Exhibit 4.1
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UNION ACCEPTANCE CORPORATION
and
COMPUTERSHARE INVESTOR SERVICES, LLC
Rights Agent
RIGHTS AGREEMENT
Dated as of November 13, 2001
TABLE OF CONTENTS
Page
Section 1. Certain definitions -1-
Section 2. Appointment of Rights Agent -8-
Section 3. Issue of Right Certificates -8-
Section 4. Form of Right Certificates -11-
Section 5. Countersignature and Registration -11-
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates -12-
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights -14-
Section 8. Cancellation and Destruction of Right Certificates -16-
Section 9. Availability of Common Shares -16-
Section 10. Common Shares Record Date -18-
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights -19-
Section 12. Certificate of Adjusted Purchase Price or Number of Shares -34-
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power -34-
Section 14. Fractional Rights and Fractional Shares -39-
Section 15. Rights of Action -40-
Section 16. Agreement of Right Holders -41-
Section 17. Right Certificate Holder Not Deemed a Shareholder -42-
Section 18. Concerning the Rights Agent -42-
Section 19. Merger or Consolidation or Change of Name of Rights Agent -43-
Section 20. Duties of Rights Agent -44-
Section 21. Change of Rights Agent -48-
Section 22. Issuance of New Right Certificates -49-
Section 23. Redemption -50-
Section 24. Exchange -52-
Section 25. Notice of Certain Events -54-
Section 26. Notices -55-
Section 27. Supplements and Amendments -57-
Section 28. Successors -58-
Section 29. Benefits of this Agreement -58-
Section 30. Severability -58-
Section 31. Governing Law -59-
Section 32. Counterparts -59-
Section 33. Descriptive Headings -59-
RIGHTS AGREEMENT
This AGREEMENT, dated as of November 13, 2001, between Union Acceptance
Corporation, an Indiana corporation (the "Corporation"), and Computershare
Investor Services, LLC, a Delaware limited liability company, (the "Rights
Agent").
WHEREAS, the Board of Directors of the Corporation has authorized and
declared a dividend distribution of one Common Share Purchase Right (hereinafter
referred to as a "Right") for each Common Share (as hereinafter defined) of the
Corporation outstanding and held of record as of the Close of Business (as
hereinafter defined) on December 1, 2001 (the "Record Date"), each Right
representing the right to purchase one share of Common Stock of the Corporation
upon the terms and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to each share of
Common Stock that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean (i) any Person (other than the
Corporation or any Related Person), who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 20% or more of the
Common Shares then outstanding or 20% or more of the voting power of the Common
Shares then outstanding, or (ii) any Adverse Person; provided, however, that a
Person shall not be deemed to have become an Acquiring Person solely as a result
of a reduction in the number of Common Shares outstanding, unless subsequent to
such reduction such Person or any Affiliate or Associate of such Person shall
become the Beneficial Owner of any additional Common Shares (other than as a
result of a stock dividend, stock split or similar transaction effected by the
Corporation in which all shareholders are treated equally); provided, further,
that a Person shall not be deemed to be an Acquiring Person solely by virtue of
being Beneficial Owner of 20% or more of the Common Shares outstanding on the
Record Date or 20% or more of the combined voting power in the election of
directors of the Common Shares outstanding on the Record Date unless subsequent
to the Record Date such Person shall become the Beneficial Owner of additional
Common Shares representing at least 1% of the Common Shares outstanding or 1% of
the combined voting power in the election of directors of the Common Shares
outstanding (other than as a result of a stock dividend, stock split or similar
transaction affected by the Corporation in which all shareholders are treated
equally).
(b) "Adverse Person" shall mean any Person declared to be an Adverse Person
by the Board of Directors upon (i) a determination by the Board of Directors, at
any time after the date of this Agreement, that such Person, alone or together
with its Affiliates and Associates, has become, or has announced an intention to
become, in one or more transactions, the Beneficial Owner of a number of Common
Shares which the Board of Directors determines to be substantial (which amount
shall in no event be less than the lesser of 10% of the Common Shares then
outstanding or 10% of the combined voting power in the election of directors of
the Common Shares then outstanding) and (ii) a determination by at least a
majority of the Board of Directors who are not officers of the Corporation,
after reasonable inquiry and investigation, including consultation with such
persons as such directors shall deem appropriate, that (A) such Beneficial
Ownership by such Person (1) is intended to cause the Corporation to repurchase
the Common Shares beneficially owned by such Person, (2) is intended or may
reasonably be anticipated to cause pressure on the Corporation to take action or
enter into a transaction or series of transactions to provide such Person with
short-term financial gain under circumstances in which the Board of Directors
determines that the best long-term interests of the Corporation and its
shareholders would not be served by taking such action or entering into such
transactions or series of transactions at that time, or (3) is intended or may
reasonably be anticipated to permit such Person to acquire control of or a
controlling influence over the Corporation, as a result of such Beneficial
Ownership or one or more subsequent actions or transactions, in a manner or
pursuant to one or more actions or transactions that the Board determines to be
unfair or coercive to shareholders, or (B) such Beneficial Ownership is causing
or may reasonably be anticipated to cause a material adverse impact on the
business, financial condition or prospects of the Corporation (including,
without limitation, the Corporation's ability to maintain its competitive
position).
(c) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date of this Agreement.
