if any, issuable upon
such exercise over and above the number of one one-thousandths of a share of
Preferred Stock and other stock or securities, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Corporation shall deliver to such holder a due xxxx
or other appropriate instrument representing such holder's right to receive such
additional shares (fractional or otherwise) or securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Corporation shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that the Board of Directors of the Corporation,
in its good faith judgment, shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly
for cash of any shares of Preferred Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Preferred Stock or securities that
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11 hereafter made by the Corporation to holders of
its Preferred Stock, shall not be taxable to such stockholders.
(n) The Corporation covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Corporation in a transaction that complies with
Section 11(o)), (ii) merge with or into any other Person (other than a
Subsidiary of the Corporation in a transaction that complies with Section 11(o))
or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Corporation and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Corporation and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o)), if (x) at the time of or immediately
after such consolidation, merger, sale or transfer there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
that would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger, sale or transfer, the stockholders of the
Person that constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) shall have received a distribution of Rights previously owned
by such Person or any of its Affiliates or Associates.
(o) The Corporation covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 27,
take (or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action would diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) In the event that the Corporation shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare and pay a dividend on the
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outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or Section
13, the Corporation shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts and computations accounting for
such adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Stock and the Units, a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 26. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall have no duty with respect to and shall not be deemed to have
knowledge of such adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Corporation shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Corporation in a
transaction that complies with Section 11(o)), and the Corporation shall not be
the continuing or surviving Corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Corporation in a transaction that
complies with Section 11(o)) shall consolidate with, or merge with or into, the
Corporation, and the Corporation shall be the continuing or surviving
Corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Corporation shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Corporation or any Subsidiary of the Corporation in one or more
transactions each of which complies with Section 11(o)) (any event described in
clauses (x), (y) or (z) of this Section 13(a) following the Stock Acquisition
Date, a "Section 13 Event"), then, and in each such case, proper provision shall
be made so that: (i) each holder of a Right, except as provided in Section 7(e),
shall thereafter have the right to receive upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, in lieu
of a number of one one-thousandths
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of a share of Preferred Stock, such number of validly authorized and issued,
fully paid, nonassessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (l) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event (or,
if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of such one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes of this Agreement) by
(2) 50% of the current market price (determined pursuant to Section 11(d)(i))
per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Corporation pursuant to this Agreement;
(iii) the term "Corporation" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 shall apply only to such Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the authorization and reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) shall be of no effect following the
first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of Section 13(a), the Person that is the issuer of any securities
into which shares of Common Stock of the Corporation are converted in
such merger or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of
Section 13(a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (1) 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, "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stock of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
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(c) The Corporation shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Corporation and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger, sale or transfer of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights that have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in Section 11(p),
or to distribute Rights Certificates which represent fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported to the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading, or if the Rights
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average
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of the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Corporation. If on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Corporation shall be used.
(b) The Corporation shall not be required to issue fractions
of shares of Preferred Stock (other than fractions that are integral multiples
of one one-thousandth of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates that represent fractional shares of Preferred
Stock (other than fractions that are integral multiples of one one-thousandth of
a share of Preferred Stock). Fractions of shares of Preferred Stock in integral
multiples of one one-thousandth of a share may, at the election of the
Corporation, be represented by depositary receipts pursuant to an appropriate
agreement between the Corporation and a depositary selected by it; provided,
however, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the shares represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth of a share of Preferred Stock otherwise issuable
hereunder, the Corporation shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one
one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-thousandth of a share of Preferred
Stock shall be one one-thousandth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii)) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Corporation shall not be required to issue fractions of Units upon exercise of
the Rights or to distribute certificates that represent fractional Units. In
lieu of fractional Units otherwise issuable hereunder, the Corporation shall pay
to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Unit. For purposes of this Section 14(c), the
current market value of one Unit shall be the closing price of one Unit (as
determined pursuant to Section 11(d)(i)) for the Trading Day immediately prior
to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this Section
14.
