EXHIBIT 4.1
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TANDY CORPORATION
and
BANKBOSTON, N.A.,
Rights Agent
Amended and Restated Rights Agreement
Dated as of July 26, 1999
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions.............................. 2
Section 2. Appointment of Rights Agent...................... 6
Section 3. Issuance of Rights Certificates.................. 6
Section 4. Form of Rights Certificates...................... 9
Section 5. Countersignature and Registration................ 10
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates............... 10
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights................................... 12
Section 8. Cancellation and Destruction of Rights
Certificates..................................... 15
Section 9. Reservation and Availability of Preferred Shares. 15
Section 10. Record Date...................................... 17
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights.................... 17
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares................................. 28
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.......................... 29
Section 14. Fractional Rights and Fractional Shares.......... 32
Section 15. Rights of Action................................. 34
Section 16. Agreement of Rights Holders...................... 35
Section 17. Rights Certificate Holder Not Deemed a
Stockholder...................................... 36
Section 18. Concerning the Rights Agent...................... 36
Section 19. Merger or Consolidation or Change of Name of
Rights Agent..................................... 37
Section 20. Duties of Rights Agent........................... 38
Section 21. Change of Rights Agent........................... 41
Section 22. Issuance of New Rights Certificates.............. 42
Section 23. Redemption and Termination....................... 43
Section 24. Exchange......................................... 45
Section 25. Notice of Certain Events......................... 47
Section 26. Notices.......................................... 48
Section 27. Supplements and Amendments....................... 49
Section 28. Determination and Actions by the Board of
Directors, etc................................... 50
Section 29. Successors....................................... 51
Section 30. Benefits of this Agreement....................... 51
Section 31. Severability..................................... 51
Section 32. Governing Law.................................... 51
Section 33. Counterparts..................................... 51
Section 34. Descriptive Headings............................. 51
Exhibit A - Form of Amended Certificate of Designation of
Series A Junior Participating Preferred Stock.... A-1
Exhibit B - Form of Rights Certificate....................... B-1
Exhibit C - Form of Summary of Rights........................ C-1
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DEFINED TERM CROSS REFERENCE SHEET
Acquiring Person.....................................Section 1(a)
Act................................................. Section 1(b)
Adjusted Number of Shares......................Section 11(a)(iii)
Adjusted Purchase Price........................Section 11(a)(iii)
Adjustment Fraction.................................Section 11(q)
Adjustment Shares...............................Section 11(a)(ii)
Affiliate............................................Section 1(c)
Associate............................................Section 1(c)
Beneficial Owner.....................................Section 1(d)
Beneficially Own.................................Section 1(d)(ii)
Business Day.........................................Section 1(e)
Capital Stock Equivalent.......................Section 11(a)(iii)
Close of Business....................................Section 1(f)
Common Shares........................................Section 1(g)
Company...................................................Preface
Current Per Share Market Price...................Section 11(d)(i)
Distribution Date....................................Section 3(a)
Equivalent Preferred Shares.........................Section 11(b)
Exchange Act.........................................Section 1(c)
Exchange Ratio......................................Section 24(a)
Final Expiration Date................................Section 7(a)
Interested Stockholder...............................Section 1(j)
Original Agreement........................................Preface
Permitted Offer......................................Section 1(k)
Person...............................................Section 1(l)
Preferred Shares.....................................Section 1(m)
Principal Party.....................................Section 13(b)
Proration Factor...............................Section 11(a)(iii)
Purchase Price.......................................Section 4(a)
Record Date...............................................Preface
Redemption Date......................................Section 7(a)
Redemption Price.................................Section 23(a)(i)
Right.....................................................Preface
Rights Agent..............................................Preface
Rights Agreement..........................................Preface
Rights Certificate...................................Section 3(a)
Section 11(a)(ii) Event..............................Section 1(o)
Section 13 Event.....................................Section 1(p)
Security.........................................Section 11(d)(i)
Shares Acquisition Date..............................Section 1(q)
Subsidiary...........................................Section 1(r)
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Summary of Rights....................................Section 3(b)
Then Outstanding................................Section 1(d)(iii)
Trading Day......................................Section 11(d)(i)
Triggering Event.....................................Section 1(s)
Voting Securities...................................Section 13(a)
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AMENDED AND RESTATED RIGHTS AGREEMENT
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This Amended and Restated Rights Agreement, dated as of July
26, 1999 (the "Rights Agreement"), between Tandy Corporation, a
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Delaware corporation (the "Company"), and BankBoston, N.A., a
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national banking association (the "Rights Agent"), amends and
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restates the Amended and Restated Rights Agreement, dated as of
June 22, 1990 (the "First Amended and Restated Agreement"),
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between the Company and the Rights Agent, which amended and
restated the Rights Agreement, dated as of August 15, 1986 (the
"Original Agreement"), between the Company and the Rights Agent.
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WITNESSETH:
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WHEREAS, on August 15, 1986, the Board of Directors of the
Company authorized and declared a dividend of one preferred share
purchase right (a "Right") for each Common Share (as hereinafter
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defined) of the Company outstanding as of the close of business
on August 29, 1986 (the "Record Date"), each Right representing
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the right to purchase one ten-thousandth of a share of Series A
Junior Participating Preferred Stock, without par value, of the
Company having the rights and preferences set forth in the form
of Certificate of Designations filed with the Secretary of the
State of Delaware on November 13, 1986 (as amended on June 25,
1990), upon the terms and subject to the conditions set forth in
the Original Agreement, and further authorized the issuance of
one Right with respect to each Common Share that became
outstanding after the Distribution Date, the Redemption Date and
the Final Expiration Date (as such terms are defined in Sections
3 and 7 of the Original Agreement);
WHEREAS, on June 24, 1988, the Board of Directors of the
Company resolved to amend the Original Agreement and such
amendments became effective by agreement with the Rights Agent;
WHEREAS, on June 22, 1990, the Board of Directors of the
Company resolved further to amend and to restate in its entirety
the Original Agreement, and such amendments became effective by
agreement with the Rights Agent;
WHEREAS, on July 24, 1999, the Board of Directors of the
Company determined that it is advisable and in the best interests
of the Company and its stockholders to amend and restate in its
entirety the First Amended and Restated Agreement on the terms
and conditions set forth herein; and
NOW THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
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Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
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together with all Affiliates and Associates of such Person,
without the prior approval of at least a majority of the members
of the Board of Directors, shall be the Beneficial Owner of 15%
or more of the Common Shares then outstanding (other than as a
result of a Permitted Offer (as hereinafter defined)) or was such
a Beneficial Owner at any time after the date hereof, whether or
not such Person continues to be the Beneficial Owner of 15% or
more of the then outstanding Common Shares. Notwithstanding the
foregoing, (A) the term "Acquiring Person" shall not include (i)
the Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company or of any Subsidiary of the
Company, or (iv) any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan; and (B) no Person shall become an "Acquiring Person"
as a result of the acquisition of Common Shares by the Company
which, by reducing the number of Common Shares outstanding,
increases the proportional number of shares beneficially owned by
such Person together with all Affiliates and Associates of such
Person, provided that if after such share acquisition by the
Company, such Person or an Affiliate or Associate of such Person
becomes the Beneficial Owner of any additional Common Shares,
then such Person shall be deemed an Acquiring Person; and (C) no
Person shall become an Acquiring Person if (1) within five
Business Days after such Person would otherwise have become an
Acquiring Person (but for the operation of this clause (C)), such
Person notifies the Board of Directors that such Person did so
inadvertently, and (2) within
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two Business Days after such notification (or such greater period
of time as may be determined by action of the Board of Directors,
but in no event greater than five Business Days), such Person
divests itself of a sufficient number of Common Shares so that
such Person is the Beneficial Owner of less than 15% of the
outstanding Common Shares.
(b) "Act" shall mean the Securities Act of 1933, as amended
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and as in effect on the date of this Agreement.
(c) "Affiliate" and "Associate" shall have the respective
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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
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Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of and
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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,
or upon the exercise of conversion rights, exchange rights,
rights (other than the 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 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 of the
Exchange Act and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report);
or
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(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing) (other than customary
agreements with and between underwriters and selling group
members with respect to a bona fide public offering of
securities) relating to the acquisition, holding, voting (except
to the extent permitted by subparagraph (ii)(B) of this paragraph
(d)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when
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used with reference to a Person's Beneficial Ownership of
securities of the Company, 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
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Saturday, Sunday, or Federal holiday; or a day on which banking
institutions in the Commonwealth of Massachusetts are authorized
or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00
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P.M., Boston time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Boston time,
on the next succeeding Business Day.
(g) "Common Shares" when used with reference to the Company
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shall mean shares of Common Stock, par value $1.00 per share, of
the Company or, in the event of a subdivision, combination or
consolidation with respect to such shares of Common Stock, the
shares of Common Stock resulting from such subdivision,
combination or consolidation. "Common Shares" when used with
reference to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in
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Section 3 hereof.