(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
beneficially owns, directly or indirectly,
(ii) which such person or any of such person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered pursuant
to a tender or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote or dispose of
pursuant to any agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2)
is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report) regardless whether the person were then
required to file such schedule; or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by
the proviso to Section 1(d)(ii)(B)) hereof or disposing of any securities
of the Corporation; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, any security if such
beneficial ownership arises solely as a result of such Person's status as a
"clearing agency," as defined in Section 3(a)(23) of the Exchange Act.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Corporation, shall mean
the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which
such Person would be deemed to own beneficially hereunder.
(e) "Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which the New York Stock Exchange or banking institutions in the State of
Indiana or Illinois are authorized or obligated by law or executive order to
close.
(f) "Close of Business" on any given date shall mean 5:00 P.M., eastern
standard time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., eastern standard time, on the next
succeeding Business Day.
(g) "Common Shares" when used with reference to the Corporation shall mean
the shares of Common Stock, without par value, of the Corporation. "Common
Shares" when used with reference to any Person other than the Corporation
(including an Issuer as defined in Section 13 hereof) shall mean the capital
stock or equity security with the greatest voting power of such other Person.
"Common Shares" when used with reference to Common Shares issuable upon the
exercise of Rights or issuable in exchange for Rights pursuant to Section 24
hereof shall mean the shares of Common Stock, without par value, of the
Corporation.
(h) "Distribution Date" shall mean the earlier of (i) the Close of Business
on the tenth calendar day after the Share Acquisition 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 prior to such time as any person becomes an
Acquiring Person) after the date of the commencement by any Person (other than
the Corporation or any Related Person), or of the first public announcement of
the intention of any Person (other than the Corporation or any Related Person),
to commence a tender or exchange offer, the consummation of which would result
in any Person becoming the Beneficial Owner of Common Shares aggregating 30% or
more of the then outstanding Common Shares or 30% or more of the combined voting
power in the election of directors of the then outstanding Common Shares
(including any such date which is after the date of this Agreement and prior to
the issuance of the Rights).
(i) "Final Expiration Date" shall have the meaning set forth in Section 7
hereof.
(j) "Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
(k) "Purchase Price" shall have the meaning set forth in Section 7 hereof.
(l) "Redemption Date" shall have the meaning set forth in Section 7 hereof.
(m) "Related Person" shall mean (i) any Subsidiary of the Corporation, (ii)
any employee benefit or stock ownership plan of the Corporation or any entity
holding Common Shares for or pursuant to the terms of any such plan, (iii)
Xxxxxxx X. Xxxxxxxxxx, his Affiliates and Associates, (iv) the voting trust
holding Corporation Common Shares created under agreement dated as of June 10,
1994, as amended or (v) any Person who acquired or acquires Beneficial Ownership
of Common Shares representing at least 20% of the Common Shares outstanding or
at least 20% of the combined voting power in the election of directors of the
Common Shares outstanding directly from the Corporation or any other Related
Person in one or a series of related transactions, each of which is approved by
the Board of Directors; provided, however, that if any Person who becomes a
Related Person solely by virtue of subsection (v) above, or any Affiliate or
Associate of such Person, subsequently becomes the Beneficial Owner of any
additional Common Shares in a transaction or transactions not approved by the
Board of Directors, such Person shall no longer be deemed a "Related Person"
with respect to all Common Shares of which it, or any of its Affiliates or
Associates, is the Beneficial Owner."
(n) "Share Acquisition Date" shall mean the first date of public
announcement by the Corporation or an Acquiring Person that an Acquiring Person
has become such.
(o) "Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Corporation hereby appoints the
Rights Agent to act as agent for the Corporation and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Corporation may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates.
(a) Until the Distribution Date, (i) the Rights will be evidenced (subject
to the provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and
(ii) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Corporation will prepare and execute, the Rights Agent
will countersign, and the Corporation will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid mail, to
each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Corporation, a Right Certificate, in substantially the form of Exhibit A hereto
(a "Right Certificate"), evidencing one Right for each Common Share so held. As
of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates or brokers' due bills.
(b) On the Record Date, or as soon as practicable thereafter, the
Corporation will send a copy of a Summary of Rights to Purchase Common Shares,
in substantially the form of Exhibit B hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the Record Date, at the address of such holder shown on
the records of the Corporation. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Shares
outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Union
Acceptance Corporation and Computershare Investor Services, LLC, as
Rights Agent, dated as of November 13, 2001 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive offices of Union
Acceptance Corporation. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
Union Acceptance Corporation will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. As described in the Rights
Agreement, Rights issued to any Person who becomes an Acquiring Person
(as defined in the Rights Agreement) shall become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Corporation purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Corporation
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Common Shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of Common Shares as shall be set forth
therein at the price per Common Share set forth therein (the "Purchase Price"),
but the number of such Common Shares and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Corporation by its Chairman of the Board, its Chief
Executive Officer, its President, its Chief Financial Officer, or its Treasurer,
either manually or by facsimile signature, shall have affixed thereto the
Corporation's seal or a facsimile thereof, and shall be attested by the
Secretary or any Assistant Secretary of the Corporation, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned. In
case any officer of the Corporation who shall have signed any of the Right
Certificates shall cease to be such officer of the Corporation before
countersignature by the Rights Agent and issuance and delivery by the
Corporation, such Right 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 Right Certificates had not ceased to
be such officer of the Corporation; and any Right Certificate may be signed on
behalf of the Corporation by any person who, at the actual date of the execution
of such Right Certificate, shall be a proper officer of the Corporation to sign
such Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of Common Shares as
the Right Certificate or Right Certificates surrendered then entitled each
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose.