Section 15. Rights of Action. All rights of action in respect
of this Agreement, other than rights of action vested in the Rights Agent
pursuant to the terms of this Agreement, are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any registered holder 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 such holder's
own behalf and for such holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Corporation to enforce,
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or otherwise act in respect of, such holder's right to exercise the Rights
represented by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Corporation and the
Rights Agent and with every holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer 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
purposes, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates fully
executed;
(c) subject to Section 6(a) and Section 7(f), the Corporation
and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof
and of the Rights represented thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated
Common Stock certificates made by anyone other than the Corporation or
the Rights Agent) for all purposes whatsoever, and neither the
Corporation nor the Rights Agent shall be required to be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Corporation nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree, judgment 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 Corporation must use reasonable efforts to have any such
order, decree, judgment or ruling lifted or otherwise overturned as
soon as possible.
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
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purpose to be the holder of the number of one one-thousandths of a share of
Preferred Stock or any other securities of the Corporation which may at any time
be issuable upon 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 Corporation or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in Section
25), or to receive dividends or subscription rights, or otherwise, until the
Right or Rights represented by such Rights Certificate shall have been exercised
in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and disbursements and other disbursements incurred in the preparation, delivery,
amendment and execution of this Agreement and the exercise and performance of
its duties hereunder. The Corporation also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, damage, judgment,
fine, penalty, claim, demand, settlement, cost or expense incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent for
any action taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including without limitation
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly. The indemnity provided herein shall survive
the termination of this Agreement and the termination and expiration of the
Rights. The costs and expenses incurred by the Rights Agent in enforcing this
indemnification shall be paid by the Corporation. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage.
(b) The Rights Agent shall be authorized and protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its acceptance and administration of this
Agreement in reliance upon any Rights Certificate or certificate for Common
Stock or for other securities of the Corporation and/or of the Trust, 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 executed and, where necessary, verified
or acknowledged, by the proper Person or Persons, or otherwise upon the advice
of counsel as set forth in Section 20.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor
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Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at the time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) 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; and in
case, at that time, any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes only the duties and obligations expressly imposed by this Agreement
upon the following terms and conditions, by all of which the Corporation 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 Corporation), and the written advice or
opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted by
it in good faith and in accordance with such written advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be
proved or established by the Corporation prior to taking, omitting 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 Chief Executive Officer, the
President, any Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Corporation and
delivered to the Rights Agent; and such certificate shall be full
authorization and protection to the Rights Agent, and the Rights Agent
shall incur no liability for or in respect of any action taken,
suffered or omitted by it in good faith under the provisions of this
Agreement in reliance upon such certificate.
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(c) The Rights Agent shall be liable hereunder to the
Corporation and any other Person only for its own gross negligence, bad
faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates or be required to verify the same (except
as to its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made by
the Corporation only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Corporation of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any change in the exercisability of the
Rights (including the Rights becoming null and void pursuant to Section
7(e) hereof) or any adjustment required under the provisions of Section
3, Section 11, Section 13, Section 23 or Section 24 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 represented by Rights
Certificates after actual notice of any such adjustment); nor shall it
by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Units or shares of
Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Units or shares of Preferred Stock
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Corporation,
and to apply to such officers for advice or instructions in connection
with its duties, and it shall incur no liability for or in respect of
any action taken, suffered or omitted by it in good faith in accordance
with instructions of any such officer, or for any delay in acting while
waiting for those instructions. Any application by the Rights Agent for
written instructions from the Corporation may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken,
suffered or omitted by the Rights Agent under
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this Agreement and the date on and/or after which such action shall be
taken or suffered or such omission shall be effective. The Rights Agent
shall not be liable for any action taken or suffered by, or omission
of, the Rights Agent in accordance with a proposal included in such
application on or after the date specified in such application (which
date shall not be less than five Business Days after the date the
Corporation actually receives such application sent pursuant to Section
26, unless the Corporation shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the
action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, director, Affiliate,
officer or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Corporation or become pecuniarily
interested in any transaction in which the Corporation may be
interested, or contract with or lend money to the Corporation or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Corporation or for any other
Person.
(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 Corporation resulting from any such act, default, neglect or
misconduct absent gross negligence, bad faith or willful misconduct in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if it believes that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has not been completed to certify by the person executing such
certificate that (i) the Rights Certificate is not being sold, assigned
or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person and (ii)
after due inquiry and to the best knowledge of the person signing such
certificate, it did not acquire the Rights represented by the Rights
Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the
Corporation.
