STOCKHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
February 13, 1997
between
KLLM TRANSPORT SERVICES, INC.
and
KeyCorp Shareholder Services, Inc.,
as Rights Agent
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
Article I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions 2
Article II
THE RIGHTS
Section 2.1 Summary of Rights 8
Section 2.2 Legend on Common Stock
Certificates 8
Section 2.3 Exercise of Rights;
Separation of Rights 9
Section 2.4 Adjustments to Exercise Price; Number of
Rights 12
Section 2.5 Date on Which Exercise is Effective 13
Section 2.6 Execution, Authentication, Delivery and
Dating of Rights Certificates 14
Section 2.7 Registration, Registration of Transfer and
Exchange 14
Section 2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates 15
Section 2.9 Persons Deemed Owners 16
Section 2.10 Delivery and Cancellation of Certificates 17
Section 2.11 Agreement of Rights Holders 17
Article III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
Section 3.1 Flip-in 18
Section 3.2 Flip-over 21
Article IV
THE RIGHTS AGENT
Section 4.1 General 22
Section 4.2 Merger or Consolidation or Change of Name of
Rights Agent 22
Section 4.3 Duties of Rights Agent 23
Section 4.4 Change of Rights Agent 26
Article V
MISCELLANEOUS
Section 5.1 Redemption 27
Section 5.2 Expiration 28
Section 5.3 Issuance of New Rights Certificates 28
Section 5.4 Supplements and Amendments 29
Section 5.5 Fractional Shares 29
Section 5.6 Rights of Action 29
Section 5.7 Holder of Rights Not Deemed a Stockholder 30
Section 5.8 Notice of Proposed Actions 30
Section 5.9 Notices 31
Section 5.10 Suspension of Exercisability 31
Section 5.11 Costs of Enforcement 32
Section 5.12 Successors 32
Section 5.13 Benefits of this Agreement 32
Section 5.14 Determination and Actions by the Board of
Directors, etc 32
Section 5.15 Descriptive Headings 33
Section 5.16 Governing Law 33
Section 5.17 Counterparts 33
Section 5.18 Severability 33
EXHIBITS
Exhibit A Form of Rights Certificate (Together with Form of
Election to Exercise)
Exhibit B Form of Certificate of Designation and Terms of
Participating Preferred Stock
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended
from time to time, this "Agreement"), dated as of February 13, 1997,
between KLLM Transport Services, Inc., a Delaware
corporation (the "Company"), and KeyCorp Shareholder
Services, Inc., an Ohio corporation, as Rights Agent (the
"Rights Agent", which term shall include any successor
Rights Agent hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (a)
authorized and declared a dividend of one right ("Right") in
respect of each share of Common Stock (as hereinafter
defined) held of record as of the close of business on
February 24, 1997 (the "Record Time") and (b) as provided in
Section 2.4, authorized the issuance of one Right in respect
of each share of Common Stock issued after the Record Time
and prior to the Separation Time (as hereinafter defined)
and, to the extent provided in Section 5.3, each share of
Common Stock issued after the Separation Time;
WHEREAS, subject to Sections 3.1, 5.1 and 5.10, each Right
entitles the holder thereof, after the Separation Time, to
purchase securities of the Company (or, in certain cases, of
certain other entities) pursuant to the terms and subject to
the conditions set forth herein; and WHEREAS, the Company desires
to appoint the Rights Agent to act on behalf of the Company, and
the Rights Agent is willing so to act, in connection with the issuance,
transfer, exchange and replacement of Rights Certificates
(as hereinafter defined), the exercise of Rights and other
matters referred to herein;
NOW THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby
agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 20% or more of the outstanding shares of Common
Stock; provided, however, that the term "Acquiring Person"
shall not include any Person (i) who is the Beneficial Owner
of 20% or more of the outstanding shares of Common Stock on
the date of this Agreement or who shall become the
Beneficial Owner of 20% or more of the outstanding shares of
Common Stock solely as a result of an acquisition by the
Company of shares of Common Stock, until such time hereafter
or thereafter as any of such Persons shall become the
Beneficial Owner (other than by means of a stock dividend or
stock split) of any additional shares of Common Stock, (ii)
who is the Beneficial Owner of 20% or more of the
outstanding shares of Common Stock but who acquired
Beneficial Ownership of shares of Common Stock without any
plan or intention to seek or affect control of the Company,
if such Person promptly enters into an irrevocable
commitment promptly to divest, and thereafter promptly
divests (without exercising or retaining any power,
including voting, with respect to such shares), sufficient
shares of Common Stock (or securities convertible into,
exchangeable into or exercisable for Common Stock) so that
such Person ceases to be the Beneficial Owner of 20% or more
of the outstanding shares of Common Stock or (iii) who
Beneficially Owns shares of Common Stock consisting solely
of one or more of (A) shares of Common Stock Beneficially
Owned pursuant to the grant or exercise of an option granted
to such Person by the Company in connection with an
agreement to merge with, or acquire, the Company at a time
entered into prior to a Flip-in Date, (B) shares of Common
Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock), Beneficially Owned by such
Person or its Affiliates or Associates at the time of grant
of such option or (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for
Common Stock) acquired by Affiliates or Associates of such
Person after the time of such grant which, in the aggregate,
amount to less than 1% of the outstanding shares of Common
Stock. In addition, the Company, any wholly-owned
Subsidiary of the Company and any employee stock ownership
or other employee benefit plan of the Company or a
wholly-owned Subsidiary of the Company shall not be an
Acquiring Person.