Thereupon, the Rights Agent shall countersign and deliver to the person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so
requested. The Corporation may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
Upon receipt by the Corporation and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Corporation's request,
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 Right Certificate if mutilated, the Corporation will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the office of the Rights Agent designated for such
purpose, together with payment of the Purchase Price for each Common Share as to
which the Rights are exercised, at or prior to the earliest of (i) the close of
business on November 12, 2011 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date"), or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The "Purchase Price" for each Common Share pursuant to the exercise of
a Right shall initially be $30.00, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Corporation, the Rights Agent
shall thereupon promptly (i) (A) requisition from any transfer agent of the
Common Shares certificates for the number of Common Shares to be purchased and
the Corporation hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) requisition from the depositary agent depositary
receipts representing such number of Common Shares as are to be purchased (in
which case certificates for the Common Shares represented by such receipts shall
be deposited by the transfer agent with the depositary agent) and the
Corporation hereby directs the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Corporation the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14
hereof, (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
Right Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) The Corporation covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Common Shares the number
of Common Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with this Section 7.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Corporation or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Corporation shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or acquired by the
Corporation otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Corporation, or shall, at the
written request of the Corporation, provide the Corporation with a microfiche
copy thereof and destroy such cancelled Right Certificates, and deliver a
certificate of destruction thereof to the Corporation.
Section 9. Availability of Common Shares.
(a) If the Common Shares issuable and deliverable upon the exercise of
Rights are or become listed on any national securities exchange, the Corporation
shall use its reasonable best efforts to cause, from and after such time as the
Rights become exercisable, all Common Shares reserved for issuance to be listed
on such exchange upon official notice of issuance upon such exercise.
(b) The Corporation shall use its reasonable best efforts to (i) file, as
soon as practicable following the later to occur of an event described in
Section 11(a)(ii) or Section 13 hereof or the Distribution Date, a registration
statement under the Securities Act of 1933, as amended (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 earlier of the Final Expiration
Date or the Redemption Date. 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;
provided, however, that the Corporation may temporarily suspend the
exercisability of the Rights to prepare and file such registration statement and
permit it to become effective and 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. Notwithstanding any such provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification or other registration or
compliance requirements in such jurisdiction shall have been obtained.
(c) The Corporation covenants and agrees that it will take all such action
as may be necessary to ensure that all Common Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Common Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
(d) The Corporation further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Common Shares upon the exercise of Rights. The Corporation shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Common
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Common Shares upon the exercise of
any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until it
has been established to the Corporation's reasonable satisfaction that no such
tax is due.
Section 10. Common Shares Record Date. Each person in whose name any
certificate for Common Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Common Shares transfer books of the Corporation are closed, such person shall be
deemed to have become the record holder on such succeeding Business Day on which
the Common Shares transfer books of the Corporation are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Common Shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Corporation, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Common 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 a dividend on the Common Shares payable in
Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of Common Shares or (D)
issue any shares of its capital stock in a reclassification of the Common
Shares (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),
the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted (without
duplicating the effect of Section 11(n)) so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate number
and kind of shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the Common Shares
transfer books of the Corporation were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value, if any, of the shares of capital stock
of the Corporation issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event that
(A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, shall (1) merge into the Corporation or
otherwise combine with the Corporation and the Corporation shall be
the continuing or surviving corporation of such merger or combination
(other than in a transaction subject to Section 13 hereof), (2) merge
or otherwise combine with any Subsidiary of the Corporation, (3) in
one or more transactions (other than in connection with the exercise
of Rights or the exercise or conversion of securities exercisable or
convertible into capital stock of the Corporation or any of its
Subsidiaries) transfer any assets to the Corporation or any of its
Subsidiaries in exchange (in whole or in part) for shares of any class
of capital stock of the Corporation or any of its Subsidiaries or for
securities exercisable for or convertible into shares of any class of
capital stock of the Corporation or of any of its Subsidiaries, or
otherwise obtain from the Corporation or any of its Subsidiaries, with
or without consideration, any additional shares of any class of
capital stock of the Corporation or any of its Subsidiaries or
securities exercisable for or convertible into shares of any class of
capital stock of the Corporation or any of its Subsidiaries (other
than as part of a pro rata distribution to all holders of such shares
of any class of capital stock of the Corporation, or any of its
Subsidiaries), (4) sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise dispose (in one or more transactions) of any
assets (including securities) to, from, with or of, as the case may
be, the Corporation or any of its Subsidiaries (other than in a
transaction subject to Section 13 hereof), (5) receive any
compensation from the Corporation or any of its Subsidiaries other
than compensation as a director or for full-time employment as a
regular employee, in either case, at rates in accordance with the
Corporation's (or its Subsidiaries') past practices, or (6) receive
the benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantage
provided by the Corporation or any of its Subsidiaries, or
(B) during such time as there is an Acquiring Person, there shall
be any reclassification of securities (including any reverse stock
split), or recapitalization or reorganization of the Corporation, or
any merger or consolidation of the Corporation with any of its
Subsidiaries or any other transaction or series of transactions
involving the Corporation or any of its Subsidiaries (whether or not
with or into or otherwise involving an Acquiring Person), other than a