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(i) "Final Expiration Date" shall have the meaning set
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forth in Section 7 hereof.
(j) "Interested Stockholder" shall mean any Acquiring
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Person or any Affiliate or Associate of an Acquiring Person or
any other Person in which any such Acquiring Person, Affiliate or
Associate has an interest which represents in excess of 5% of the
total combined economic or voting power of such Person, or any
other Person acting directly or indirectly on behalf of or in
concert with any such Acquiring Person, Affiliate or Associate.
(k) "Permitted Offer" shall mean a tender or exchange offer
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for all outstanding Common Shares at a price and on terms
determined, prior to the purchase of shares under such tender or
exchange offer, by at least a majority of the members of the
Board of Directors to be adequate (taking into account all
factors that such directors deem relevant including, without
limitation, prices that could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to
realize maximum value) and otherwise in the best interests of the
Company and its stockholders (other than the Person or any
Affiliate or Associate thereof on whose behalf the offer is being
made) taking into account all factors that such directors may
deem relevant.
(l) "Person" shall mean any individual, firm, partnership,
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corporation, limited liability company, trust, association, joint
venture or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(m) "Preferred Shares" shall mean shares of Series A Junior
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Participating Preferred Stock, without par value, of the Company
having the relative rights, preferences and limitations set forth
in the Form of Amended Certificate of Designations, Preferences
and Rights attached to this Agreement as Exhibit A.
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(n) "Redemption Date" shall have the meaning set forth in
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Section 7 hereof.
(o) "Section 11(a)(ii) Event" shall mean any event
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described in Section 11(a)(ii) hereof.
(p) "Section 13 Event" shall mean any event described in
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clause (i), (ii) or (iii) of Section 13(a) hereof.
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(q) "Shares Acquisition Date" shall mean the first date of
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public announcement (which, for purposes of this definition shall
include, without limitation, a report filed pursuant to the
Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such; provided that if such Person is
determined not to have become an Acquiring Person pursuant to
Section 1(a) hereof, then no Shares Acquisition Date shall be
deemed to have occurred.
(r) "Subsidiary" of any Person shall mean any corporation
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or other Person of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly
or indirectly, by such Person, or which is otherwise controlled
by such Person.
(s) "Triggering Event" shall mean any Section 11(a)(ii)
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Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
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appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the
Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable upon ten (10) days' prior
written notice to the Rights Agent. The Rights Agent shall have
no duty to supervise, and shall in no event be liable for, the
acts or omissions of any such Co-Rights Agent. In the event the
Company appoints one or more Co-Rights Agents, the respective
duties of the Rights Agent and any Co-Rights Agents shall be as
the Company shall determine.
Section 3. Issuance of Rights Certificates.
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(a) Until the earlier of (i) the Shares Acquisition Date or
(ii) the Close of Business on the tenth day (or such later date
as may be determined by action of the Company's Board of
Directors), after the date of the commencement by any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company or any Person or entity organized, appointed or
established by the Company or of
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any Subsidiary of the Company for or pursuant to the terms of any
such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company or any Person or entity organized,
appointed or established by the Company or of any Subsidiary of
the Company for or pursuant to the terms of any such plan) to
commence (which intention to commence remains in effect for five
Business Days after such announcement), a tender or exchange
offer the consummation of which would result in any Person
becoming an Acquiring Person (including, in the case of both
(i) and (ii), any such date which is after the date of this
Agreement and prior to the issuance of the Rights), the earlier
of such dates being herein referred to as the "Distribution
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Date," (x) 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 Rights Certificates) and
not by separate Rights Certificates, and (y) the right to receive
Rights Certificates will be transferable only in connection with
the transfer of the underlying Common Shares (including a
transfer to the Company); provided, however, that if a tender
offer is terminated prior to the occurrence of a Distribution
Date, then no Distribution Date shall occur as a result of such
tender offer. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent, 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
Company, a Rights Certificate substantially in the form of
Exhibit B hereto (a "Rights Certificate"), evidencing one Right
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for each Common Share so held. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As soon as practicable after the date of this
Agreement, the Company will send a copy of an amended Summary of
Rights to Purchase Preferred Shares, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), by first-
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class, postage-prepaid mail, to each record holder of Common
Shares as of the date of this Agreement, at the address of such
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holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the date of this
Agreement, 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).
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 date of this
Agreement, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the
Rights associated with such Common Shares.
(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 date of
this Agreement but prior to the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date, shall be
deemed also to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and entitles
the holder hereof to certain Rights as set
forth in an Amended and Restated Rights
Agreement between Tandy Corporation and
BankBoston, N.A. dated as of July 26, 1999
(the "Rights Agreement"), as amended from
----------------
time to time, the terms of which are hereby
incorporated herein by reference and a copy
of which is on file at the principal
executive offices of Tandy 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.
Tandy Corporation will mail to the holder of
this certificate a copy of the Rights
Agreement without charge after receipt of a
written request therefor. Under certain
circumstances, as set forth in the Rights
Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring
Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement) and
certain related persons, whether currently
held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Shares represented by such certificates shall be
evidenced by
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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 Company 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
canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares which are
no longer outstanding.
Section 4. Form of Rights Certificates.
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(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Sections 11
and 22 hereof, the Rights Certificates, whenever distributed, on
their face shall entitle the holders thereof to purchase such
number of one ten-thousandths of a Preferred Share as shall be
set forth therein at the price per one ten-thousandth of a
Preferred Share set forth therein (the "Purchase Price"), but the
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amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights which are null and
void pursuant to Section 7(e) of this Agreement and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall contain
(to the extent feasible) the following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned by
a Person who was or became an Acquiring
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Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined
in the Rights Agreement) or certain related
persons. Accordingly, this Rights
Certificate and the Rights represented hereby
are null and void.
The provisions of Section 7(e) of this Rights Agreement shall be
operative whether or not the foregoing legend is contained on any
such Rights Certificate.
Section 5. Countersignature and Registration. The Rights
---------------------------------
Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, President,
any of its Vice Presidents, or its Treasurer, either manually or
by facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof, and shall be attested by the
Secretary, or an Assistant Secretary, of the Company, either
manually or by facsimile signature. The Rights Certificates
shall be countersigned by the Rights Agent and shall not be valid
for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by
the Company with the same force and effect as though the person
who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificate may be signed
on behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although
at the date of the execution of this Rights Agreement any such
person was not such an officer.
Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at the office of the Rights Agent designated
for such purposes, records for registration and transfer of the
Rights Certificates issued hereunder. Such records shall show
the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates and the date and certificate number of
each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
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Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
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Certificates. Subject to the provisions of Sections
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4(b), 7(e), 11 and 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close
of Business on the earlier of the Redemption Date or the Final
Expiration Date, any Rights Certificate or Rights Certificates
may be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the
registered holder to purchase a like number of one ten-
thousandths of a Preferred Share (or, following a Triggering
Event, other securities, as the case may be) as the Rights
Certificate or Rights Certificates surrendered then entitled such
holder (or its transferor in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be
transferred, split-up, combined or exchanged, with the form of
assignment and certificate appropriately executed, at the
principal office or offices of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent
shall, subject to the provisions of Sections 4(b), 7(e), 11 and
14 hereof, countersign and deliver to the Person entitled thereto
a Rights Certificate or Rights Certificates, as the case may be,
as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split-up, combination or
exchange of Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction
or mutilation of a Rights Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights
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Certificate if mutilated, the Company will execute and deliver a
new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
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Date of Rights.
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(a) Subject to Section 7(e) hereof, the registered holder
of any Rights 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
Rights Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the
Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose, together with payment of the
aggregate Purchase Price for the total number of one ten-
thousandths of a Preferred Share (or other securities as the case
may be) as which such surrendered Rights are exercised, at or
prior to the earliest of (i) the Close of Business on July 26,
2009 (the "Final Expiration Date"), (ii) the time at which the
---------------------
Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), (iii) the time at which the Rights are
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exchanged as provided in Section 24 hereof, or (iv) the
consummation of a transaction contemplated by Section 13(d)
hereof.
(b) The Purchase Price for each one ten-thousandth of a
Preferred Share pursuant to the exercise of a Right shall
initially be $250, shall be subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the appropriate form of election to
purchase and the certificate duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares (or other
securities, as the case may be) to be purchased and an amount
equal to any applicable transfer tax required to be paid by the
holder of such Rights Certificate in accordance with Section 6
and Section 9 hereof by certified check, cashier's check or money
order payable to the order of the Company, the Rights Agent shall
thereupon, subject to Section 20(k), promptly (i) (A) requisition
from any transfer agent of the
- 12 -
Preferred Shares (or make available, if the Rights Agent is the
transfer agent) certificates for the number of Preferred Shares
to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) if the
Company, in its sole discretion, shall have elected to deposit
the Preferred Shares issuable upon exercise of the Rights
hereunder into a depositary, requisition from the depositary
agent depositary receipts representing such number of one ten-
thousandths of a Preferred Share as are to be purchased (in which
case certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such requests, (ii) when appropriate,
requisition from the Company the amount of cash, if any, 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 Rights Certificate,
registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt thereof, deliver
such cash to or upon the order of the registered holder of such
Rights Certificate.