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Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Corporation, and to each
transfer agent of the Units and Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. The
Corporation may remove the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Units and Preferred Stock,
by registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Corporation shall appoint a successor
to the Rights Agent. If the Corporation shall fail to make such appointment
within a period of 30 days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit such holder's Rights Certificate for inspection by the
Corporation), then any registered holder 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 Corporation or by such a
court, shall be (i) a Person organized and doing business under the laws of the
United States or of the State of Maryland or the State of New York (or of any
other state of the United States or of the District of Columbia so long as such
Person is authorized to do business in the State of Maryland or the State of New
York), in good standing, having an office or agency in the State of Maryland or
the State of New York, which is authorized under such laws to exercise stock
transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (ii) an Affiliate of
such Person. 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 reasonable assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the Corporation shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Units and the Preferred Stock, and send by first-class
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 or any
defect therein shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Corporation may, at its option, issue new Rights Certificates
representing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Units following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Corporation (a) shall, with respect to Units so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, granted or
awarded prior to the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by
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the Corporation, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Corporation, issue Rights
Certificates representing an appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Corporation shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Corporation or the Person to whom such Rights
Certificate would be issued and (ii) no such Rights Certificate shall be issued
if, and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Corporation may, at its
option, at any time prior to the earlier of (i) the Close of Business on the
tenth day following the Stock Acquisition Date (or, if the Stock Acquisition
Date shall have occurred prior to the Record Date, the Close of Business on the
tenth day following the Record Date) or (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price of
$.01 per Right, as such amount may be appropriately adjusted by the Board of
Directors of the Corporation to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as the
Corporation's right of redemption hereunder has expired. The Corporation may, at
its option, pay the Redemption Price in cash, Units (based on the "current
market price", as defined in Section 11(d)(i), of the Units at the time of
redemption) or any other form of consideration deemed appropriate by its Board
of Directors. The redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions such Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of
the Corporation ordering the redemption of the Rights, evidence of which shall
have been filed with the Rights Agent and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of Directors of the
Corporation ordering the redemption of the Rights, the Corporation shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Units; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such redemption. Any notice that is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be effected.
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Section 24. Exchange.
(a) The Board of Directors of the Corporation may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to the provisions of Section
7(e)) for Units at an exchange ratio of one Unit per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors of the Corporation shall not be empowered to effect such exchange at
any time after any Person (other than the Corporation, any Subsidiary of the
Corporation, any employee benefit plan of the Corporation or of any Subsidiary
of the Corporation, or any Person organized, appointed or established by the
Corporation for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Corporation ordering the exchange of any Rights pursuant to subsection (a)
of this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of a
holder of any such Rights shall be to receive that number of Units equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Corporation shall promptly give public notice (with prompt notice thereof to the
Rights Agent) of any exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange. The
Corporation promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice that is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
Units for Rights will be effected and, in the event of any partial exchange, the
number of Rights that will be exchanged. Any partial exchange will be effected
pro rata based on the number of Rights (other than Rights that have become null
and void pursuant to the provisions of Section 7(e)) held by each holder of
Rights.
(c) In any exchange pursuant to this Section 24, the
Corporation, at its option, may substitute shares of Preferred Stock (or
equivalent preferred stock, as such term is defined in paragraph (b) of Section
11) for Units exchangeable for Rights, at the initial rate of one one-thousandth
of a share of Preferred Stock (or equivalent preferred stock) for each Unit, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Stock pursuant to the terms thereof, so that the fraction of a share
of Preferred Stock delivered in lieu of each Unit shall have the same voting
rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of
Common Stock or Class B Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Corporation shall take all such actions as may be necessary
to authorize additional shares of Common Stock, and to cause the Trust to
authorize additional Class B Shares, for issuance upon exchange of the Rights.
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(e) The Corporation shall not be required to issue fractions
of Units or to distribute certificates that represent fractional Units. In lieu
of such fractional Units, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Units would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Unit. For the purposes of this subsection (e), the current
market value of a whole Unit shall be the closing price of a Unit (as determined
pursuant to the second sentence of Section 11(d)(i)) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Corporation shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the holders
of Preferred Stock (other than a regular quarterly cash dividend out of earnings
or retained earnings of the Corporation), (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Corporation
in a transaction that complies with Section 11(o)), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Corporation and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o)) or (v) to effect the liquidation, dissolution
or winding up of the Corporation, then, in each such case, the Corporation shall
give to the Rights Agent and to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of 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 20 days prior to the record date for
determining holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock, whichever shall be the earlier.