transaction subject to Section 13 hereof, which has the effect,
directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity
securities of the Corporation or any of its Subsidiaries beneficially
owned by any Acquiring Person or any Affiliate or Associate thereof,
or
(C) any Person (other than the Corporation or any Related Person)
who or which, together with all Affiliates and Associates of such
Person, shall at any time after the date of this Agreement, become the
Beneficial Owner of 20% or more of the Common Shares then outstanding
or 20% or more of the combined voting power in the election of
directors of the Common Shares then outstanding (other than pursuant
to any transaction set forth in Section 13 hereof); provided, however,
that a Person shall not be deemed to have become the Beneficial Owner
of 20% or more of the Common Shares then outstanding or 20% or more of
the combined voting power in the election of directors of the Common
Shares then outstanding for the purposes of this Section 11(a)(ii)(C)
solely as a result of a reduction in the number of Common Shares
outstanding, unless subsequent to such reduction such Person or any
Affiliate or Associate of such Person shall become the Beneficial
Owner of any additional Common Shares, or
(D) any Person is declared to be an Adverse Person by the Board
of Directors,
then each holder of a Right shall thereafter have a right to receive, upon
exercise thereof in accordance with the terms of this Agreement and in lieu
of the number of Common Shares for which the Right is then exercisable,
such number of Common Shares of the Corporation as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number
of Common Shares for which a Right is then exercisable and dividing that
product by (y) 50% of the then current market price per share of the
Corporation's Common Shares (determined pursuant to Section 11(d) hereof on
the date such Person became an Acquiring Person). In the event that any
Person shall become an Acquiring Person and the Rights shall then be
outstanding, the Corporation shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the Rights.
From and after the occurrence of the earlier of the events described
in clauses (A), (B), (C) and (D) above, any Rights that are or were
acquired or beneficially owned by such Acquiring Person (or any Associate
or Affiliate of such Acquiring Person but including, without limitation,
the Person referred to in clause (C)) and any such Adverse Person shall be
void and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person or Adverse Person whose Rights
would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at any time upon
the transfer of any Rights to an Acquiring Person or Adverse Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Adverse
Person, Associate or Affiliate; and any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person or Adverse Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof shall be cancelled.
(iii) In the event that there shall not be sufficient Common Shares
authorized and unissued to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Corporation shall take
all such action as may be necessary to authorize additional Common Shares
for issuance upon exercise of the Rights. However, if the Corporation is
unable to cause the authorization of additional Common Shares within 90
calendar days after the occurrence of an event in Section 11(a)(ii), then,
notwithstanding anything in this Agreement to the contrary, the Corporation
shall determine the excess of the value of the Common Shares issuable upon
the exercise of a Right over the Purchase Price (such excess being
hereinafter referred to as the "Spread") and shall be obligated to deliver,
upon the surrender of such Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available) and cash (to the
extent permitted by applicable law and any agreements or instruments to
which the Corporation is a party in effect immediately prior to the first
occurrence of an event in Section 11(a)(ii)) in an amount equal to the
Spread. To the extent that any legal or contractual restrictions prevent
the Corporation from paying the full amount of cash payable in accordance
with the foregoing sentence, the Corporation shall pay to holders of the
Rights as to which such payments are payable all amounts which are not then
restricted on a pro rata basis and shall continue to make payments on a pro
rata basis as funds become available until the full amount due to each such
Right holder has been paid.
(b) In case the Corporation shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Shares entitling them (for
a period expiring within 45 calendar days after such record date) to subscribe
for or purchase Common Shares (or shares having the same rights, privileges and
preferences as the Common Shares ("equivalent common shares")) or securities
convertible into Common Shares or equivalent common shares at a price per Common
Share or equivalent common share (or having a conversion price per share, if a
security convertible into Common Shares or equivalent common shares) less than
the then current per share market price of the Common Shares (as defined in
Section 11(d)) 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 Common Shares outstanding on such record date plus the
number of Common Shares which the aggregate offering price of the total number
of Common Shares and/or equivalent common shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of Common Shares outstanding on such record date plus
the number of additional Common Shares and/or equivalent common shares to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value, if any, of the shares of capital stock of the
Corporation issuable upon exercise of one Right. In case such subscription price
may be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board of Directors of the Corporation, whose determination shall be
described in a statement filed with the Rights Agent. Common Shares 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 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 the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the then current per share market price of the Common Shares 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) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Common Share and the denominator of which shall be
such current per share market price of the Common Shares; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value, if any, of the shares of capital
stock of the Corporation to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to
such date; provided, however, that in the event that the current per share
market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination of
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price
per share equivalent of such Security. 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 Security is 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 Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the Nasdaq
Stock Market ("NASDAQ"), the OTC Bulletin Board or such other system then
in use, or, if on any such date the Security is 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 Security selected by
the Board of Directors of the Corporation. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Common Shares shall be determined in accordance
with the method set forth in Section 11(d)(i). If the Common Shares are not
publicly held or so listed or traded, "current per share market price"
shall mean the fair value per share as determined in good faith by the
Board of Directors of the Corporation, whose determination shall be
described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 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
Common Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Corporation other than Common Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right 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 Common
Shares contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10 and 13 with respect to the Common Shares 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 Common Shares
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 Common Shares
(calculated to the nearest one ten-thousandth of a Common Share) obtained by (i)