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the
Securities Exchange Act of 1934, as such Rule is in effect
on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any
securities as to which such Person or any of such Person's
Affiliates or Associates is or may be deemed to be the
beneficial owner of pursuant to Rule 13d-3 and 13d-5 under
the Securities Exchange Act, as such Rules are in effect on
the date of this Agreement as well as any securities as to
which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether
such right is exercisable immediately or only after the
passage of time or the occurrence of conditions) 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", or to have "Beneficial Ownership" of, or
to "Beneficially Own", any security (i) solely because such
security has been tendered pursuant to a tender or exchange
offer made by such Person or any of such Person's Affiliates
or Associates until such tendered security is accepted for
payment or exchange or (ii) solely because such Person or
any of such Person's Affiliates or Associates has or shares
the power to vote or direct the voting of such security
pursuant to a revocable proxy given in response to a public
proxy or consent solicitation made to more than ten holders
of shares of a class of stock of the Company registered
under Section 12 of the Securities Exchange Act of 1934 and
pursuant to, and in accordance with, the applicable rules
and regulations under the Securities Exchange Act of 1934,
except if such power (or the arrangements relating thereto)
is then reportable under Item 6 of Schedule 13D under the
Securities Exchange Act of 1934 (or any similar provision of
a comparable or successor report). For purposes of this
Agreement, in determining the percentage of the outstanding
shares of Common Stock with respect to which a Person is the
Beneficial Owner, all shares as to which such Person is
deemed the Beneficial Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in Jackson,
Mississippi are generally authorized or obligated by law or
executive order to close.
"Close of business" on any given date shall mean 5:00 p.m.
Jackson, Mississippi time on such date (or, if such date is
not a Business Day, 5:00 p.m. Jackson, Mississippi time on
the next succeeding Business Day).
"Common Stock" shall mean the shares of Common Stock, par
value $1.00 per share, of the Company.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section
3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon
exercise of one whole Right. Until adjustment thereof in
accordance with the terms hereof, the Exercise Price shall
equal $ 41.00.
"Expiration Time" shall mean the earliest of (i) the
Exchange Time, (ii) the Redemption Time, (iii) the close of
business on the tenth-year anniversary of the Record Time,
and (iv) upon the merger of the Company into another
corporation pursuant to an agreement entered into prior to a
Flip-in Date.
"Flip-in Date" shall mean the tenth business day after any
Stock Acquisition Date or such earlier or later date as the
Board of Directors of the Company may from time to time fix
by resolution adopted prior to the Flip-in Date that would
otherwise have occurred.
"Flip-over Entity" for purposes of Section 3.2, shall mean
(i) in the case of a Flip-over Transaction or Event
described in clause (i) of the definition thereof, the
Person issuing any securities into which shares of Common
Stock are being converted or exchanged and, if no such
securities are being issued, the other party to such
Flip-over Transaction or Event and (ii) in the case of a
Flip-over Transaction or Event referred to in clause (ii) of
the definition thereof, the Person receiving the greatest
portion of the assets or earning power being transferred in
such Flip-over Transaction or Event, provided in all cases
if such Person is a subsidiary of a corporation, the parent
corporation shall be the Flip-Over Entity.