In the event that the Company is obligated to issue other
securities (including Common Shares) of the Company pursuant to
Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities are available for
distribution by the Rights Agent, if and when appropriate.
In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11(a)(ii), the Rights Agent shall
return such Rights Certificate to the registered holder thereof
after imprinting, stamping or otherwise indicating thereon that
the Rights represented by such Rights Certificate no longer
include the rights provided by Section 11(a)(ii) of the Rights
Agreement and if less than all the Rights represented by such
Rights Certificate were so exercised, the Rights Agent shall
indicate on the Rights Certificate the number of Rights
represented thereby which continue to include the rights provided
by Section 11(a)(ii).
(d) In case the registered holder of any Rights Certificate
shall exercise (except pursuant to Section 11(a)(ii)) less than
all the Rights evidenced thereby, a new Rights Certificate
- 13 -
evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the
registered holder of such Rights Certificate or to his duly
authorized assigns, subject to the provisions of Section 14
hereof, or the Rights Agent shall place an appropriate notation
on the Rights Certificate with respect to those Rights exercised.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any
Affiliate or Associate thereof) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any Affiliate or Associate thereof) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interest in such Acquiring
Person or to any Person with whom the Acquiring Person has a
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to insure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or
other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such
- 14 -
exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably
request.
Section 8. Cancellation and Destruction of Rights
--------------------------------------
Certificates. All Rights Certificates surrendered for the
------------
purpose of exercise (other than a partial exercise), transfer,
split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent
for cancellation or in canceled form, or if surrendered to the
Rights Agent, shall be canceled by it, and no Rights Certificates
shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such
canceled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred
-----------------------------------------
Shares. The Company covenants and agrees that at all times prior
------
to the occurrence of a Section 11(a)(ii) Event it will cause to
be reserved and kept available out of its authorized and unissued
Preferred Shares, or any authorized and issued Preferred Shares
held in its treasury, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding
Rights and, after the occurrence of a Section 11(a)(ii) Event,
shall to the extent reasonably practicable so reserve and keep
available a sufficient number of Common Shares (and/or other
securities) which may be required to permit the exercise in full
of the Rights pursuant to this Agreement.
So long as the Preferred Shares (and, after the occurrence
of a Section 11(a)(ii) Event, Common Shares or any other
securities) issuable upon the exercise of Rights may be listed on
any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed
on such exchange upon official notice of issuance upon such
exercise.
- 15 -
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares
(or Common Shares and/or other securities, as the case may be)
delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such shares or other securities (subject
to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and non-assessable shares or
securities.
The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes
and charges that may be payable in respect of the issuance or
delivery of the Rights Certificates or of any Preferred Shares
(or Common Shares and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax that may be payable in respect
of any transfer or delivery of Rights Certificates to a person
other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Shares (or Common Shares
and/or other securities, as the case may be) in a name other than
that of, the registered holder of the Rights Certificate
evidencing Rights surrendered for exercise, or to issue or
deliver any certificates or depositary receipts for Preferred
Shares (or Common Shares and/or other securities as the case may
be) upon the exercise of any Rights, until any such tax shall
have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is
due.
The Company shall use its best efforts to (i) file, as soon
as practicable following the Shares Acquisition Date, (or, if
required by law, at such earlier time following the Distribution
Date as so required), a registration statement under the Act,
with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Act and the rules and regulations thereunder)
until the date of the expiration of the rights provided by
Section 11(a)(ii). The Company will also take such action as may
be appropriate under the blue sky laws of the various states.
- 16 -
Section 10. Record Date. Each person in whose name any
-----------
certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of the Preferred Shares (or Common Shares and/or other
securities, as the case may be) represented thereby on, and such
certificate shall be dated the date upon which the Rights
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 Preferred Shares (or Common
Shares and/or other securities, as the case may be) transfer
books of the Company are closed, such person shall be deemed to
have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on
which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company are
open.
Section 11. Adjustment of Purchase Price, Number and Kind
---------------------------------------------
of Shares or Number of Rights. The Purchase Price, the number
-----------------------------
and kind of shares subject to purchase upon exercise of each
Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D)
issue any shares of its capital stock in a reclassification of
the Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if
such Right had been
- 17 -
exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; 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 of the shares of capital stock of
the Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event any Person, alone or together with
its Affiliates and Associates, shall become an Acquiring Person,
then proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e) hereof)
shall, for a period of 60 days after the later of the occurrence
of any such event or the effective date of an appropriate
registration statement under the Act pursuant to Section 9
hereof, have a right to receive, upon exercise thereof at a price
equal to the then current Purchase Price, in accordance with the
terms of this Agreement, such number of Common Shares (or, in the
discretion of the Board of Directors, one ten-thousandths of a
Preferred Share) as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of
one ten-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and dividing that product by (y) 50% of
the then current per share market price of the Company's Common
Shares (determined pursuant to Section 11(d) hereof) on the date
of such first occurrence (such number of shares being referred to
as the "Adjustment Shares"); provided, however, that if the
-----------------
transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply
and no adjustment shall be made pursuant to this Section
11(a)(ii);
- 18 -
(iii) In the event that there shall not be
sufficient treasury shares or authorized but unissued (and
unreserved) Common Shares to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) and the
Rights become so exercisable (and the Board has determined to
make the Rights exercisable into fractions of a Preferred Share),
notwithstanding any other provision of this Agreement, to the
extent necessary and permitted by applicable law, each Right
shall thereafter represent the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the
terms of this Agreement, (x) a number of (or fractions of) Common
Shares (up to the maximum number of Common Shares which may
permissibly be issued) and (y) a number of (or fractions of) one
ten-thousandths of a Preferred Share or a number of, or fractions
of other equity securities of the Company (or, in the discretion
of the Board of Directors, debt) which the Board of Directors of
the Company has determined to have the same aggregate current
market value (determined pursuant to Sections 11(d)(i) and (ii)
hereof, to the extent applicable), as one Common Share (such
number of, or fractions of, Preferred Shares, debt, or other
equity securities or debt of the Company being referred to as a
"capital stock equivalent"), equal in the aggregate to the number
------------------------
of Adjustment Shares; provided, however, if sufficient Common
Shares and/or capital stock equivalents are unavailable, then the
Company shall, to the extent permitted by applicable law, take
all such action as may be necessary to authorize additional
Common Shares or capital stock equivalents for issuance upon
exercise of the Rights, including the calling of a meeting of
stockholders; and provided, further, that if the Company is
unable to cause sufficient Common Shares and/or capital stock
equivalents to be available for issuance upon exercise in full of
the Rights, then each Right shall
- 19 -
thereafter represent the right to receive the Adjusted Number of
Shares upon exercise at the Adjusted Purchase Price (as such
terms are hereinafter defined). As used herein, the term
"Adjusted Number of Shares" shall be equal to that number of (or
-------------------------
fractions of) Common Shares (and/or capital stock equivalents)
equal to the product of (x) the number of Adjustment Shares and
(y) a fraction, the numerator of which is the number of Common
Shares (and/or capital stock equivalents) available for issuance
upon exercise of the Rights and the denominator of which is the
aggregate number of Adjustment Shares otherwise issuable upon
exercise in full of all Rights (assuming there were a sufficient
number of Common Shares available) (such fraction being referred
to as the "Proration Factor"). The "Adjusted Purchase Price"
---------------- -----------------------
shall mean the product of the Purchase Price and the Proration
Factor. The Board of Directors may, but shall not be required
to, establish procedures to allocate the right to receive Common
Shares and capital stock equivalents upon exercise of the Rights
among holders of Rights.
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants
to all holders of Preferred Shares entitling them (for a period
expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible into
---------------------------
Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the
current per share market price of the Preferred Shares (as
determined pursuant to Section 11(d) hereof) on such record date,
the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of
Preferred Shares and/or equivalent preferred 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 per share market price and the denominator of which shall
be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent
preferred 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 of the shares of capital stock
of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part
- 20 -
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 Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent. Preferred Shares owned by or held
for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed; and in
the event that such rights, 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 Company shall fix a record date for the
making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend
payable in Preferred 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 (as determined pursuant to Section 11(d) hereof) of the
Preferred Shares on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on 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 Preferred Share and the denominator of which
shall be such current per share market price of the Preferred
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 of the shares of capital stock of
the Company 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 that would then be in effect if such record date
had not been fixed.