multiplying (x) the number of Common Shares covered by a Right immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Corporation may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights in substitution for any adjustment
in the number of Common Shares purchasable upon the exercise of a Right. Each of
the Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of Common Shares 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. This record date may be
the date on which the purchase price is adjusted or any day thereafter, but, if
the Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Corporation, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Corporation, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Common Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of Common Shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Common Shares issuable
upon exercise of the Rights, the Corporation shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and nonassessable Common
Shares 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 elect to defer, until the occurrence of such event,
issuing to the holder of any Right exercised after such record date the Common
Shares and other capital stock or securities of the Corporation, if any,
issuable upon such exercise over and above the Common Shares and other capital
stock or securities of the Corporation, if any, issuable 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 evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
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 it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Common Shares, (ii)
issuance wholly for cash of any Common Shares at less than the current market
price, (iii) issuance wholly for cash of Common Shares or securities which by
their terms are convertible into or exchangeable for Common Shares, (iv)
dividends on Common Shares payable in Common Shares, or (v) issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Corporation to holders of its Common Shares shall not be taxable to such
shareholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Corporation shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (y) the
number of Common Shares purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of Common Shares so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares outstanding
immediately after such event, and (z) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Corporation shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25 hereof. The Rights
Agent shall be fully protected in relying on such certificate and shall not be
deemed to have knowledge of any adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. In the event, directly or indirectly, (a) the Corporation shall
consolidate with, or merge with and into, any other Person, (b) any Person shall
consolidate with the Corporation, or merge with and into the Corporation and the
Corporation shall be the continuing or surviving corporation of such merger or
consolidation and, in connection with such merger or consolidation, all or part
of the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person (or the Corporation) or cash or any other
property, or (c) the Corporation shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power (including without limitation securities
creating any obligation on the part of the Corporation and/or any of its
Subsidiaries) aggregating 50% or more of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) outside the ordinary course
of business to any other Person other than the Corporation or one or more of its
wholly-owned Subsidiaries, then, and in each such case, proper provision shall
be made so that (i) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise thereof in
accordance with the terms of this Agreement and in lieu of Common Shares of the
Corporation, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of such other Person (including
the Corporation as successor thereto or as the surviving corporation), free and
clear of any liens, encumbrances and other adverse claims and not subject to any
rights of call or first refusal, as shall be equal to the result obtained by (A)
multiplying the then current Purchase Price by the number of Common Shares for
which a Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and dividing that product
by (B) 50% of the then current per share market price of the Common Shares of
such other Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the Issuer of
such Common Shares shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, all the obligations and duties
of the Corporation pursuant to this Agreement; (iii) the term "Corporation"
shall thereafter be deemed to refer to such Issuer; and (iv) such Issuer shall
take such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights. For purposes of this Section 13,
"Issuer" shall mean (x) in the case of any event described in Sections 13(a) or
(b) above, the Person that is the continuing, surviving, resulting or acquiring
Person (including the Corporation as the continuing or surviving corporation of
a transaction described in Section 13(b) above), and (y) in the case of any
event described in Section 13(c) above, the Person that is the party receiving
the greatest portion of the assets or earning power (including without
limitation securities creating any obligation on the part of the Corporation
and/or any of its Subsidiaries) transferred pursuant to such transaction or
transactions; provided, however, that, in any such case, (A) if (1) no class of
equity security of such Person is, at the time of such merger, consolidation or
transaction and has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, and (2) such Person is a Subsidiary, directly or indirectly, of another
Person, a class of equity security of which is and has been so registered, the
term "Issuer" shall mean such other Person; and (B), in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, a class of equity
security of two or more of which are and have been so registered, the term
"Issuer" shall mean whichever of such Persons is the issuer of the equity
security having the greatest aggregate market value. Notwithstanding the
foregoing, if the Issuer in any of the events listed above is not a corporation
or other legal entity having outstanding equity securities, then, and in each
such case, (i) if the Issuer is directly or indirectly wholly owned by a
corporation or other legal entity having outstanding equity securities, then all
references to Common Shares of the Issuer shall be deemed to be references to
the Common Shares of the corporation or other legal entity having outstanding
equity securities which ultimately controls the Issuer, and (ii) if there is no
such corporation or other legal entity having outstanding equity securities, (Y)
proper provision shall be made so that the Issuer shall create or otherwise make
available for purposes of the exercise of the Rights in accordance with the
terms of this Agreement, a type or types of security or securities having a fair
market value at least equal to the economic value of the Common Shares which
each holder of a Right would have been entitled to receive if the Issuer had
been a corporation or other legal entity having outstanding equity securities;
and (Z) all other provisions of this Agreement shall apply to the issuer of such
securities as if such securities were Common Shares. The Corporation shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Issuer shall have a sufficient number of authorized Common Shares (or other
securities as contemplated above) 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 to such consummation the Corporation and such Issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in this Section 13 and further providing that
as soon as practicable after the consummation of any such consolidation, merger,
sale or transfer, the Issuer will:
(i) prepare and file a registration statement under the Securities
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
earlier of the Expiration Date or the Redemption Date; and
(ii) deliver to holders of the Rights historical financial statements
for the Issuer and each of its Affiliates which comply in all respects with
the requirements for registration on Form 10 under the Exchange Act.