(b) In case a Section 11(a)(ii) Event shall occur, then, in
any such case, (i) the Corporation shall as soon as practicable thereafter give
to each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 26, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii), and (ii) all references in the preceding paragraph to Preferred Stock
shall be deemed thereafter to refer to Units and/or, if appropriate, other
securities.
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Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Corporation 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:
Starwood Hotels & Resorts Worldwide, Inc.
000 Xxxxxxxxxxx Xxx.
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Corporation or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Corporation) as follows:
ChaseMellon Shareholder Services, L.L.C.
000 Xxxxx Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) 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 Corporation.
Section 27. Supplements and Amendments. The Corporation may
from time to time supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein that may be defective or inconsistent
with any other provision herein, or to make any other provisions with respect to
the Rights that the Corporation may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by the Corporation
and the Rights Agent; provided, however, that from and after such time as any
Person becomes an Acquiring Person, this Agreement shall not be amended in any
manner that would adversely affect the interests of the holders of Rights, and
further provided that the Rights Agent is not obligated to enter into any such
supplement or amendment that would change or increase the duties, liabilities or
obligations of the Rights Agent hereunder. Prior to the Distribution Date, the
interest of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Corporation or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
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Section 29. Determination and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(l)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Directors of the
Corporation shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors of the Corporation or to the Corporation, 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, but not limited to, a determination
to redeem or not redeem the Rights or to amend this Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors of the Corporation in good faith
shall (x) be final, conclusive and binding on the Corporation, the Rights Agent,
the holders of the Rights and all other Persons, and (y) not subject the Board
of Directors of the Corporation to any liability to the holders of the Rights or
any other Person. The Rights Agent is entitled to always assume that the Board
of Directors of the Corporation acted in good faith and shall be fully protected
and incur no liability in reliance thereon.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Corporation,
the Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, registered holders of the Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Corporation, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Corporation determines in its good faith judgment that severing
the invalid language from this Agreement would materially adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in
Section 23 shall be reinstated and shall not expire until the Close of Business
on the tenth day following the date of such determination by the Board of
Directors of the Corporation.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Maryland and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State; provided,
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however, that the rights, privileges, protections and immunities of the Rights
Agent pursuant to Section 18, Section 19, Section 20 and Section 21 shall be
governed by and construed in accordance with the laws of the State of New York.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof. Section references herein are to the several Sections of this Agreement
unless otherwise specified.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Attest: STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------- -------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President Title: President and Chief Operating
and General Counsel Officer
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/ Xxxxxx Lug By: /s/ Xxxxxx Xxxxxxx
------------------------------- -------------------------------
Name: Xxxxxx Lug Name: Xxxxxx Xxxxxxx
Title: Vice President Title: Assistant Vice President
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Exhibit A
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
ARTICLES SUPPLEMENTARY
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Starwood Hotels & Resorts Worldwide, Inc., a Maryland
corporation (the "Corporation"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:
FIRST: Under a power contained in Article FIFTH of the charter
of the Corporation (the "Charter") in accordance with Section 2-208 of the
Maryland General Corporation Law (the "MGCL"), the Board of Directors of the
Corporation (the "Board of Directors"), by resolution duly adopted at a meeting
duly called and held, classified and designated 1,000,000 shares (the "Shares")
of Preferred Stock of the Corporation, par value $.01 per share, as shares of
Series A Junior Participating Preferred Stock of the Corporation, par value $.01
per share (the "Series A Preferred Stock"), with the preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption as follows,
which upon any restatement of the Charter shall be made part of Article FIFTH of
the Charter, with any necessary or appropriate changes to the enumeration or
lettering of the provisions thereof (all capitalized terms used herein that are
defined in the Charter shall be deemed to have the meanings provided therein):
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" and the
number of shares constituting such series shall be 1,000,000. Such number of
shares may be increased or decreased by resolution of the Board of Directors and
filing of articles supplementary in accordance with the MGCL stating that such
increase or decrease has been so authorized; provided, however, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares of Series A Preferred Stock then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon conversion of any outstanding securities issued by
the Corporation convertible into shares of Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Preferred Stock with respect to dividends, the holders of
shares of Series A Preferred Stock shall be entitled to receive, when, as and if
authorized by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first business day of March,
June, September
43
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $.01 or (b) subject to the provisions for adjustment
hereinafter set forth, (i) 1000 times the aggregate per share amount of all cash
dividends, and 1000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
shares of common stock, par value $.01 per share, of the Corporation (the
"Common Stock") or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock, plus (ii) 1000 times the
aggregate per share amount of all cash dividends, and 1000 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in Class B Shares of beneficial
interest, par value $.01 per share, of Starwood Hotels & Resorts, a Maryland
real estate investment trust, or any successor (the "Trust"), or any shares of
beneficial interest in the Trust into which such Class B Shares may be changed
(such Class B Shares and any such shares into which such Class B Shares are
changed being herein referred to as the "Class B Shares") or a subdivision of
the outstanding Class B Shares (by reclassification or otherwise), declared on
the Class B Shares since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Preferred Stock.