- 21 -
(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 thirty (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 Security, or
(B) any subdivision, combination or reclassification of such
Security, and prior to the expiration of thirty (30) Trading Days
after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to 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
National Association of Securities Dealers, Inc. Automated
Quotations System ("Nasdaq") or such other exchange or market
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 Company. If on any such date no such market
maker is making a market in the Security, the fair value of the
Security on such date as determined in good faith by
- 22 -
the Board of Directors of the Company shall be used. The term
"Trading Day" shall mean a day on which the principal national
-----------
securities exchange on which the 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. Subject to
Section 11(d)(ii) hereof, if any Security is not publicly held or
so listed or traded, the "current per share market price" of such
Security shall mean the fair market value per share as determined
in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares (or one
ten-thousandth of a Preferred Share) shall be determined in the
same manner as set forth in clause (i) of this Section 11(d). If
the Preferred Shares are not publicly traded, the "current per
share market price" of the Preferred Shares shall be conclusively
deemed to be the current per share market price of the Common
Shares as determined pursuant to Section 11(d)(i) (appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by ten
thousand. If neither the Common Shares nor the Preferred Shares
are publicly held or so listed or traded, "current per share
market price" shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 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
Preferred Share, or one hundred-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 (3)
- 23 -
years from the date of the transaction that requires such
adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Preferred
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 shares
contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price,
the number of one ten-thousandths of a Preferred Share
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the
Purchase Price as a result of the calculations made in
Sections 11(b) and 11(c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one ten-thousandths of a Preferred
Share (calculated to the nearest one ten-thousandth of a
Preferred Share) obtained by (i) multiplying (x) the number of
Preferred Shares covered by a Right immediately prior to this
adjustment of the Purchase Price by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price
and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price as a result of the calculations
made in Section 11(b) and (c) to adjust the number of Rights, in
lieu of any adjustment in the number of one ten-thousandths of a
Preferred Share purchasable upon the exercise of a Right. Each
of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one ten-thousandths
of a Preferred Share for
- 24 -
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 hundred-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase
Price is adjusted or any date thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled
after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the
holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one ten-thousandths of a
Preferred Share issuable upon the exercise of the Rights, the
Rights Certificates theretofor and thereafter issued may continue
to express the Purchase Price per share and the number of one ten-
thousandths of a Preferred Share which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of
the number of one ten-thousandths of a Preferred Share,
- 25 -
Common Shares or other securities issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that the
Company may validly and legally issue such number of fully paid
and non-assessable one ten-thousandths of a Preferred Share,
Common Shares or other securities 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 Company may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of one ten-
thousandths of a Preferred Share, Common Shares, or other
securities of the Company, if any, issuable upon such exercise
over and above the number of one ten-thousandths of a Preferred
Share, Common Shares, or other securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive
such additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be
advisable in order that (i) any consolidation or subdivision of
the Preferred Shares, (ii) issuance wholly for cash of Preferred
Shares at less than the current market price, (iii) issuance
wholly for cash of Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares,
(iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable
to such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a
transaction which does not violate Section 11(o) hereof), (ii)
merge with or into any other
- 26 -
Person (other than a Subsidiary of the Company in a transaction
which does not violate Section 11(o) hereof), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which does
not violate Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger, sale or transfer
there are any charter or by-law provisions or any rights,
warrants or other instruments or securities outstanding or
agreements in effect or other actions taken, which would
materially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with
or immediately after such consolidation, merger or sale, the
stockholders of the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section 13(a) hereof shall
have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates. The Company
shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such other Person
shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section
11(n).
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 27 hereof, take (or permit any Subsidiary to take) any
action the purpose of which is to, or if at the time such action
is taken it is reasonably foreseeable that the effect of such
action is to, materially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) The exercise of Rights under Section 11(a)(ii) shall
only result in the loss of rights under Section 11(a)(ii) to the
extent so exercised and shall not otherwise affect the rights
represented by the Rights under this Rights Agreement, including
the rights represented by Section 13.
(q) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the date of this Agreement and prior to the Distribution
Date (i)
- 27 -
declare a dividend on the outstanding Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares,
(iii) combine or consolidate the outstanding Common Shares into a
smaller number of shares or (iv) otherwise reclassify the
outstanding Common Shares, then in any such case, the number of
Rights associated with each Common Share then outstanding, or
issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each Common Share following any
such event shall equal the result obtained by multiplying the
number of Rights associated with each Common Share immediately
prior to such event by a fraction (the "Adjustment Fraction") the
-------------------
numerator of which shall be the total number of Common Shares
outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of Common
Shares outstanding immediately following the occurrence of such
event. In lieu of such adjustment in the number of Rights
associated with one Common Share, the Company may elect to adjust
the number of one ten-thousandths of a Preferred Share
purchasable upon the exercise of one Right and the Purchase
Price. If the Company makes such election, the number of Rights
associated with one Common Share shall remain unchanged, and the
number of one ten-thousandths of a Preferred Share purchasable
upon exercise of one Right and the Purchase Price shall be
proportionately adjusted so that (i) the number of one ten-
thousandths of a Preferred Share purchasable upon exercise of a
Right following such adjustment shall equal the product of the
number of one ten-thousandths of a Preferred Share purchasable
upon exercise of a Right immediately prior to such adjustment
multiplied by the Adjustment Fraction and (ii) the Purchase Price
following such adjustment shall equal the product of the Purchase
Price immediately prior to such adjustment multiplied by the
Adjustment Fraction. The adjustment provided for in this
subsection 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 Company shall promptly (a) prepare
a certificate setting forth such adjustment, and a brief
statement of the facts accounting
- 28 -
for such adjustment, (b) file with the Rights Agent and with each
transfer agent for the Common Shares and the Preferred Shares a
copy of such certificate and (c) mail a brief summary thereof to
each holder of a Rights Certificate in accordance with Section 26
hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any adjustment unless
and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
--------------------------------------------
Assets or Earning Power. (a) In the event that, on or following
-----------------------
the Shares Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any
Interested Stockholder or, if in such merger or consolidation all
holders of Common Shares are not treated alike, any other Person,
(y) the Company shall consolidate with, or merge with, any
Interested Stockholder or, if in such merger or consolidation all
holders of Common Shares are not treated alike, any other Person,
and the Company shall be the continuing or surviving corporation
of such consolidation or merger (other than, in a case of any
transaction described in (x) or (y), a merger or consolidation
which would result in all of the securities generally entitled to
vote in the election of directors ("voting securities") of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into securities of the surviving entity) all of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation and the holders of
such securities not having changed as a result of such merger or
consolidation), or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Interested Stockholder or Person or, if
in such transaction all holders of Common Shares are not treated
alike, any other Person (other than the Company or any Subsidiary
of the Company in one or more transactions each of which does not
violate Section 11(o) hereof), then, and in each such case
(except as provided in Section 13(d) hereof), proper provision
shall be made so that (i) each
- 29 -
holder of a Right (except as provided in Section 7(e) hereof),
shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price, in
accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of freely tradeable Common Shares
of the Principal Party (as hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal, or other
adverse claims, as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one
ten-thousandths of a Preferred Share for which a Right is then
exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii)) and dividing that
product by (B) 50% of the then current per share market price of
the Common Shares of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such Section
13 Event; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all
the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of its Common Shares) in connection with the consummation
of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
---------------
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which Common Shares of
the Company are converted in such merger or consolidation, and if
no securities are so issued, the Person that is the other party
to such merger or consolidation (including, if applicable, the
Company if it is the surviving corporation ); and
- 30 -
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions;
provided, however, that in any of the foregoing cases, (1) if the
Common Shares of such Person are not at such time and have not
been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal
Party" shall refer to such other Person; (2) in case such Person
is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Shares having the greatest
aggregate market value; and (3) in case such Person is owned,
directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to
each of the chains of ownership having an interest in such joint
venture as if such party were a "Subsidiary" of both or all of
such joint venturers and the Principal Parties in each such chain
shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person
bear to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of its authorized Common
Shares which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Right
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer mentioned in paragraph
(a) of this Section 13, the Principal Party at its own expense
shall:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and use
- 31 -
its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights
under the blue sky laws of such jurisdictions as may be necessary
or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all material respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
The rights under this Section 13 shall be in addition to the
rights to exercise Rights and adjustments under Section 11(a)(ii)
and shall survive any exercise thereof.