The Corporation shall not enter into any transaction of the kind referred to in
this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed 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 in 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 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 Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Corporation
shall pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Common Share. For the purposes of
this Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to Section 11(d) hereof)
for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Corporation and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares:
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer; and
(c) the Corporation and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate 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 affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Common Shares, or any other
securities of the Corporation which may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. 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 other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights Agent and its
Affiliates and each of their directors, officers, employees and agents
(collectively, the "Indemnified Parties") for, and to hold them harmless
against, any damage, loss, liability, cost or expense incurred, in the absence
of gross negligence, bad faith or willful misconduct on the part of the
Indemnified Parties, for anything done or omitted by the Indemnified Parties, in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim or demand of liability in
the premises.
The Rights Agent and its Affiliates shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Common Shares or for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created by
this Agreement any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Corporation and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its own choice (who
may be legal counsel for the Corporation), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Corporation prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer, the
Secretary or the Treasurer of the Corporation and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Corporation and any
other Person only for its own negligence, bad faith or willful misconduct. In no
event shall the Rights Agent be liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits).
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Corporation of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Common Shares will, when
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 any
one of the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Executive Officer, the Secretary or the Treasurer of the Corporation,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered 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 or omitted by
the Rights Agent under this Rights Agreement and the date on and/or after which
such action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any such officer of the Corporation actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the 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 legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Corporation resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Corporation and to each transfer
agent of the Common Shares by registered or certified mail, and to the holders
of the Right 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 Common Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
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 Right Certificate who shall, with such notice, submit his Right
Certificate for inspection by the Corporation, then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation or by such a court, shall be (i) a corporation organized and
doing business under the laws of the United States (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution), in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $100
million or (ii) a subsidiary of a corporation described in clause (i) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Corporation shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares, and mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Corporation
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Corporation may, at its option, at any
time prior to the earlier of (i) the Final Expiration Date and (ii) the tenth
calendar day following the Share Acquisition Date (or, if the Share Acquisition
Date shall have occurred prior to the Record Date, the Close of Business on the
tenth calendar day following the Record Date), or such later date as may be
specified by a majority of the Board of Directors, redeem all but not less than
all the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of the Rights
by the Board of Directors may be made effective at such time on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish.
(b) If, following the occurrence of a Share Acquisition Date and following
the expiration of the right of redemption hereunder but prior to the occurrence
of an event described in Sections (A), (B), (C) or (D) of Section 11(a)(ii) or
Sections (a), (b) or (c) of Section 13 (each, a "Triggering Event") each of the
following shall have occurred and remain in effect: (i) a Person who is an
Acquiring Person shall have transferred or otherwise disposed of a number of
Common Shares in a transaction, or series of transactions, which did not result
in the occurrence of any Triggering Event such that such Person is thereafter a
Beneficial Owner of 10% or less of the outstanding Common Shares and 10% or less
of the combined voting power in the election of directors of the outstanding
Common Shares, (ii) there are no other Persons, immediately following the
occurrence of the event described in clause (i), who are Acquiring Persons, and
(iii) the transfer or other disposition described in clause (i) above was other
than pursuant to a transaction, or series of transactions, which directly or
indirectly involved the Corporation or any of its Subsidiaries, then the right
of redemption set forth in Section 23(a) shall be reinstated and thereafter be
subject to the provisions of this Section.
(c) Immediately upon the action of the Board of Directors of the
Corporation ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, 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. The Corporation may,
at its option, pay the Redemption Price in cash, Common Shares (based upon the
current per share market price of the Common Shares (determined pursuant to
Section 11(d) hereof) at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors. The Corporation
shall promptly give public notice of any such redemption; provided, however,
that the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, the Corporation shall mail a notice of redemption to all the
holders of the then outstanding Rights at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Shares. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made. Neither
the Corporation nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, or other than
in connection with the purchase of Common Shares prior to the Distribution Date.
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 void pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors 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 any such Subsidiary, or any entity
holding Common Shares 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 Shares then outstanding or 50% or more of the
combined voting power in the election of directors of the Common Shares 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 such Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Corporation shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The 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
which 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 Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Corporation, at its
option, may substitute equivalent common shares, as such term is defined in
Section 11(h) hereof, for Common Shares exchangeable for Rights, as
appropriately adjusted to reflect adjustments in the voting rights of the Common
Shares pursuant to the terms thereof, so that the fraction of an equivalent
common share delivered in lieu of each Common Share shall have the same voting
rights as one Common Share.
(d) In the event that there shall not be sufficient Common 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 action as may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights.
(e) The Corporation shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Corporation shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Common Share. For the
purposes of this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant to Section
11(d) hereof) 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 (i) to pay any dividend payable
in stock of any class to the holders of its Common Shares or to make any other
distribution to the holders of its Common Shares (other than a regular quarterly
cash dividend), (ii) to offer to the holders of its Common Shares rights or
warrants to subscribe for or to purchase any additional Common Shares or shares
of stock of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Common Shares, (iv) to effect any
consolidation or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer) outside the ordinary course of business, in one or more transactions,
of 50% or more of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to, any other Person, or (v) to effect the
liquidation, dissolution or winding up of the Corporation, then, in each such
case, the Corporation shall give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or distribution
of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of the Common Shares for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares, whichever shall be
the earlier.