"Flip-over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect
of the election of directors (or other persons similarly
responsible for direction of the business and affairs) of
the Flip-Over Entity.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions after a Flip-in Date in which,
directly or indirectly, (i) the Company shall consolidate or
merge or participate in a share exchange with any other
Person if, at the time of the consolidation, merger or share
exchange or at the time the Company enters into any
agreement with respect to any such consolidation, merger or
share exchange, the Acquiring Person Controls the Board of
Directors of the Company and either (A) any term of or
arrangement concerning the treatment of shares of capital
stock in such consolidation, merger or share exchange
relating to the Acquiring Person is not identical to the
terms and arrangements relating to other holders of the
Common Stock or (B) the Person with whom the transaction or
series of transactions occurs is the Acquiring Person or an
Affiliate or Associate of the Acquiring Person or (ii) the
Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer) assets
(A) aggregating more than 50% of the assets (measured by
either book value or fair market value) or (B) generating
more than 50% of the operating income or cash flow, of the
Company and its Subsidiaries (taken as a whole) to any
Person (other than the Company or one or more of its wholly
owned Subsidiaries) or to two or more such Persons which are
Affiliates or Associates or otherwise acting in concert, if,
at the time of the entry by the Company (or any such
Subsidiary) into an agreement with respect to such sale or
transfer of assets, the Acquiring Person Controls the Board
of Directors of the Company. An Acquiring Person shall be
deemed to Control the Company's Board of Directors when,
following a Flip-in Date, the persons who were directors of
the Company before the Flip-in Date shall cease to
constitute a majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of
such securities (determined as described below) on each of
the 20 consecutive Trading Days through and including the
Trading Day immediately preceding such date; provided,
however, that if an event of a type analogous to any of the
events described in Section 2.4 hereof shall have caused the
closing prices used to determine the Market Price on any
Trading Days during such period of 20 Trading Days not to be
fully comparable with the closing price on such date, each
such closing price so used shall be appropriately adjusted
in order to make it fully comparable with the closing price
on such date. The closing price per share of any securities
on any date shall be the last reported sale price, regular
way, or, in case no such sale takes place or is quoted on
such date, the average of the closing bid and asked prices,
regular way, for each share of such securities, 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, Inc. or,
if the securities are not listed or admitted to trading on
the New York Stock Exchange, Inc., as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the securities are listed or
admitted to trading or, if the securities are not listed or
admitted to trading on any national securities exchange, as
reported by the National Association of Securities Dealers,
Inc. Automated Quotation System or such other system then in
use, or, if on any such date the securities are not listed
or admitted to trading on any national securities exchange
or 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 securities selected by
the Board of Directors of the Company; provided, however,
that if on any such date the securities are not listed or
admitted to trading on a national securities exchange or
traded in the over-the-counter market, the closing price per
share of such securities on such date shall mean the fair
value per share of securities on such date as determined in
good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking
firm, and set forth in a certificate delivered to the Rights
Agent.
"Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under
the Securities Exchange Act of 1934, as such Rule is in
effect on the date of this Agreement), corporation or other
entity.
"Preferred Stock" shall mean the series of Participating
Preferred Stock, par value $0.01 per share, of the Company
created by a Certificate of Designation and Terms in
substantially the form set forth in Exhibit B hereto
appropriately completed.
"Redemption Price" shall mean an amount equal to one cent,
$0.01.
"Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1
hereof.
"Separation Time" shall mean the close of business on the
earlier of (i) the tenth business day (or such later date as
the Board of Directors of the Company may from time to time
fix by resolution adopted prior to the Separation Time that
would otherwise have occurred) after the date on which any
Person commences a tender or exchange offer which, if
consummated, would result in such Person's becoming an
Acquiring Person and (ii) the Flip-in Date; provided, that
if the foregoing results in the Separation Time being prior
to the Record Time, the Separation Time shall be the Record
Time and provided further, that if any tender or exchange
offer referred to in clause (i) of this paragraph is
cancelled, terminated or otherwise withdrawn prior to the
Separation Time without the purchase of any shares of Common
Stock pursuant thereto, such offer shall be deemed, for
purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring
Person has become such.
"Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the
voting power of the equity securities or a majority of the
equity interest is Beneficially Owned, directly or
indirectly, by such Person.
"Trading Day" when used with respect to any securities,
shall mean a day on which the New York Stock Exchange, Inc.
is open for the transaction of business or, if such
securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal
national securities exchange on which such securities are
listed or admitted to trading is open for the transaction of
business or, if such securities are not listed or admitted
to trading on any national securities exchange, a Business
Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the
Record Time, the Company will mail a letter summarizing the
terms of the Rights to each holder of record of Common Stock
as of the Record Time, at such holder's address as shown by
the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for
the Common Stock issued after the Record Time but prior to
the Separation Time shall evidence one Right for each share
of Common Stock represented thereby and shall have impressed
on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights
Agreement referred to below), this certificate also
evidences and entitles the holder hereof to certain Rights
as set forth in a Rights Agreement, dated as of February 13,
1997 (as such may be amended from time to time, the "Rights
Agreement"), between KLLM Transport Services, Inc. (the
"Company") and KeyCorp Shareholder Services, Inc., as Rights
Agent, the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal
executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may become exercisable for
securities or assets of the Company or of another entity,
may be exchanged for shares of Common Stock or other
securities or assets of the Company or a Subsidiary of the
Company, may expire, may become void (if they are
"Beneficially Owned" by an "Acquiring Person" or an
Affiliate or Associate thereof, as such terms are defined in
the Rights Agreement, or by any transferee of any of the
foregoing) or may be evidenced by separate certificates and
may no longer be evidenced by this certificate. The Company
will mail or arrange for the mailing of a copy of the Rights
Agreement to the holder of this certificate without charge
promptly after the receipt of a written request therefor.