(d) Notwithstanding anything in this Agreement to the
contrary, the provisions of this Section 13 shall not be
applicable to a transaction described in clauses (x) and (y) of
Section 13(a) if: (i) such transaction is consummated with a
Person or Persons who acquired Common Shares pursuant to a
Permitted Offer (or a wholly owned Subsidiary of any such Person
or Persons); (ii) the price per Common Share offered in such
transaction is not less than the price per Common Share paid to
all holders of Common Shares whose shares were purchased pursuant
to such Permitted Offer; and (iii) the form of consideration
offered in such transaction is the same as the form of
consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current
- 32 -
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 of the Rights for any day
shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock
Exchange, or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported 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 the Nasdaq or such other system
then is 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
Company. 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
Company shall be used and shall be binding as the Rights Agent.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are one ten-
thousandths or integral multiples of one ten-thousandths of a
Preferred Share) upon exercise of the Rights or to issue
certificates which evidence fractional Preferred Shares (other
than fractions that are one ten-thousandths or integral multiples
of one ten-thousandths of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one ten-thousandths of
a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it;
provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as
- 33 -
Beneficial Owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that
are not one ten-thousandths or integral multiples of one ten-
thousandths of a Preferred Share, the Company shall pay to the
registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one Preferred Share.
For purposes of this Section 14(b), the current market value of a
Preferred Share shall be the closing price of a Preferred Share
(as determined pursuant to Section 11(d) hereof) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions or
events specified in Section 11 giving rise to the right to
receive Common Shares, capital stock equivalents (other than
Preferred Shares) or other securities upon the exercise of a
Right, the Company shall not be required to issue fractions of
shares or units of such Common Shares, capital stock equivalents
or other securities upon exercise of the Rights or to distribute
certificates which evidence fractions of such Common Shares,
capital stock equivalents or other securities. In lieu of
fractional shares or units of such Common Shares, capital stock
equivalents or other securities, the Company may pay to the
registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of a share or unit of
such Common Shares, capital stock equivalents or other
securities. For purposes of this Section 14(c), the current
market value shall be determined in the manner set forth in
Section 11(d) hereof for the Trading Day immediately prior to the
date of such exercise, and if such capital stock equivalent is
not traded, each such capital stock equivalent shall have the
value of one ten-thousandth of a Preferred Share.
(d) The holder of a Right by the acceptance of the Rights
expressly waives the 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
- 34 -
respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights
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 Rights Certificate (or, prior to the Distribution
Date, of the Common Shares), may in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of the 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 Rights Holders. Every holder of a
---------------------------
Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent
if surrendered at the principal office or offices of the Rights
Agent designated for such purpose, duly endorsed or accompanied
by a proper instrument of transfer and with the appropriate form
fully executed;
(c) subject to Section 6 and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in
whose name the Rights Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Shares certificate
made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the
- 35 -
Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or a beneficial interest in a
Right or other Person as a result of its inability to perform any
of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission,
or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Rights Certificate Holder Not Deemed a
--------------------------------------
Stockholder. No holder, as such, of any Rights Certificate shall
-----------
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or other
distributions or to exercise any preemptive or subscription
rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with
the provisions hereof.
Section 18. Concerning the Rights Agent. The Company
---------------------------
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise
- 36 -
and performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against
any claim of liability in the premises. The indemnity provided
for herein shall survive the expiration of the Rights and the
termination of this Agreement.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of, any action taken, suffered or
omitted by it in connection with, its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for the Preferred Shares or Common Shares or for other securities
of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person
or Persons.
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 all or substantially all of the corporate trust
business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper 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 Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent
and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not
- 37 -
have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have
the full force provided in the Rights Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name: and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
----------------------
undertakes only those duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Rights Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of an Acquiring Person and the determination of the
current market price of any Security) be proved or established by
the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer, any Assistant
Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate
shall be full authorization to
- 38 -
the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own gross negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates (except its
countersignature on such Rights Certificates) or be required to
verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Section 7(e) hereof) or any adjustment required under
the provisions of Section 11 or Section 13 hereof or responsible
for the manner, method or amount of any such adjustment, or the
ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a certificate
described in Section 12 hereof); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Preferred Shares, Common
Shares or other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any
Preferred Shares, Common Shares or other securities will, when
issued, be validly authorized and issued, fully paid and non-
assessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
- 39 -
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder and certificates delivered pursuant to any provision
hereof from any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the
Secretary, any Assistant Secretary, or the Treasurer or any
Assistant Treasurer of the Company, and is authorized to apply to
such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in actions
while waiting for those instructions. Any application by the
Rights Agent for written instructions from the Company may, at
the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent with respect
to its duties or obligations under this Rights Agreement and the
date on or after which such action shall be taken or 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 therein (which date shall not be less than five
Business Days after the date any such officer of the Company
actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to
taking such action (or the effective date in the case of an
omission), the Rights Agent has received written instructions in
response to such application specifying the action to be taken or
omitted.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, omission, default,
- 40 -
neglect or misconduct of any such attorneys or agents or for any
loss to the Company resulting from any such act, omission,
default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or
indicates an affirmative response to Clause 1 and/or 2 thereof,
the Rights Agent shall not take any further action with respect
to such requested exercise of transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or
----------------------
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common
Shares and Preferred Shares by registered or certified mail, and
to the holders of the Rights Certificates by first-class mail.
The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares and Preferred Shares by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within
a period of 30 days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder
of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the
registered holder of any Rights Certificate may apply to any
court of
- 41 -
competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of any state of
the United States, so long as such corporation complies with the
applicable rules and requirements of the New York Stock Exchange,
as such rules and requirements may be amended or modified from
time to time, is authorized to exercise stock transfer or
corporate trust powers and is subject to supervision or
examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 (or such lower number as approved
by the Board), or (b) an affiliate of a corporation described in
clause (a) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the
Common Shares and Preferred Shares and mail a notice thereof in
writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
-----------------------------------
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights 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
Rights Certificates made in accordance with the provisions of
this Agreement.
- 42 -
In addition, in connection with the issuance or sale of
Common Shares following the Distribution Date and prior to the
earliest of the Redemption Date, the Final Expiration Date and
the consummation of a transaction contemplated by Section 13(d)
hereof, the Company (a) shall with respect to Common Shares so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities, notes or debentures issued
by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the
Company, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however, that (i) the Company shall not be obligated to
issue any such Rights Certificates if, and to the extent that,
the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would
be issued, and (ii) no Rights Certificate shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
--------------------------
(a) (i) The Board of Directors of the Company may, at its
option, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, as such amount
may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the
"Redemption Price"), at any time prior to the earlier of (x) the
----------------
occurrence of a Section 11(a)(ii) Event, or (y) the Final
Expiration Date. The Company may, at its option, pay the
Redemption Price either in Common Shares (based on the "current
per share market price," as defined in Section 11(d)(i) hereof,
of the Common Shares at the time of redemption) or cash; provided
that if the Company elects to pay the Redemption Price in Common
Shares, the Company shall not be required to issue any fractional
Common Shares and the number of Common Shares issuable to each
holder of Rights shall be rounded down to the next whole share.
- 43 -
(ii) Notwithstanding the provisions of Section
23(a)(i), the Board of Directors of the Company may, at its
option, at any time following a Shares Acquisition Date but prior
to any Section 13 Event, redeem all but not less than all of the
then outstanding Rights at the Redemption Price (x) in connection
with any merger, consolidation, or sale or other transfer (in one
transaction or in a series of related transactions) of assets or
earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole), in
which all holders of Common Shares are treated alike and not
involving (other than as a holder of Common Shares being treated
like all other such holders) an Interested Stockholder or (y) if
and for so long as the Acquiring Person is not thereafter the
Beneficial Owner of 15% of the Common Shares, and at the time of
redemption there are no other persons who are Acquiring Persons.
(iii) The Board of Directors of the Company may
only redeem the Rights if at least a majority of the members of
the Board of Directors authorizes such redemption.
(b) In the case of a redemption permitted under Section
23(a)(i), immediately upon the date for redemption set forth (or
determined in the manner specified in) in a resolution of the
Board of Directors of the Company ordering the redemption of the
Rights, evidence of which shall have been filed with the Rights
Agent, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. In the case of a
redemption permitted only under Section 23(a)(ii), evidence of
which shall have been filed with the Rights Agent, the right to
exercise the Rights will terminate and represent only the right
to receive the Redemption Price upon the later of ten Business
Days following the giving of such notice or the expiration of any
period during which the rights under Section 11(a)(ii) may be
exercised. The Company 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 ten (10) days after such date for
redemption set forth in a resolution of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a
notice of
- 44 -
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
Company 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
except in connection with the purchase of Common Shares prior to
the Distribution Date.
(c) The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press
release announcing the manner of redemption of the Rights in
accordance with this Agreement and (ii) mailing payment of the
Redemption Price to the registered holders of the Rights at their
last addresses as they appear on the registry books of the Rights
Agent or, prior the Distribution Date, on the registry books of
the Transfer Agent of the Common Shares, and upon such action,
all outstanding Rights and Rights Certificates shall be null and
void without any further action by the Company.