(b) In case any event set forth in Section 11(a)(ii) hereof shall occur,
then the Corporation shall as soon as practicable thereafter give to each holder
of a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the 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:
Union Acceptance Corporation
000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Corporation or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Corporation) as follows:
Computershare Investor Services, LLC
Wall Street Plaza
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx XxXxxxxx
with a copy to:
Computershare Investor Services, LLC
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx 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 Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Corporation prior to issuance of Right Certificates; otherwise, at
the address of such holder as shown on the registry books of the Rights Agent.
Section 27. Supplements and Amendments. Prior to the Distribution Date, if
the Corporation so directs, the Corporation and the Rights Agent shall
supplement or amend any provision of this Agreement in any manner which the
Corporation may deem desirable without the approval of any holders of Rights or
certificates representing Common Shares. From and after the Distribution Date,
if the Corporation so directs, the Corporation, upon approval by the Board of
Directors and the Rights Agent shall supplement or amend this Agreement without
the approval of any holders of Rights or Certificates representing Common Shares
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any manner which the
Corporation, upon such approval, may deem desirable, including without
limitation the addition of other events requiring adjustment to the Rights under
Sections 11 or 13 or procedures relating to the redemption of the Rights, which
change, amendment or supplement shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of any such Person); provided, however, that this Agreement may not
be supplemented or amended pursuant to this sentence to lengthen, pursuant to
clause (iii) of this sentence, any time period unless such lengthening is
specifically contemplated hereby or is for the purpose of protecting, enhancing
or clarifying the rights of, or the benefits to, the holders of Rights. Upon the
delivery of a certificate from the Chairman of the Board, the President, the
Chief Executive Officer or the Chief Financial Officer of the Corporation which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment;
provided, however, that the failure or refusal of the Rights Agent to execute
such supplement or amendment shall not affect the validity or effective date of
any supplement or amendment adopted by the Corporation. Notwithstanding anything
in this Agreement to the contrary, no supplement or amendment shall be made
which decreases the stated Redemption Price or the period of time remaining
until the Final Expiration Date.
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.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person or corporation other than the Corporation, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. 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.
Section 31. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Indiana and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State.
Section 32. 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 33. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
UNION ACCEPTANCE CORPORATION
By: /s/ Xxxx X. Xxxxx
----------------------------------
Xxxx X. Xxxxx
Vice President, Chief Financial
Officer and Treasurer
Attest:
By: /a/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxx, Secretary
COMPUTERSHARE INVESTOR SERVICES, LLC
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Relationship Manager
Attest:
By: [signature illegible]
---------------------------------
Name:
Title:
EXHIBIT A
Form of Right Certificate
Certificate No. _____ Rights
NOT EXERCISABLE AFTER NOVEMBER 12, 2011 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
UNION ACCEPTANCE CORPORATION
This certifies that ____________________________, or registered assigns, is
the registered owner of the number 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 November 13, 2001 (the "Rights Agreement"),
between Union Acceptance Corporation, an Indiana corporation (the
"Corporation"), and Computershare Investor Services, LLC (the "Rights Agent"),
to purchase from the Corporation at any time after the Distribution Date (as
such term is defined in the Rights Agreement) and prior to 5:00 P.M., eastern
standard time, on November 12, 2011 at the office of the Rights Agent designated
for such purpose, or at the office of its successor as Rights Agent, one fully
paid nonassessable share of the Common Stock, without par value, of the
Corporation (the "Common Shares"), at a purchase price of $30.00 per Common
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of Common Shares
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of November 13,
2001, based on the Common Shares as constituted at such date. As provided in the
Rights Agreement, the Purchase Price and the number of Common Shares which may
be purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by this 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 of the Corporation and of the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Corporation and the above-mentioned offices of the
Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised. In no event will certificates for
fractional Rights be issued.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed in whole, but not in part, by the
Corporation at a redemption price of $.01 per Right or (ii) may be exchanged in
whole or in part for number of Common Shares equal to such redemption price.
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby, but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Common Shares or of any
other securities of the Corporation which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
duly exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purchase
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation,
and its corporate seal. Dated as of ______________, 2001.
ATTEST: UNION ACCEPTANCE CORPORATION
By:
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Secretary President
Countersigned:
COMPUTERSHARE INVESTOR SERVICES, LLC
By:
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Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto _________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________________,
Attorney, to transfer the within Right Certificate on the books of the
within-named Corporation, with full power of substitution.
Dated: ,
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Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
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CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
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Signature
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Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Union Acceptance Corporation:
The undersigned hereby irrevocably elects to exercise _____________________
Rights represented by this Right Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that certificates for
such Common Shares be issued in the name of:
Please insert social security
or other identifying number:
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(Please print name and address)
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If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
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(Please print name and address)
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Dated: ,
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Signature
Signature Guaranteed:
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Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
Form of Reverse Side of Right Certificate -- continued
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CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
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Signature
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NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Corporation and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On November 13, 2001, the Board of Directors of Union Acceptance
Corporation (the "Company") declared a dividend of one Common Share Purchase
Right (a "Right" or "Rights") for each outstanding share of all Common Stock,
without par value (the "Common Shares"), of the Company. The dividend is payable
on December 15, 2001 to the shareholders of record as of December 1, 2001 (the
"Record Date"). If and when the Rights become exercisable, each Right will
entitle the registered holder to purchase from the Company one share of Common
Stock at a purchase price of $30.00 (the "Purchase Price"), although the price
may be adjusted as described below. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement") between the Company and
Computershare Investor Services, LLC, as Rights Agent (the "Rights Agent").