Certificates representing shares of Common Stock that are
issued and outstanding at the Record Time shall evidence one
Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights. (a) Subject
to Sections 3.1, 5.1 and 5.10 and subject to adjustment as
herein set forth, each Right will entitle the holder
thereof, after the Separation Time and prior to the
Expiration Time, to purchase, for the Exercise Price, one
one-hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be
exercised and (ii) each Right will be evidenced by the
certificate for the associated share of Common Stock
(together, in the case of certificates issued prior to the
Record Time, with the letter or notice mailed to the record
holder thereof pursuant to Section 2.1) and will be
transferable only together with, and will be transferred by
a transfer (whether with or without such letter or notice)
of, such associated share.
(c) Subject to this Section 2.3 and to Sections 3.1, 5.1
and 5.10, after the Separation Time and prior to the
Expiration Time, the Rights (i) may be exercised and (ii)
may be transferred independent of shares of Common Stock.
Promptly following the Separation Time, the Rights Agent
will mail to each holder of record of Common Stock as of the
Separation Time (other than any Person whose Rights have
become void pursuant to Section 3.1(b)), at such holder's
address as shown by the records of the Company (the Company
hereby agreeing to furnish copies of such records to the
Rights Agent for this purpose), (x) a certificate (a "Rights
Certificate") in substantially the form of Exhibit A hereto
appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having 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 law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any
national securities exchange or quotation system on which
the Rights may from time to time be listed or traded, or to
conform to usage, and (y) a disclosure statement describing
the Rights.
(d) Subject to Sections 3.1, 5.1 and 5.10, Rights may be
exercised on any Business Day after the Separation Time and
prior to the Expiration Time by submitting to the Rights
Agent the Rights Certificate evidencing such Rights with an
Election to Exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate
duly completed, accompanied by payment in cash, or by
certified or official bank check or money order payable to
the order of the Company, of a sum equal to the Exercise
Price multiplied by the number of Rights being exercised and
a sum sufficient to cover any transfer tax or charge which
may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance
or delivery of certificates for shares or depositary
receipts (or both) in a name other than that of the holder
of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election
to Exercise accompanied by payment as set forth in Section
2.3(d), and subject to Sections 3.1, 5.1 and 5.10, the
Rights Agent will thereupon promptly (i)(A) requisition from
a transfer agent stock certificates evidencing such number
of shares or other securities to be purchased (the Company
hereby irrevocably authorizing its transfer agents to comply
with all such requisitions) and (B) if the Company elects
pursuant to Section 5.5 not to issue certificates
representing fractional shares, requisition from the
depositary selected by the Company depositary receipts
representing the fractional shares to be purchased or
requisition from the Company the amount of cash to be paid
in lieu of fractional shares in accordance with Section 5.5
and (ii) after receipt of such certificates, depositary
receipts and/or cash, deliver the same to or upon the order
of the registered holder of such Rights Certificate,
registered (in the case of certificates or depositary
receipts) in such name or names as may be designated by such
holder.
(f) In case the holder of any Rights shall exercise less
than all the Rights evidenced by such holder's Rights
Certificate, a new Rights Certificate evidencing the Rights
remaining unexercised will be issued by the Rights Agent to
such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take
all such action as may be necessary to ensure that all
shares delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid
and nonassessable; (ii) take all such action as may be
necessary to comply with any applicable requirements of the
Securities Act of 1933 or the Securities Exchange Act of
1934, and the rules and regulations thereunder, and any
other applicable law, rule or regulation, in connection with
the issuance of any shares upon exercise of Rights; and
(iii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect
of the original issuance or delivery of the Rights
Certificates or of any shares issued upon the exercise of
Rights, provided that the Company shall not be required to
pay any transfer tax or charge which may be payable in
respect of any transfer involved in the transfer or delivery
of Rights Certificates or the issuance or delivery of
certificates for shares in a name other than that of the
holder of the Rights being transferred or exercised.
2.4 Adjustments to Exercise Price: Number of Rights. (a) In
the event the Company shall at any time after the Record
Time and prior to the Separation Time (i) declare or pay a
dividend on Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares of
Common Stock, (x) the Exercise Price in effect after such
adjustment will be equal to the Exercise Price in effect
immediately prior to such adjustment divided by the number
of shares of Common Stock (the "Expansion Factor") that a
holder of one share of Common Stock immediately prior to
such dividend, subdivision or combination would hold
thereafter as a result thereof and (y) each Right held prior
to such adjustment will become that number of Rights equal
to the Expansion Factor, and the adjusted number of Rights
will be deemed to be distributed among the shares of Common
Stock with respect to which the original Rights were
associated (if they remain outstanding) and the shares
issued in respect of such dividend, subdivision or
combination, so that each such share of Common Stock will
have exactly one Right associated with it. Each adjustment
made pursuant to this paragraph shall be made as of the
payment or effective date for the applicable dividend,
subdivision or combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue any shares of
Common Stock otherwise than in a transaction referred to in
the preceding paragraph, each such share of Common Stock so
issued shall automatically have one new Right associated
with it, which Right shall be evidenced by the certificate
representing such share. To the extent provided in Section
5.3, Rights shall be issued by the Company in respect of
shares of Common Stock that are issued or sold by the
Company after the Separation Time.