Section 24. Exchange. (a) Subject to Section 24(e), the
--------
Board of Directors of the Company 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 Sections 7(e) and 11(a)(ii) hereof) for Common
Shares of the Company at an exchange ratio of one Common Share
per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction involving either the Common
Shares or the Preferred Shares 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 Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such
Subsidiary, any entity holding Common Shares for or pursuant to
the terms
- 45 -
of any such plan or any trustee, administrator or fiduciary of
such a plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to
Section 24(a) hereof and without any further action and without
any notice, the right to exercise such Rights shall terminate and
the only right thereafter of a holder of such Rights shall be to
receive that number of Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed
given, whether or not the holder 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 to 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 Sections 7(e) and 11(a)(ii) hereof)
held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term is defined in Section
11(b) hereof) for some or all of the Common Shares exchangeable
for Rights, at the initial rate of one ten-thousandth of a
Preferred Share (or equivalent preferred share) for each Common
Share, as appropriately adjusted to reflect adjustments in the
voting rights of the Preferred Shares pursuant to the terms
thereof, so that the fraction of a Preferred Share delivered in
lieu of each Common Share shall have the same voting rights as
one Common Share.
- 46 -
(d) The Board shall not authorize any exchange transaction
referred to in Section 24(a) hereof unless at the time such
exchange is authorized there shall be sufficient Common Shares or
Preferred Shares issued but not outstanding, or authorized but
unissued, to permit the exchange of Rights as contemplated in
accordance with this Section 24.
(e) The Board of Directors may only exchange Rights
pursuant to Section 24(a) hereof if at least a majority of the
members of the Board of Directors authorizes such exchange.
Section 25. Notice of Certain Events.
------------------------
(a) In case the Company shall propose (i) to pay any
dividend payable in stock of any class to the holders of its
Preferred Shares or to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Preferred Shares
rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) to effect any consolidation or merger
into or with any Person (other than a Subsidiary of the Company
in a transaction which does not violate Section 11(o) hereof), or
to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which does not
violate Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate, in accordance with Section 26 hereof, a notice of
such proposed action to the extent feasible and file a
certificate with the Rights Agent to that effect, 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
- 47 -
therein by the holders of the Preferred 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 twenty
(20) days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of
any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Shares,
whichever shall be the earlier.
(b) In case of a Section 11(a)(ii) Event, then (i) the
Company shall as soon as practicable thereafter give to each
holder of a Rights 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 and (ii) all
references in the preceding paragraph (a) to Preferred Shares
shall be deemed thereafter to refer also to Common Shares and/or,
if appropriate, other securities of the Company.
Section 26. Notices. Notices or demands authorized by this
-------
Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by (i) first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Company), (ii) courier or messenger service,
whether overnight or same day, or (iii) telecopy or facsimile, as
follows:
Tandy Corporation
000 Xxxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, XX 00000
Attention: Corporate Secretary
Facsimile: 000-000-0000
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Rights Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by (i)
first-class mail, postage
- 48 -
prepaid, addressed (until another address is filed in writing
with the Company), (ii) courier or messenger service, whether
overnight or same day, or (iii) telecopy or facsimile, as
follows:
BankBoston, N.A.
c/o EquiServe, Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Client Administration
Facsimile: 000-000-0000
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate or, if prior to the Distribution Date, to the
holder of certificates representing Common Shares shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder
as shown on the registry books of the Company.
Section 27. Supplements and Amendments.
--------------------------
(a) Prior to the Distribution Date, subject to
Section 27(b) hereof, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of Common Shares.
From and after the Distribution Date, subject to Section 27(b)
hereof, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval
of any holders of Rights in order (i) to cure any ambiguity, (ii)
to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to
change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights (other
than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, however, that this Agreement may not
be supplemented or amended to lengthen, pursuant to clause (iii)
of this sentence, (A) a time
- 49 -
period relating to when the Rights may be redeemed at such time
as the Rights are not then redeemable, or (B) any other time
period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights (other than an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person). Upon the
delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment, provided that such
supplement or amendment does not adversely affect the rights or
obligations of the Rights Agent under Section 18 or Section 20 of
this Agreement. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares.
(b) The Company shall not supplement or amend any provision
of this Agreement unless at least a majority of the members of
the Board of Directors authorizes such supplement or amendment.
Section 28. Determination and Actions by the Board of
-----------------------------------------
Directors, etc. The Board of Directors of the Company shall have
--------------
the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the
Board, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation,
the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including,
without limitation, a determination to redeem or not redeem the
Rights or to amend the Agreement and whether any proposed
amendment adversely affects the interests of the holders of
Rights Certificates). For all purposes of this Agreement, any
calculation of the number of Common Shares or other securities
outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common
Shares or any other securities of which any Person is the
Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act as in effect on the date of
this Agreement. All such actions,
- 50 -
calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights Certificates and all
other parties, and (y) not subject the Board to any liability to
the holders of the Rights Certificates.
Section 29. Successors. All the covenants and provisions
----------
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this
--------------------------
Agreement shall be construed to give to any person or corporation
other than the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the Common
Shares).
Section 31. Severability. If any term, provision, covenant
------------
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement, each Right and
-------------
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed
------------
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
- 51 -
Section 34. Descriptive Headings. Descriptive headings of
--------------------
the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
- 52 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
TANDY CORPORATION
By: /s/Xxxxx X. Xxxxxx
______________________
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
and Chief Financial
Officer
BANKBOSTON, N.A., as Rights
Agent
By: /s/Xxxxxx X. XxXxxx
_______________________
Name: Xxxxxx X. XxXxxx
Title: Senior Account Manager
- 53 -
Exhibit A
FORM OF AMENDED CERTIFICATE
OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
of
TANDY CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Tandy Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 103
thereof, DOES HEREBY CERTIFY THAT:
1. No shares of the Corporation's Series A Junior
Participating Preferred Stock have been issued.
2. That pursuant to the authority conferred upon the Board
of Directors by the Restated Certificate of Incorporation of the
Corporation, the Board of Directors on July 24, 1999, adopted the
following resolution amending the Certificate of Designation,
Preferences and Rights filed with the Secretary of State of the
State of Delaware on November 13, 1986 (as amended on June 25,
1990) that sets forth the terms of a series of preferred stock
("Preferred Stock") designated as Series A Junior Participating
Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Corporation by Article FOURTH of the Restated
Certificate of Incorporation, the Certificate of Designations,
Preferences and Rights originally filed with the Secretary of
State of the State of Delaware on November 13, 1986 (and amended
on June 25, 1990) that created a series of preferred stock
designated as "Series A Junior Participating Preferred Stock" of
the Corporation be, and it hereby is, further amended, and that
the designation and amount of the Series A Junior Participating
Preferred Stock and the powers, preferences and relative,
participating, optional and other special rights of the shares of
such series, and the qualifications, limitations or restrictions
thereof are as follows:
Section 1. Designation, Par Value and Amount.
---------------------------------
There shall be a series of preferred stock of the
Corporation designated as the "Series A Junior Participating
Preferred Stock," without par value (the "Series A Preferred Stock"),
------------------------
and the number of shares constituting such series shall
be 300,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, that no
decrease shall
reduce the number of shares of Series A Preferred Stock, to a
number less than that of the shares then outstanding plus the
number of shares issuable upon exercise of outstanding rights,
options or warrants or upon conversion of outstanding securities
issued by the Corporation.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of shares of Common Stock,
par value $1.00 per share (the "Common Stock"), of the
------------
Corporation and any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends
payable in cash on the fifteenth day of March, June, September
and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the
-------------------------------
first Quarterly Dividend Payment Date after the first issuance of
a share or fraction of a share of Series A Preferred Stock in an
amount per share (rounded to the nearest cent) equal to the
greater of (a) $500 or (b) 10,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common
Stock, or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at
any time after July 26, 1999, (i) declare any dividend on the
Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, or (iii) combine or consolidate the
outstanding Common Shares into a smaller number of shares, then
in each such case the amount to which holders of shares of Series
A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of Common Shares outstanding immediately after such
event and the denominator of which is the number of Common Shares
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable
in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $500 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue
of such shares of Series A Preferred Stock, unless the date of
issue of such shares is prior
A-2
to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares
of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share by share basis
among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date
shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of
-------------
Series A Preferred Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall
entitle the holder thereof to 10,000 votes on all matters
submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred Stock and the holders of
shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A
Preferred Stock, shall be in arrears in an amount equal to six
(6) quarterly dividends thereon, the occurrence of such
contingency shall xxxx the beginning of a period (herein called a
"default period") which shall extend until such time when all
--------------
accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all
shares of Series A Preferred Stock, then outstanding shall have
been declared and paid or set apart for payment. During each
default period, the holders of the Series A Preferred Stock with
dividends in arrears in an amount equal to six (6) quarterly
dividends thereon, voting as a class, shall have the right to
elect two (2) directors.