TRADING AND DISTRIBUTION OF RIGHTS
Initially, shareholders will not receive a separate certificate for the
Rights. The Rights will be represented by the outstanding Common Share
certificates with a copy of this Summary of Rights attached thereto and the
Rights cannot be bought, sold or otherwise traded separately from the Common
Shares. Certificates for Common Shares issued after the Record Date will carry a
notation that indicates that Rights are attached to the Common Shares and that
the terms of the Rights Agreement are incorporated therein.
Separate certificates representing the Rights will be distributed as soon
as practicable after the "Distribution Date," which is the earliest to occur of:
(1) 10 calendar days following a public announcement that a person or
group of affiliated or associated persons (excluding certain related
persons) (an "Acquiring Person") has (a) acquired beneficial ownership of
20% or more of the outstanding Common Shares or 20% or more of the combined
voting power in the election of directors of the outstanding Common Shares
or in the case of any beneficial owner of 20% of the Common Shares or 20%
of the combined voting power in the election of directors of the Common
Shares on the Record Date (excluding certain related persons) additional
shares representing 1% of the outstanding Common Shares or 1% of the
combined voting power in the election of directors of the outstanding
Common Stock (b) become the beneficial owner of an amount of the
outstanding Common Shares or combined voting power in the election of
directors of the outstanding Common Shares (but not less than 10%) which
the Board of Directors determines to be substantial and which ownership the
Board of Directors determines is intended or may be reasonably anticipated,
in general, to cause the Company to take actions determined by the Board of
Directors to be not in the Company's best long-term interests (an "Adverse
Person"), or
(2) 10 business days (or such later date as may be determined by
action of the Board of Directors prior to the time any person or group
becomes an Acquiring Person) following the commencement or announcement of
an intention to make a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of 30%
or more of such outstanding Common Shares or 30% or more of the combined
voting power in the election of directors of such outstanding Common
Shares.
Until the Distribution Date (or earlier exchange, redemption or expiration
of the Rights), the surrender or transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date and,
thereafter, such separate Right Certificates alone will evidence the Rights.
EXERCISABILITY AND EXPIRATION
The holders of the Rights are not required to take any action until the
Rights become exercisable. As described above, the Rights are not exercisable
until the Distribution Date. Holders of the Rights will be notified that the
Rights have become exercisable when the Rights Agent mails the Rights
Certificates. The Rights will expire on November 12, 2011 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed by the Company, in each case, as described below.
ADJUSTMENTS
In order to protect the value of the Rights to the holders, the Purchase
Price payable and the number of Common Shares or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to
time (1) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (2) upon the grant to holders of the
Common Shares of certain rights or warrants to subscribe for or purchase Common
Shares at a price, or securities convertible into Common Shares with a
conversion price less than the then current market price of Common Shares, or
(3) upon the distribution to holders of the Common Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Common Shares) or of
subscription rights or warrants, other than those referred to above.
These adjustments are called anti-dilution provisions and are intended to
ensure that a holder of Rights will not be adversely affected by the occurrence
of such events. With certain exceptions, the Company is not required to adjust
the Purchase Price until cumulative adjustments require a change of at least 1%
in the Purchase Price. No fractional Common Shares will be issued and in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Shares on the last trading day prior to the date of exercise.
FLIP-OVER EVENTS AND FLIP-IN EVENTS
In the event that (1) the Company is acquired in a merger or other business
combination transaction and the Company is not the surviving corporation, or (2)
any person consolidates or merges with the Company and all or part of the
Company's Common Shares are exchanged for securities, cash or property of any
other person, or (3) 50% or more of the Company's consolidated assets or earning
power are sold (collectively, "Flip-Over Events"), proper provision will be made
so that each holder of a Right will thereafter have the right to receive, upon
the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company which at the time of
such transaction will have a market value of two times the exercise price of the
Right. In the event that (1) an Acquiring Person engages in certain self-dealing
transactions, or (2) a person is declared an Adverse Person by the Board of
Directors of the Company, or (3) a person (other than certain related persons)
acquires 20% or more of the outstanding Common Shares or 20% or more of the
combined voting power in the election of directors of the Common Shares
(collectively, "Flip-In Events"), proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two times the
exercise price of the Right.
EXCHANGE OPTION
At any time after a person becomes an Acquiring Person, and prior to the
acquisition by such Acquiring Person of 50% or more of the outstanding Common
Shares or 50% of the combined voting power in the election of directors of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which have become
void), in whole or in part, at an exchange ratio of one Common Share per Right
(subject to adjustment).
REDEMPTION
At any time prior to the tenth calendar day following the date of a public
announcement that a person or group has become an Acquiring Person, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
If the Board of Directors' ability to redeem the Rights pursuant to the
Rights Agreement has expired because a person or group has become an Acquiring
Person, but a Flip-Over Event or certain Flip-In Events have not yet occurred,
the redemption right will be reinstated if the Acquiring Person disposes of a
sufficient number of the Company's Common Shares so that such person then owns
only 10% or less of the outstanding Company's Common Shares and 10% or less of
the combined voting power in the election of directors of the outstanding
Company's Common Shares and if certain other conditions are met.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after such time as any person becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement is available from the Company at no charge
upon written request. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by this reference.