In the event the Corporation shall at any time after March 15, 1999 (the "Rights
Declaration Date") (x) declare any dividend on Common Stock payable in shares of
Common Stock, (y) subdivide the outstanding Common Stock or (z) combine the
outstanding Common Stock into a smaller number of shares, then in each case the
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b)(i) of the next preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event. In
the event the Trust shall at any time after the Rights Declaration Date (X)
declare any dividend on the Class B Shares payable in Class B Shares, (Y)
subdivide the outstanding Class B Shares or (Z) combine the outstanding Class B
Shares into a smaller number of shares, then in each case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under clause (b)(ii) of the second preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of Class B Shares outstanding immediately after such event and the
denominator of which is the number of Class B Shares that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock) or the Trust declares a dividend or
distribution on the Class B Shares (other than a dividend payable in Class B
Shares); provided, however, that, in the event no dividend or distribution shall
have been declared on the Common Stock or the Class B Shares during the period
between any
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44
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior to and superior to the
shares of Series A Preferred Stock with respect to dividends, a dividend of $.01
per share on the Series A Preferred Stock shall nevertheless by payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights.
The holders of shares of Series A Preferred Stock shall have
the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 1000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare and pay any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock shall vote
collectively as one class on all matters submitted to a vote of stockholders of
the Corporation.
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(C) (i) If at any time dividends on any Series A Preferred
Stock shall be in arrears in an amount equal to six quarterly dividends
thereon, the occurrence of such contingency shall xxxx the beginning of
a period (herein called a "default period") which shall extend until
such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend
period on all shares of Series A Preferred Stock then outstanding shall
have been declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock (including holders of
the Series A Preferred Stock) with dividends in arrears in an amount
equal to six quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two Directors.
(ii) During any default period, such voting right of the
holders of Series A Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section
3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that such voting right shall not be
exercised unless the holders of 10% in number of shares of Preferred
Stock outstanding shall be present in person or by proxy. The absence
of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting rights. At
any meeting at which the holders of Preferred Stock shall exercise such
voting rights initially during an existing default period, they shall
have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to
two Directors or, if such right is exercised at an annual meeting, to
elect two Directors. If the number which may be so elected at any
special meeting does not amount to the required number, the holders of
the Preferred Stock shall have the right to make such increase in the
number of Directors as shall be necessary to permit the election by
them of the required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any default
period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the rights
of any equity securities ranking senior to or pari passu with the
Series A Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than 10% of the total
number of shares of Preferred Stock outstanding, irrespective of
series, may request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by the
Chairman of the Board, the Chief Executive Officer, the President, a
Vice President or the Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Preferred Stock
are entitled to vote pursuant to this paragraph (C)(iii) shall be given
to each holder of record of Preferred Stock by mailing a copy of such
notice to him or her at his or her last address as the same appears on
the books of the Corporation. Such meeting shall be called for a time
not earlier than 10 days and not later than 50 days after such order or
request, or in default of the calling of such meeting within 50 days
after such order or request, such meeting may be called on similar
notice by any stockholder or stockholders owning in the aggregate not
less than 10% of the total number of shares of Preferred Stock
outstanding.