(ii) During any default period, such voting right of
the holders of Series A Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph
(iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the
holders of any other series of preferred stock, if any, to
increase, in certain cases, the authorized number of directors
shall be exercised unless the holders of ten percent (10%) in
number of shares of Series A Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum
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of the holders of Common Stock shall not affect the exercise by
the holders of Series A Preferred Stock of such voting right. At
any meeting at which the holders of Series A Preferred Stock
shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to
elect directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two (2) directors, or if such
right is exercised at an annual meeting, to elect two (2)
directors. If the number of directors which may be so elected at
any special meeting does not amount to the required number, the
holders of the Series A Preferred Stock shall have the right to
make such increase in the number of directors as shall be
necessary to permit the election by them of the required number.
After the holders of the Series A Preferred Stock shall have
exercised their right to elect directors in any default period
and during the continuance of such period, the number of
directors shall not be increased or decreased except by vote of
the holders of Series A Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to
or pari passu with the Series A Preferred Stock.
(iii) Unless the holders of Series A Preferred
Stock shall, during an existing default period, have previously
exercised their right to elect directors, the Board of Directors
may order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of
shares of Series A Preferred Stock outstanding, irrespective of
series, may request, the calling of a special meeting of the
holders of Series A Preferred Stock, which meeting shall
thereupon be called by the Chairman, President, a Vice-President
or the Corporate Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Series A
Preferred Stock are entitled to vote pursuant to this paragraph
(C)(iii) shall be given to each holder of record of Series A
Preferred Stock by mailing a copy of such notice to him or her at
his or her last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier
than 10 days and not later than 60 days after such order or
request or in default of the calling of such meeting within 60
days after such order or request, such meeting may be called on
similar notice by any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of
shares of Series A Preferred Stock outstanding. Notwithstanding
the provisions of this paragraph (C)(iii), no such special
meeting shall be called during the period within 60 days
immediately preceding the date fixed for the next annual meeting
of the stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of directors until the holders of Series A Preferred Stock
shall have exercised their right to elect two (2) directors
voting as a class, after the exercise of which right (x) the
directors so elected by the holders of Series A Preferred Stock
shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except
as provided in paragraph (C)(ii) of this Section 3) be filled by
vote of a majority of the remaining directors theretofor elected
by the holders of the class of stock which elected the director
whose office shall have become vacant. References in this
paragraph
A-4
(C) to directors elected by the holders of a particular class of
stock shall include directors elected by such directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Series A Preferred Stock,
as a class to elect directors shall cease, (y) the term of any
directors elected by the holders of Series A Preferred Stock as a
class shall terminate, and (z) the number of directors shall be
such number as may be provided for in, or pursuant to, the
Restated Certificate of Incorporation or Bylaws irrespective of
any increase made pursuant to the provisions of paragraph (C)
(ii) of this Section 3 (such number being subject, however to
change thereafter in any manner provided by law or in the
Restated Certificate of Incorporation or Bylaws). Any vacancies
in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority
of the remaining directors, even though less than a quorum.
(D) Except as set forth herein (or as otherwise
required by applicable law), holders of Series A Preferred Stock
shall have no general or special voting rights and their consent
shall not be required for taking any corporate action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions on, any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions on, any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts as to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred
Stock;
A-5
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series
-----------------
A Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein, in the Restated
Certificate of Incorporation, in any other Certificate of
Designations, Preferences and Rights creating a series of
Preferred Stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
--------------------------------------
(A) With respect to any liquidation, dissolution or
winding up (voluntary or otherwise) of the Corporation, no
distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $10,000 per share, plus an
amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment
-------------------------------
of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares
of Series A Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share
(the "Common Adjustment") equal to the quotient obtained by
-----------------
dividing (i) the Series A Liquidation Preference by (ii) 10,000
(such number in clause (ii), the "Adjustment Number"). Following
-----------------
the payment of the full amount of the Series A Liquidation
Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common Stock,
respectively, holders of Series A Preferred Stock and holders of
shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis,
respectively.
A-6
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series A Liquidation Preference and the liquidation preferences
of all other series of Preferred Stock, if any, which rank on a
parity with the Series A Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of Series A
Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to
permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of
Common Stock.
(C) In the event the Corporation shall at any time
after July 26, 1999, (i) declare any dividend on the Common Stock
payable in Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine or consolidate the outstanding Common
Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case
--------------------------
the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series A Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to
10,000 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after
July 26, 1999, (i) declare any dividend on the Common Stock
payable in Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine or consolidate the outstanding Common
Stock into a smaller number of shares, then in each such case the
amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that are outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series A
-------------
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Preferred Stock
-------
shall rank junior to all other series of the Corporation's
Preferred Stock as to payment of dividends and the distribution
of assets, unless the terms of any such series shall provide
otherwise.
A-7
Section 10. Amendment. The Restated Certificate
---------
of Incorporation of the Corporation shall not be further amended
in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so
as to affect them adversely without the affirmative vote of the
holders of at least two-thirds (66 2/3%) or more of the
outstanding shares of Series A Preferred Stock, voting together
as a single class.
Section 11. Fractional Shares. Series A Preferred
-----------------
Stock may be issued in fractions of a share, which are one
ten-thousandths or integral multiples of one ten-thousandths of a
share, which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Preferred Stock.
A-8
IN WITNESS WHEREOF, I have executed and subscribed this
Amended Certificate of Designations, Preferences and Rights, as
of this 26th day of July, 1999.
TANDY CORPORATION
By:_______________________
Name:
Title:
A-9
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER July 26, 2009, OR EARLIER
IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE
TERMS SET FORTH IN THE AMENDED AND RESTATED
RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
EXCHANGE, AT THE OPTION OF THE COMPANY, AT ONE
COMMON SHARE PER RIGHT ON THE TERMS SET FORTH IN
THE AMENDED AND RESTATED RIGHTS AGREEMENT. [THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE AMENDED AND
RESTATED RIGHTS AGREEMENT). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME VOID TO THE EXTENT PROVIDED IN
AND UNDER THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF THE AMENDED AND RESTATED RIGHTS
AGREEMENT.]*
Rights Certificate
Tandy Corporation
This certifies that _________________________________,
or registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Amended
and Restated Rights
____________
* The portion of the legend in brackets shall be inserted
only if applicable and shall replace the preceding sentences.
Agreement dated as of July 26, 1999 (the "Rights Agreement")
----------------
between Tandy Corporation, a Delaware corporation (the
"Company"), and BankBoston, N.A. (the "Rights Agent"), to
------- ------------
purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to
5:00 P.M. (Boston, Massachusetts Time) on July 26, 2009 at the
principal office or offices of the Rights Agent designated for
such purpose, or at the office of its successor as Rights Agent,
one ten-thousandth of a fully-paid, nonassessable share of Series
A Junior Participating Preferred Stock, without par value (the
"Preferred Shares"), of the Company, at a purchase price of $250
----------------
per one ten-thousandth of a Preferred Share (the "Purchase
--------
Price"), upon presentation and surrender of this Rights
-----
Certificate with the appropriate Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one ten-thousandths of a Preferred
Share which may be purchased upon exercise thereof) set forth
above, and the Purchase Price set forth above, are the number and
Purchase Price as of July 26, 1999, based on the Preferred Shares
as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as
such term is defined in the Rights Agreement), if the Rights
evidenced by this Rights Certificate are beneficially owned by
(i) an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate who becomes a transferee after the
Acquiring Person becomes such, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of
any such Acquiring Person, Associate or Affiliate who becomes a
transferee prior to or concurrently with the Acquiring Person
becoming such, the Rights of such persons shall become null and
void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price
and the number of one ten-thousandths of a Preferred Share or
other securities which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to
modification and
B-2
adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights
Agreement).
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof, and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the offices of the Rights
Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal or other office of
the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of Preferred Shares or other securities
as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to
purchase. If this Rights Certificate shall be exercised (other
than pursuant to Section 11(a)(ii) of the Rights Agreement) in
part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised or shall be entitled to
receive this Rights Certificate duly marked to indicate that such
exercise has occurred as set forth in the Rights Agreement. If
this Rights Certificate shall be exercised in whole or in part
pursuant to Section 11(a)(ii) of the Rights Agreement, the holder
shall be entitled to receive this Rights Certificate duly marked
to indicate that such exercise has occurred as set forth in the
Rights Agreement.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right
(subject to adjustment as provided in the Rights Agreement)
payable in cash, or, at the
B-3
Company's option, shares of Common Stock. Subject to the
provisions of the Rights Agreement, the Company, at its option,
may elect to issue a press release announcing the manner of
redemption and to mail payment of the redemption price to the
registered holder of the Right at the time of redemption, in
which event this certificate may become void without any further
action by the Company.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than
fractions which are one ten-thousandth or integral multiples of
one ten-thousandth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of the Preferred Shares or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to
receive dividends or other distributions or to exercise any
preemptive or subscription rights, or otherwise, until the Right
or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
B-4
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of ___________,
__
ATTEST: TANDY CORPORATION
________________________ By:____________________
Name: Name:
Title: Title:
Countersigned:
BANKBOSTON, N.A.,
as Rights Agent
By: ______________________
Name:
Title:
B-5
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED __________________________________________________
hereby sells, assigns and transfers unto_____________________________
_____________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint_____________________ Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated: ____________________ , __
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.