(b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or
distribute any securities or assets in respect of, in lieu
of or in exchange for Common Stock (other than pursuant to a
regular periodic cash dividend or a dividend paid solely in
Common Stock) whether by dividend, in a reclassification or
recapitalization (including any such transaction involving a
merger, consolidation or share exchange), or otherwise, the
Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property
purchasable upon exercise of Rights as the Board of
Directors of the Company, in its sole discretion, may deem
to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights
generally, and the Company and the Rights Agent shall amend
this Agreement as necessary to provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent.
Whenever an adjustment to the Exercise Price is made
pursuant to this Section 2.4, the Company shall (i) promptly
prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment,
and (ii) promptly file with the Rights Agent and with each
transfer agent for the Common Stock a copy of such
certificate.
(d) Rights Certificates shall represent the securities
purchasable under the terms of this Agreement, including any
adjustment or change in the securities purchasable upon
exercise of the Rights, even though such certificates may
continue to express the securities purchasable at the time
of issuance of the initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each person in
whose name any certificate for shares is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares represented
thereby on the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of
the Exercise Price for such Rights (and any applicable taxes
and other governmental charges payable by the exercising
holder hereunder) was made; provided, however, that if the
date of such surrender and payment is a date upon which the
stock transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next
succeeding Business Day on which the stock transfer books of
the Company are open.
2.6 Execution, Authentication, Delivery and Dating of
Rights Certificates. (a)The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the
Board, President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary
or one of its Assistant Secretaries. The signature of any
of these officers on the Rights Certificates may be manual
or facsimile.
Rights Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper
officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature
and delivery of such Rights Certificates.
Promptly after the Separation Time, the Company will notify
the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Company to the Rights
Agent for countersignature, and, subject to Section 3.1(b),
the Rights Agent shall manually countersign and deliver such
Rights Certificates to the holders of the Rights pursuant to
Section 2.3(c) hereof. No Rights Certificate shall be valid
for any purpose unless manually countersigned by the Rights
Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange.
(a) After the Separation Time, the Company will cause to be
kept a register (the "Rights Register") in which, subject to
such reasonable regulations as it may prescribe, the Company
will provide for the registration and transfer of Rights.
The Rights Agent is hereby appointed "Rights Registrar" for
the purpose of maintaining the Rights Register for the
Company and registering Rights and transfers of Rights after
the Separation Time as herein provided. In the event that
the Rights Agent shall cease to be the Rights Registrar, the
Rights Agent will have the right to examine the Rights
Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of
any Rights Certificate, and subject to the provisions of
Section 2.7(c) and (d), the Company will execute, and the
Rights Agent will countersign and deliver, in the name of
the holder or the designated transferee or transferees, as
required pursuant to the holder's instructions, one or more
new Rights Certificates evidencing the same aggregate number
of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all
Rights issued upon any registration of transfer or exchange
of Rights Certificates shall be the valid obligations of the
Company, and such Rights shall be entitled to the same
benefits under this Agreement as the Rights surrendered upon
such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration
of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer in form
satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the
issuance of any new Rights Certificate under this Section
2.7, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be
imposed in relation thereto.
(d) The Company shall not be required to register the
transfer or exchange of any Rights after such Rights have
become void under Section 3.1(b), been exchanged under
Section 3.1(c) or been redeemed or terminated under Section
5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates. (a) If any mutilated Rights Certificate is
surrendered to the Rights Agent prior to the Expiration
Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the
Company shall execute and the Rights Agent shall countersign
and deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(b) If there shall be delivered to the Company and the
Rights Agent prior to the Expiration Time (i) evidence to
their satisfaction of the destruction, loss or theft of any
Rights Certificate and (ii) such security or indemnity as
may be required by them to save each of them and any of
their agents harmless, then, subject to Sections 3.1(b),
3.1(c) and 5.1 and in the absence of notice to the Company
or the Rights Agent that such Rights Certificate has been
acquired by a bona fide purchaser, the Company shall execute
and upon its request the Rights Agent shall countersign and
deliver, in lieu of any such destroyed, lost or stolen
Rights Certificate, a new Rights Certificate evidencing the
same number of Rights as did the Rights Certificate so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require
the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of
the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights
Certificate shall evidence an original additional
contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any
time enforceable by anyone, and, subject to Section 3.1(b),
shall be entitled to all the benefits of this Agreement
equally and proportionately with any and all other Rights
duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the
associated Common Stock certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in
whose name such Rights Certificate (or, prior to the
Separation Time, such Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any
notice to the contrary. As used in this Agreement, unless
the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or,
prior to the Separation Time, the associated shares of
Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration
of transfer or exchange shall, if surrendered to any person
other than the Rights Agent, be delivered to the Rights
Agent and, in any case, shall be promptly cancelled by the
Rights Agent. The Company may at any time deliver to the
Rights Agent for cancellation any Rights Certificates
previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled
by the Rights Agent. No Rights Certificates shall be
countersigned in lieu of or in exchange for any Rights
Certificates cancelled as provided in this Section 2.10,
except as expressly permitted by this Agreement. The Rights
Agent shall return all cancelled Rights Certificates to the
Company.