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46
Notwithstanding the provisions of this paragraph (C)(iii), no such
special meeting shall be called during the period within 50 days
immediately preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders of Common Stock, and,
if applicable, other classes of stock of the Corporation, shall
continue to be entitled to elect the whole number of Directors until
the holders of Preferred Stock shall have exercised their right, voting
as a class, to elect two Directors, after the exercise of which right
(x) the Directors so elected by the holders of Preferred Stock shall
continue in office until their successors shall have been elected by
such holders or until the expiration of the default period and (y) any
vacancy in the Board of Directors may (except as provided in paragraph
(C)(ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of
stock that elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the holders of
a particular class of stock shall include Directors appointed by such
Directors to fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the
holders of Preferred Stock as a class shall terminate and (z) the
number of Directors shall be such number as may be provided for in the
Charter or by-laws irrespective of any increase made pursuant to the
provisions of paragraph (C)(ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law or
in the Charter or by-laws). Any vacancies in the Board of Directors
effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action (including any merger
or any issuance of Preferred Stock senior in right of payment or otherwise to
the Series A Preferred Stock).
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation 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;
A-5
47
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares.
Any shares of Series A Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation (a "Liquidation Event"), no distribution shall
be made to the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock shall
have received the sum (the "Series A Liquidation Preference") of (a) $1000 per
share, plus (b) an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not
A-6
48
declared, to the date of such payment, plus (c) an amount equal to the fair
market value (as determined in good faith by the Board of Directors) as of such
date of all securities (or fractions thereof) then attached to a share of Common
Stock for purposes of the Amended and Restated Intercompany Agreement dated as
of January 6, 1999, between the Corporation and the Trust, as amended from time
to time. Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Series A Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the sum of (X) $1000 per share
plus (Y) an amount equal to accrued and unpaid dividends and distributions on
the Series A Preferred Stock, whether or not declared, to the date of payment of
the Series A Liquidation Preference by (ii) 1000 (as appropriately adjusted as
set forth in subparagraph (C) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number"). Following the payment of the
full amount of the Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Preferred Stock and Common Stock,
respectively, and the payment of liquidation preferences of all other shares of
stock which rank prior to or on a parity with Series A Preferred Stock, holders
of Series A Preferred Stock and holders of shares of Common Stock shall receive
their ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock
and Common Stock, on a per share basis, respectively. In determining whether a
distribution (other than upon the occurrence of a Liquidation Event), by
dividend, redemption or other acquisition of shares of stock of the Corporation
or otherwise, is permitted under Maryland law, amounts that would be needed, if
the Corporation were to be dissolved at the time of the distribution, to satisfy
the preferential rights upon dissolution of the holders of the Series A
Preferred Stock whose preferential rights upon dissolution are senior to those
receiving the distribution shall not be added to the Corporation's total
liabilities.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare and pay any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
A-7
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Section 7. Consolidation, Merger, etc.
In case the Corporation 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 share of Series A Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 1000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, that would be held or receivable upon the
consummation of such consolidation, merger, combination or other transaction by
a holder of a Unit. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare and pay any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption.
The shares of Series A Preferred Stock shall not be
redeemable.
Section 9. Ranking.
The Series A Preferred Stock shall rank junior to all other
series of the Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, whether or not upon the dissolution, liquidation or
winding up of the Corporation, unless the terms of any such series shall provide
otherwise.
Section 10. Amendment.
The Charter shall not be amended in any manner that would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock, as set forth herein, so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares.
Series A Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A
Preferred Stock.
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50
SECOND: The Shares have been classified and designated by the
Board of Directors under the authority contained in the Charter.
THIRD: These Articles Supplementary have been approved by the
Board of Directors in the manner and by the vote required by law.
FOURTH: The undersigned of the Corporation
acknowledges these Articles Supplementary to be the corporate act of the
Corporation and, as to all matters or facts required to be verified under oath,
the undersigned acknowledges that to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.
IN WITNESS WHEREOF, Starwood Hotels & Resorts Worldwide, Inc.
has caused its corporate seal to be hereunto affixed and these Articles
Supplementary to be signed by its [ ], and the same to be attested
to by its [ ], this [ ]th day of [ ], 1999.
STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
By:
------------------------------
Name:
Title:
(Corporate Seal)
Attest:
------------------------------
A-9
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Exhibit B
[Form of Rights Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER APRIL 5, 2009 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
CORPORATION, AT $.01 PER RIGHT, AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.]*
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
52
Rights Certificate
STARWOOD HOTELS & RESORTS WORLDWIDE, 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 March 15, 1999 (the "Rights Agreement"),
between Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation (the
"Corporation"), and ChaseMellon Shareholder Services, L.L.C., a New Jersey
limited liability company, as Rights Agent (the "Rights Agent"), to purchase
from the Corporation at any time prior to 5:00 P.M. (New York City time) on
April 5, 2009 at the office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-thousandth of a fully paid,
nonassessable share of Series A Junior Participating Preferred Stock, par value
$.01 per share (the "Preferred Stock"), of the Corporation, at a purchase price
of $125 per one one-thousandth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase and related Certificate duly executed. The number of Rights
represented by this Rights Certificate (and the number of shares that may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of March 15, 1999,
based on the Preferred Stock as constituted at such date. The Corporation
reserves the right to require prior to the occurrence of a Triggering Event (as
such term is defined in the Rights Agreement) that, upon any exercise of Rights,
a number of Rights be exercised so that only whole shares of Preferred Stock
will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Rights represented by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person or an Affiliate or Associate of such Person, such Rights shall
become null and void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities that may be
purchased upon the exercise of the Rights represented by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Corporation and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific
B-2
53
circumstances set forth in the Rights Agreement. Copies of the Rights Agreement
are on file at the above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date representing Rights
entitling the holder to purchase a like aggregate number of one one-thousandths
of a share of Preferred Stock as the Rights represented by the 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
represented by this Certificate may, in each case at the option of the
Corporation, be (i) redeemed by the Corporation at its option at a redemption
price of $.01 per Right or (ii) exchanged in whole or in part for shares of
common stock, par value $.01 per share, of the Corporation and Class B Shares of
beneficial interest, par value $.01 per share, of Starwood Hotels & Resorts, a
Maryland real estate investment trust (the "Trust" and, together with the
Corporation, "Starwood Hotels"), or other securities of Starwood Hotels.
Immediately upon the action of the Board of Directors of the Corporation
authorizing redemption, the Rights will terminate and the only right of the
holders of Rights will be to receive the redemption price.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights represented hereby (other than fractions
that are integral multiples of one one-thousandth of a share of Preferred Stock,
which may, at the election of the Corporation, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Corporation that may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Corporation or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights represented 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 manually or by facsimile
signature by the Rights Agent.
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54
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
Dated as of _______ __, ____
ATTEST: STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
____________________________ By:____________________________
Secretary Name:
Title:
Countersigned:
ChaseMellon Shareholder Services, L.L.C.
By:____________________________
Name:
Title:
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55
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Rights
Certificate.)
FOR VALUE RECEIVED _____________________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all 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
Corporation, with full power of substitution.
Dated: ___________________, _______________________________________
Signature
Signature Guaranteed:
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 Affiliate or Associate of an Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights represented by
this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: ___________________, _______________________________________
Signature
Signature Guaranteed:
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56
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.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by
the Rights Certificate.)
TO: STARWOOD HOTELS & RESORTS WORLDWIDE, 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 the Rights (or such other
securities of the Corporation or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares (or
other securities) be issued in the name of and delivered to:
Please insert social security
or other identifying number: ______________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights
represented by this Rights Certificate, a new Rights Certificate for the balance
of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number: ______________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: _______________, __________________________________________
Signature
Signature Guaranteed:
B-6
57
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights represented by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights represented by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ________________, _________________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
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Exhibit C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On March 15, 1999, Starwood Hotels & Resorts Worldwide, Inc.