B-6
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being sold, assigned and transferred by
or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _______________ , ___ _____________________________
Signature
NOTICE
______
The signature to the foregoing Assignment must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
B-7
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder
if such holder desires to exercise Rights
represented by the Rights Certificate.)
To Tandy Corporation:
The undersigned hereby irrevocably elects to exercise
_______________ Rights represented by this Rights Certificate to
purchase the Preferred Shares, Common Shares or other securities
of the Company issuable upon the exercise of the Rights and
requests that certificates for such Preferred Shares, Common
Shares or other securities be issued in the name of:
_____________________________________________________________________
(Please print name and address)
_____________________________________________________________________
_____________________________________________________________________
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance
remaining of such Rights or this Rights Certificate indicating
the balance remaining of such Rights shall be returned and shall
be registered in the name of and delivered to:
_____________________________________________________________________
(Please print name and address)
_____________________________________________________________________
_____________________________________________________________________
Please insert social security or other identifying number
(complete only if Rights Certificate is to be registered in a
name other than the undersigned)
Dated:_______________ ,___ ____________________________
Signature
B-8
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.
Certificate
-----------
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being exercised by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined pursuant to the
Rights Agreement); and
(3) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _____________ ,___ ________________________
Signature
B-9
NOTICE
------
The signature to the foregoing Election to Purchase must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
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 (as defined in the Rights
Agreement) of the Rights evidenced by this Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-10
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On July 24, 1999, the Board of Directors of Tandy
Corporation approved an Amended and Restated Rights Agreement
with BankBoston, N.A., as Rights Agent. This agreement amends and
restates the rights agreement between Tandy Corporation and The
First National Bank of Boston (n/k/a BankBoston, N.A.), dated as
of August 15, 1986, and amended on June 24, 1988 and June 22,
1990. The Amended and Restated Rights Agreement:
* extends the term of the rights for ten years;
* increases the purchase price of the rights to
today's equivalent of $250 per right;
* removes the delayed amendment and delayed redemption
provisions;
* reduces the fraction of a share of preferred stock issuable
upon exercise of each right from 1/1,000th to 1/10,000th;
* adds an exchange option for the rights;
* adjusts the redemption price from $.05 per right to $.01 per
right; and
* makes other modifications to the terms of the rights.
This summary of the rights is not a full description of the
rights agreement or the terms of the rights. For a more complete
description, you should read the Amended and Restated Rights
Agreement, dated as of July 26, 1999, between Tandy and
BankBoston, N.A., as Rights Agent. We have filed a copy of the
Amended and Restated Rights Agreement with the Securities and
Exchange Commission as an exhibit to our Registration Statement
on Form 8-A. You may also request a copy of the Amended and
Restated Rights Agreement free of charge from Tandy Corporation,
000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxx 00000,
Attention: Corporate Secretary or you may obtain a copy by
accessing the Securities and Exchange Commission website at
xxxx://xxx.xxx.xxx.
A. Rights and Rights Certificates
------------------------------
The rights are attached to and trade with your shares of
Tandy common stock. Currently, there are no separate
certificates representing the rights. If the rights become
exercisable, we will distribute separate rights certificates.
Until that time, as long as the rights remain outstanding, any
transfer of shares of Tandy common stock will also constitute the
transfer of the rights associated with those shares of common
stock.
The rights will become exerciseable upon the earlier to
occur of:
* the public announcement that a person or group of persons
has acquired 15% or more of Tandy's outstanding common stock,
except in connection with an offer approved by the Board of
Directors; or
* the close of business on the tenth business day, or a later
date determined by the Board of Directors, after the commencement
of, or announcement of an intention to commence, a tender or
exchange offer that would result in a person or group of persons
acquiring 15% or more of Tandy's outstanding common stock.
B. Expiration of Rights
--------------------
The rights will expire at 5:00 P.M., Texas time, on July
26, 2009, unless we redeem or exchange the rights before that
date.
C. Flip-In Right
-------------
If any person or group of persons acquires 15% or more
of Tandy's outstanding common stock, each holder of a right,
except the acquiring person, will have the right to receive the
number of shares of common stock, one ten-thousandths of a share
of preferred stock or other securities of Tandy with a value
equal to two times the purchase price of the rights (the "flip-in
right"). -------
-----
For example, if the rights are triggered, each holder of a
right may purchase shares of common stock or common stock equivalents
worth $500 for $250, which is the purchase price of the rights.
How to calculate at an assumed market price of $50:
$250 (your purchase price) x $50 = 5 shares
5 shares x 2 (flip-in right) = 10 shares
10 shares x $50 = $500 (value of Tandy common stock that you
would receive upon exercise of the flip-in right).
D. Offers Approved by Tandy's Board of Directors.
---------------------------------------------
A person or group of persons who acquire 15% or more of
Tandy's stock will not trigger the rights if a majority of the
members of Tandy's Board of Directors has approved the offer and
determined that it is in the best interests of Tandy and its
shareholders.
C-2
E. Flip-Over Right
---------------
If at any time after the flip-in rights are triggered and any
of the situations listed below occur, then each holders of a right, except
a person holding 15% or more of its common stock, or any of that person's
affiliates or associates (an "interested stockholder"), may purchase,
----------------------
upon the exercise of each right at the then-current purchase price, that
number of shares of common stock of the acquiring or surviving company
with a market value equal to two times the purchase price.
Flip-over rights are triggered when:
-----------------------------------
* Tandy consolidates with or merges into an interested stockholder,
or any other entity if all holders of Tandy's common stock are
not treated alike in the transaction;
* an interested stockholder, or any other entity if all
holders of Tandy's common stock are not treated alike in the
transaction, consolidates with or merges into Tandy; or
* Xxxxx xxxxx or otherwise transfers to an interested
stockholder, or to any other entity if all holders of Tandy's
common stock are not treated alike in the transaction, 50% or
more of its assets or earning power.
F. Redemption of Rights
--------------------
We may redeem the rights at any time before the earlier
of the date that the flip-in rights are triggered and the
expiration of the rights. We may also redeem the rights
under certain circumstances after the flip-in right has been
triggered but before the expiration of any period during which
the flip-in right may be exercised.
The redemption price is $.01 per right. Upon the
effective date of the redemption of the rights, the rights will
terminate and rights holders will only be entitled to receive the
redemption price. We may only redeem rights if a majority of the
members of the Board of Directors authorizes the redemption.
C-3
G. Exchange of Rights
------------------
After a person or group of persons acquires 15% of
Tandy's outstanding common stock but before that person or group
beneficially owns 50% or more of Tandy's common stock, we may, at
our option, exchange the rights at an exchange ratio of one share
of common stock per right, adjusted to reflect any stock split,
stock dividend or similar transaction involving either the common
stock or the preferred stock. Rights held by an acquiring person
are not entitled to these exchange rights. We may only exchange
rights if a majority of the members of the Board of Directors
authorizes the exchange.
H. Adjustments
-----------
If, at any time before the rights are triggered, we
split, subdivide, combine or consolidate our common stock, or
declare a dividend on our common stock payable in common stock
then, to prevent dilution of the rights, we will adjust either:
* the number of rights associated with each share of common
stock outstanding or
* the fraction of a share of preferred stock issuable upon
exercise of each right.
In addition, the purchase price payable and/or the
number of shares of preferred stock or other securities issuable
upon exercise of the rights may be adjusted to prevent dilution
upon:
* stock splits, stock dividends, subdivisions, combinations or
reclassifications of the preferred stock,
* below market issuances of preferred stock or rights or
warrants to subscribe for or convert into preferred stock, or
* distributions to holders of the preferred stock of evidence
of indebtedness or assets (excluding regular quarterly cash
dividends or dividends payable in preferred stock) or of
subscription rights or warrants, with some exceptions.
I. The Preferred Stock
-------------------
The preferred stock purchasable upon exercise of the
rights is designated as "Series A Junior Participating Preferred
Stock." The terms of the Series A Junior Participating Preferred
Stock are contained in an Amended Certificate of Designations,
Rights and Preferences filed with the Secretary of State of the
State of Delaware.
C-4