2.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company and
the Rights Agent and with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by
a transfer of, the associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates will
be transferable only on the Rights Register as provided
herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the
Rights Agent and any agent of the Company or the Rights
Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Separation Time, the
associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the
contrary;
(d) Rights beneficially owned by certain Persons will,
under the circumstances set forth in Section 3.1(b), become
void; and
(e) this Agreement may be supplemented or amended from time
to time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration
Time a Flip-in Date shall occur, except as provided in this
Section 3.1, each Right shall constitute the right to
purchase from the Company, upon exercise thereof in
accordance with the terms hereof (but subject to Section
5.10), that number of shares of Common Stock having an
aggregate Market Price on the Stock Acquisition Date equal
to twice the Exercise Price for an amount in cash equal to
the Exercise Price (such right to be appropriately adjusted
in order to protect the interests of the holders of Rights
generally in the event that on or after such Stock
Acquisition Date an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or
were Beneficially Owned on or after the Stock Acquisition
Date by an Acquiring Person or an Affiliate or Associate
thereof or by any transferee, direct or indirect, of any of
the foregoing shall become void and any holder of such
Rights (including transferees) shall thereafter have no
right to exercise or transfer such Rights under any
provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person
presenting the same will not complete the certification set
forth at the end of the form of assignment or notice of
election to exercise and provide such additional evidence of
the identity of the Beneficial Owner and its Affiliates and
Associates (or former Beneficial Owners and their Affiliates
and Associates) as the Company shall reasonably request,
then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an
Affiliate or Associate thereof or a transferee of any of the
foregoing and accordingly will deem the Rights evidenced
thereby to be void and not transferable or exercisable.
(c) The Board of Directors of the Company may, at its
option, at any time after a Flip-in Date and prior to the
time that an Acquiring Person becomes the Beneficial Owner
of more than 50% of the outstanding shares of Common Stock,
elect to exchange all (but not less than all) the then
outstanding Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 3.1(b))
for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted in order
to protect the interests of holders of Rights generally in
the event that after the Separation Time an event of a type
analogous to any of the events described in Section 2.4(a)
or (b) shall have occurred with respect to the Common Stock
(such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further
action and without any notice, the right to exercise the
Rights will terminate and each Right (other than Rights that
have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of shares of
Common Stock equal to the Exchange Ratio. Promptly after
the action of the Board of Directors electing to exchange
the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of
Common Stock in exchange for Rights) to the Rights Agent and
the holders of the Rights (other than Rights that have
become void pursuant to Section 3.1(b)) outstanding
immediately prior thereto by mailing such notice in
accordance with Section 5.9.
Each Person in whose name any certificate for shares is
issued upon the exchange of Rights pursuant to this Section
3.1(c) or Section 3.1(d) shall for all purposes be deemed to
have become the holder of record of the shares 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 any applicable taxes and
other governmental charges payable by the holder was made;
provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the
Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day
on which the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under
Section 3.1(a) or (c) to issue shares of Common Stock upon
exercise of or in exchange for Rights, the Company, at its
option, may substitute therefor shares of Preferred Stock,
at a ratio of one one-hundredth of a share of Preferred
Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient
treasury shares or authorized but unissued shares of Common
Stock or Preferred Stock of the Company to permit the
exercise or exchange in full of the Rights in accordance
with Section 3.1(a) or (c), the Company shall either (i)
call a meeting of stockholders seeking approval to cause
sufficient additional shares to be authorized (provided that
if such approval is not obtained the Company will take the
action specified in clause (ii) of this sentence) or (ii)
take such action as shall be necessary to ensure and
provide, to the extent permitted by applicable law and any
agreements or instruments in effect on the Stock Acquisition
Date to which it is a party, that each Right shall
thereafter constitute the right to receive, (x) at the
Company's option, either (A) in return for the Exercise
Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the
Exercise Price, or (B) without payment of consideration
(except as otherwise required by applicable law), debt or
equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if
the Board of Directors of the Company elects to exchange the
Rights in accordance with Section 3.1(c), debt or equity
securities or other assets (or a combination thereof) having
a fair value equal to the product of the Market Price of a
share of Common Stock on the Flip-in Date times the Exchange
Ratio in effect on the Flip-in Date, where in any case set
forth in (x) or (y) above the fair value of such debt or
equity securities or other assets shall be as determined in
good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking
firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the
Company shall not enter into any agreement with respect to,
consummate or permit to occur any Flip-over Transaction or
Event unless and until it shall have entered into a
supplemental agreement with the Flip-over Entity, for the
benefit of the holders of the Rights, providing that, upon
consummation or occurrence of the Flip-over Transaction or
Event (i) each Right shall thereafter constitute the right
to purchase from the Flip-over Entity, upon exercise thereof
in accordance with the terms hereof, that number of shares
of Flip-over Stock of the Flip-over Entity having an
aggregate Market Price on the date of consummation or
occurrence of such Flip-over Transaction or Event equal to
twice the Exercise Price for an amount in cash equal to the
Exercise Price (such right to be appropriately adjusted in
order to protect the interests of the holders of Rights
generally in the event that after such date of consummation
or occurrence an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-over Stock) and (ii) the
Flip-over Entity shall thereafter be liable for, and shall
assume, by virtue of such Flip-over Transaction or Event and
such supplemental agreement, all the obligations and duties
of the Company pursuant to this Agreement. The provisions
of this Section 3.2 shall apply to successive Flip-over
Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection
therewith, the Company shall not enter into any agreement
with respect to, consummate or permit to occur any Flip-over
Transaction or Event if at the time thereof there are any
rights, warrants or securities outstanding or any other
arrangements, agreements or instruments that would eliminate
or otherwise diminish in any material respect the benefits
intended to be afforded by this Rights Agreement to the
holders of Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company agrees to pay to the
Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted to be
done 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.