(the "Corporation") declared a dividend distribution of one Right for each
outstanding share of the Company's common stock, par value $.01 per share
("Common Stock"), to stockholders of record at the Close of Business on April 5,
1999. Each Right entitles the registered holder to purchase from the Corporation
one one-thousandth of a share (a "Preferred Fraction") of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred Stock"),
at a Purchase Price of $125 per Preferred Fraction, subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated as
of March 15, 1999 (the "Rights Agreement"), between the Corporation and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
certificates will be distributed. The Rights will separate from the Common Stock
and the Distribution Date will occur upon the earlier of (i) 10 days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date") or (ii) 10 business days (or such later date as
may be determined by action of the Board of Directors prior to such time as any
person or group becomes an Acquiring Person) following the commencement of a
tender offer or exchange offer which, if consummated, would result in a person
or group beneficially owning 15% or more of the outstanding shares of Common
Stock.
Until the Distribution Date, (i) the Rights will be
represented by the Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (ii) new Common Stock certificates
issued after April 5, 1999, will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any certificates
for Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
Pursuant to the Rights Agreement, the Corporation reserves the
right to require prior to the occurrence of a Triggering Event (as defined
below) that, upon any exercise of Rights, a number of Rights be exercised so
that only whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and
will expire at the Close of Business on April 5, 2009, unless earlier redeemed
by the Corporation as described below.
As soon as practicable after the Distribution Date, Rights
certificates will be mailed to holders of record of the Common Stock as of the
Close of Business on the Distribution Date
59
and, thereafter, the separate Rights certificates alone will represent the
Rights. Except as otherwise provided in the Rights Agreement, only shares of
Common Stock issued prior to the Distribution Date will be issued with Rights.
In the event that, at any time following the Distribution
Date, a person or group becomes an Acquiring Person, each holder of a Right will
thereafter have the right to receive, upon exercise, units ("Units") each such
Unit consisting of one share of Common Stock and one Class B Share of beneficial
interest, par value $.01 per share, of Starwood Hotels & Resorts, a Maryland
real estate investment trust, having a value equal to two times the exercise
price of the Right. If an insufficient number of Units is authorized for
issuance, then the Board would be required to substitute cash, property or other
securities of the Corporation for the Units. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this paragraph,
all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person (or by certain
related parties) will be null and void. However, Rights are not exercisable
following the occurrence of the event set forth in this paragraph until such
time as the Rights are no longer redeemable by the Corporation as set forth
below.
For example, at an exercise price of $125 per Right, each
Right not owned by an Acquiring Person (or by certain related parties) following
an event set forth in the preceding paragraph would entitle its holder to
purchase $250 worth of Units (or other consideration, as noted above) for $125.
Assuming that each Unit had a value of $50 at such time, the holder of each
valid Right would be entitled to purchase 5 Units for $125.
In the event that, at any time following the Stock Acquisition
Date, (i) the Corporation is acquired in a merger or other business combination
transaction in which the Corporation is not the surviving corporation, (ii) the
Corporation is acquired in a merger or other business combination transaction in
which the Corporation is the surviving corporation and all or part of the Common
Stock is converted into securities of another entity, cash or other property or
(iii) 50% or more of the Corporation's assets or earning power is sold or
transferred, each holder of a Right (except Rights that previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the exercise price of the Right. The events set forth in this paragraph
and in the second preceding paragraph are referred to as the "Triggering
Events."
The purchase price payable, and the number of Preferred
Fractions or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or reclassification of,
the Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights, options or warrants to subscribe for Preferred Stock or convertible
securities at less than the current market price of the Preferred Stock or (iii)
upon the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
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With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Preferred Fractions will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading day prior to the date of exercise.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding shares of Common Stock, the Corporation may exchange the Rights
(other than Rights owned by such person or group, which will have become void),
in whole or in part, at an exchange ratio of one Unit, or one one-thousandth of
a share of Preferred Stock (or of a share of a class or series of the
Corporation's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
In general, the Corporation may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (subject to adjustment and payable
in cash, Units or other consideration deemed appropriate by the Board of
Directors) at any time until ten days following the Stock Acquisition Date.
Immediately upon the action of the Board of Directors authorizing any
redemption, the Rights will terminate and the only right of the holders of
Rights will be to receive the redemption price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not result in the recognition of taxable income by stockholders
or the Corporation, stockholders may, depending upon the circumstances,
recognize taxable income after a Triggering Event.
The terms of the Rights may be amended by the Board of
Directors of the Corporation without the consent of the holders of the Rights,
except that from and after such time as any person or group of affiliated or
associated persons becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
A copy of the Rights Agreement is available free of charge
from the Rights Agent. This description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
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