(b) 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 certificate for securities
purchasable upon exercise of Rights, Rights Certificate,
certificate 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.
4.2 Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it
may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation
succeeding to the shareholder services business of the
Rights Agent or any successor Rights Agent, will 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 4.4 hereof. In
case at the time such successor Rights Agent succeeds to the
agency created by this Agreement any of the Rights
Certificates 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 have not 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 will have the full
force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent is
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.
4.3 Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon
the following terms and conditions, by all of which the
Company and the holders of 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 will 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 deems it necessary or desirable
that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate
signed by a person believed by the Rights Agent to be the
Chairman of the Board, the President or any Vice President
and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate will be
full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this
Agreement or in the certificates for securities purchasable
upon exercise of Rights or the Rights Certificates (except
its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be
deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility
in respect of the validity of this Agreement or the
execution and delivery hereof (except the due authorization,
execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any certificate for
securities purchasable upon exercise of Rights or Rights
Certificate (except its countersignature thereof); nor will
it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any
change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 3.1(b) hereof) or
any adjustment required under the provisions of Section 2.4,
3.1 or 3.2 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 after receipt
of the certificate contemplated by Section 2.4 describing
any such adjustment); nor will it by any act hereunder be
deemed to make any representation or warranty as to the
authorization or reservation of any securities purchasable
upon exercise of Rights or any Rights or as to whether any
securities purchasable upon exercise of Rights will, when
issued, be duly and validly authorized, executed, issued and
delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its
duties hereunder from any person believed by the Rights
Agent to be the Chairman of the Board, the President or any
Vice President or the Secretary or any Assistant Secretary
or the Treasurer or any Assistant Treasurer of the Company,
and to apply to such persons for advice or instructions in
connection with its duties, and it shall not be liable for
any action taken or suffered by it in good faith in
accordance with instructions of any such person.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in
Common Stock, 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 will not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign
and be discharged from its duties under this Agreement upon
90 days' notice (or such lesser notice as is acceptable to
the Company) in writing mailed to the Company and to each
transfer agent of Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with
Section 5.9. The Company may remove the Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent and to
each transfer agent of the Common Stock by registered or
certified mail, and to the holders of the Rights in
accordance with Section 5.9. If the Rights Agent should
resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights
Agent. If the Company fails to make such appointment within
a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of
any Rights (which holder shall, with such notice, submit
such holder's Rights Certificate for inspection by the
Company), then the holder of any Rights may apply to any
court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation
organized and doing business under the laws of the United
States or of the State of Delaware or any other State of the
United States, in good standing, which is authorized under
such laws to exercise the powers of the Rights Agent
contemplated by this Agreement 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. After
appointment, the successor Rights Agent will 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 will file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to
the holders of the Rights. Failure to give any notice
provided for in this Section 4.4, 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.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to the close of
business on the Flip-in Date, elect to redeem all (but not
less than all) of the then outstanding Rights at the
Redemption Price and the Company, at its option, may pay the
Redemption Price either in cash or shares of Common Stock or
other securities of the Company deemed by the Board of
Directors, in the exercise of its sole discretion, to be at
least equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors
of the Company electing to redeem the Rights (or, if the
resolution of the Board of Directors electing to redeem the
Rights states that the redemption will not be effective
until the occurrence of a specified future time or event,
upon the occurrence of such future time or event), without
any further action and without any notice, the right to
exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the
Redemption Price in cash or securities, as determined by the
Board of Directors. Promptly after the Rights are redeemed,
the Company shall give notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights
by mailing such notice in accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire
at the Expiration Time and no Person shall have any rights
pursuant to this Agreement or any Right after the Expiration
Time, except, if the Rights are exchanged or redeemed, as
provided in Section 3.1 or 5.1 hereof.
5.3 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 number or kind or class of shares of stock
purchasable upon exercise of Rights made in accordance with
the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common
Stock by the Company following the Separation Time and prior
to the Redemption Time or Expiration Time pursuant to the
terms of securities convertible or redeemable into shares of
Common Stock or to options, in each case issued or granted
prior to, and outstanding at, the Separation Time, the
Company shall issue to the holders of such shares of Common
Stock, Rights Certificates representing the appropriate
number of Rights in connection with the issuance or sale of
such shares of Common Stock; provided, however, in each
case, (i) no such Rights Certificate shall be issued, if,
and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or to
the Person to whom such Rights Certificates would be issued,
(ii) no such Rights Certificates shall be issued if, and to
the extent that, appropriate adjustment shall have otherwise
been made in lieu of the issuance thereof, and (iii) the
Company shall have no obligation to distribute Rights
Certificates to any Acquiring Person or Affiliate or
Associate of an Acquiring Person or any transferee of any of
the foregoing.
5.4 Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this
Agreement without the approval of any holders of Rights (i)
prior to the close of business on the Flip-in Date, in any
respect and (ii) after the close of business on the Flip-in
Date, to make any changes that the Company may deem
necessary or desirable and which shall not materially
adversely affect the interests of the holders of Rights
generally or in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be
inconsistent with any other provisions herein or otherwise
defective. The Rights Agent will duly execute and deliver
any supplement or amendment hereto requested by the Company
which satisfies the terms of the preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise or
redemption of Rights, the Company shall, in lieu thereof, in
the sole discretion of the Board of Directors, either (a)
evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the
Company and a depositary selected by it, providing that each
holder of a depositary receipt shall have all of the rights,
privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or
(b) sell such shares on behalf of the holders of Right and
pay to the registered holder of such Rights the appropriate
fraction of price per share received upon such sale.
5.6 Rights of Action. Subject to the terms of this
Agreement (including Section 3.1(b)), rights of action in
respect of this Agreement, other than rights of action
vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any
Rights, without the consent of the Rights Agent or of the
holder of any other Rights, may, on such holder's own behalf
and for such holder's own benefit and the benefit of other
holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right
to exercise such holder's Rights in the manner provided in
such holder's Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and 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.
5.7 Holder of Rights Not Deemed a Stockholder. No holder,
as such, of any Rights shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of shares
or any other securities which may at any time be issuable on
the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer
upon the holder of any Rights, 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 5.8 hereof), or to receive dividends or
subscription rights, or otherwise, until such Rights shall
have been exercised or exchanged in accordance with the
provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall
propose after the Separation Time and prior to the
Expiration Time (i) to effect or permit occurrence of any
Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of
a Right, in accordance with Section 5.9 hereof, a notice of
such proposed action, which shall specify the date on which
such Flip-over Transaction or Event, liquidation,
dissolution, or winding up is to take place, and such notice
shall be so given at least 20 Business Days prior to the
date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by
this Agreement to be given or made by the Rights Agent or by
the holder of any Rights to or on the Company shall be
sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as
follows:
KLLM Transport Services, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
Any notice or demand authorized or required by this
Agreement to be given or made by the Company or by the
holder of any Rights to or on the Rights Agent shall be
sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
KeyCorp Shareholder Services, Inc.
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Corporate Trust Manager
Notices or demands authorized or required by this Agreement
to be given or made by the Company or the Rights Agent to or
on the holder of any Rights shall be sufficiently given or
made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such
holder as it appears upon the registry books of the Rights
Agent or, prior to the Separation Time, on the registry
books of the transfer agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the
notice.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will or
need be taken pursuant to Section 3.1 or to comply with
federal or state securities laws, the Company may suspend
the exercisability of the Rights for ninety (90) days and
any additional period that may be reasonable in order to
take such action or comply with such laws. In the event of
any such suspension, the Company shall issue as promptly as
practicable a public announcement stating that the
exercisability or exchangeability of the Rights has been
temporarily suspended. Notice thereof pursuant to Section
5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken
hereunder.
5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are
purchasable upon exercise of Rights fails to fulfill any of
its obligations pursuant to this Agreement, then the Company
or such Person will reimburse the holder of any Rights for
the costs and expenses (including legal fees) incurred by
such holder in actions to enforce such holder's rights
pursuant to any Rights or this Agreement.
5.12 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.
5.13 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the
Company, the Rights Agent and the holders of the Rights 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
holders of the Rights.
5.14 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 to 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. All such actions,
calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights and
all other parties, and (y) not subject the Board of
Directors of the Company to any liability to the holders of
the Rights.
5.15 Descriptive Headings. Descriptive headings appear
herein for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT 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.
5.17 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.
5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any
jurisdiction and to any extent, be invalid or unenforceable,
such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering
unenforceable the remaining terms and provisions hereof or
the application of such term or provision to circumstances
other than those as to which it is held invalid or
unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above
written.
KLLM TRANSPORT SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Beviliqua
Title: President and Chief Executive Officer
KeyCorp Shareholder Services, Inc.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice President
