EXHIBIT 4.1
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SYNOVUS FINANCIAL CORP.
and
STATE STREET BANK AND TRUST COMPANY
as
Rights Agent
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Rights Agreement
Dated as of April 27, 1999
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Table of Contents
Section Page
Section 1. Certain Definitions ...............................................1
Section 2. Appointment of Rights Agent .......................................8
Section 3. Issuance of Right Certificates.....................................9
Section 4. Form of Right Certificates........................................11
Section 5. Countersignature and Registration ................................13
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right
Certificates...................................................14
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.....15
Section 8. Cancellation and Destruction of Right Certificates................18
Section 9. Reservation and Availability of Shares of Common Stock............18
Section 10. Common Stock Record Date.........................................21
Section 11. Adjustments to Number and Kind of Shares, Number of Rights
or Purchase Price..............................................21
Section 12. Certification of Adjustments.....................................35
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power...............................................35
Section 14. Fractional Rights and Fractional Shares .........................42
Section 15. Rights of Action ................................................42
Section 16. Agreement of Right Holders ......................................43
Section 17. Right Certificate Holder Not Deemed a Shareholder................44
Section 18. Concerning the Rights Agent......................................45
Section 19. Merger or Consolidation or Change of Name of Rights Agent........46
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Section 20. Duties of Rights Agent...........................................47
Section 21. Change of Rights Agent...........................................50
Section 22. Issuance of New Right Certificates...............................51
Section 23. Redemption.......................................................52
Section 24. Exchange.........................................................54
Section 25. Notice of Proposed Actions.......................................55
Section 26. Notices .........................................................57
Section 27. Supplements and Amendments.......................................58
Section 28. Determinations and Actions by the Board .........................59
Section 29. Successors.......................................................60
Section 30. Benefits of this Rights Agreement................................60
Section 31. Georgia Contract.................................................60
Section 32. Counterparts.....................................................60
Section 33. Descriptive Headings.............................................60
Section 34. Severability ....................................................60
Exhibit A -- Form of Right Certificate
Exhibit B -- Form of Summary of Rights
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RIGHTS AGREEMENT
This agreement ("Rights Agreement"), dated as of April 27, 1999,
between SYNOVUS FINANCIAL CORP., a Georgia corporation (the "Company") and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts banking corporation (the "Rights
Agent").
W I T N E S E T H:
WHEREAS, the Board of Directors of the Company on April 27,
1999 (i) authorized the issuance and declared a dividend of one right (a
"Right") for each share of the common stock, par value $1.00 per share ("Common
Stock"), of the Company outstanding as of the close of business on May 4, 1999
(the "Record Date"), each Right representing the right to purchase one share of
Common Stock of the Company upon the terms and subject to the conditions
hereafter set forth, and (ii) further authorized the issuance of one Right with
respect to each share of Common Stock of the Company that shall become
outstanding between May 4, 1999, and the earliest of the Distribution Date, the
Expiration Date or the Final Expiration Date (each such term as defined herein);
and
WHEREAS, the Board of Directors does not believe that any
Person (as defined herein) is as of the date hereof the Beneficial Owner (as
defined herein) of 15% or more of the outstanding Common Stock;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated:
a. "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as
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such term is hereinafter defined) of 15% or more of the outstanding Common
Stock; provided, however, that (i) the term "Acquiring Person" shall not include
an Exempt Person (as such term is hereinafter defined) or a "Permitted Holder"
(as such term is hereinafter defined), (ii) a Person shall not be deemed to have
become an Acquiring Person for any purpose of this Agreement if the Board of
Directors in its good faith judgment determines that a Person has inadvertently
become the Beneficial Owner of 15% or more of the outstanding Common Stock of
the Company (or in the case of a Permitted Holder, has inadvertently acquired
additional shares of Common Stock of the Company so that it is no longer a
Permitted Holder) and within ten days after the date upon which the Company
shall first become aware of the occurrence of such an event, the Board of
Directors in its sole discretion provides such Person with a thirty day period
to divest a sufficient number of shares so that such Person no longer is the
Beneficial Owner of 15% or more of the outstanding Common Stock of the Company
(or in the case of a Permitted Holder, to divest all shares of Common Stock of
the Company which prevent such Person from being a Permitted Holder), and such
Person has so divested such shares of Common Stock of the Company at the end of
any such thirty day period and has not acquired any additional shares of Common
Stock of the Company prior to the end of such thirty day period; and (iii)
shares of Common Stock Beneficially Owned by the Company or any Subsidiary of
the Company shall not be considered outstanding for purposes of calculating any
Person's percentage ownership of the outstanding Common Stock of the Company.
b. "Adjustment Shares" shall have the meaning set forth
in Section 11(a)(ii) hereof.
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c. "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), as in effect on the date of this Agreement.
d. A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "Beneficially Own", any securities:
i. which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
ii. which such Person or any of such Person's
Affiliates or Associates, directly or indirectly 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 (whether or not in
writing), or upon the exercise of conversion rights, exchange
rights, rights (other than these Rights), warrants or options,
or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "Beneficially Own",
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates pursuant to, and in accordance with
the applicable rules and regulations promulgated under the
Exchange Act, until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "Beneficially Own", any
securities if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or
consent given to such
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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 by such Person on Schedule 13D or Schedule 13G
under the Exchange Act (or any comparable or successor
report); or
iii. which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except as described
in the proviso to clause (B) of subparagraph (ii) of this
paragraph (d)) or disposing of any securities of the Company;
provided, however, that nothing in this paragraph (d) shall
cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to Beneficially
Own, any securities acquired through such Person's
participation in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such
acquisition.
e. "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in The 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 P.M.,
Eastern Standard Time, on such date; provided, however, that if such date is not
a Business Day it shall mean 5:00 P.M., Eastern Standard Time, on the next
succeeding Business Day.
g. "Common Stock" when used with reference to the Company
shall mean the common stock (presently $1.00 par value per share) of the
Company. "Common Stock" when used
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with reference to any Person other than the Company shall mean the capital stock
or other equity interests with the greatest per share or per unit voting power
of such other Person or, if such Person is a Subsidiary of or is controlled by
another Person, the Person or Persons which ultimately controls such
first-mentioned Person.
h. "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
i. "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
j. "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
k. "Distribution Date" shall have the meaning set forth
in Section 3(a) hereof.
l. "Equivalent Common Stock" shall have the meaning
set forth in Section 11(b) hereof.
m. "Exchange Act" shall have the meaning set forth in Section
l(c) hereof.
n. "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof.
o. "Exempt Person" shall mean:
(i) the Company, any Subsidiary of the Company, any
employee benefit plan or employee stock plan of the Company or
of any Subsidiary of the Company, or any Person or
entity organized, appointed, established or holding Common
Stock for or pursuant to the terms of any such plan;
(ii) (a) any shareholder who is a descendant of
X. Xxxxxx Xxxxxx (the "Xxxxxx Family"), (b) any
shareholder who is an Affiliate or Associate of the
Xxxxxx Family, or (c) any Person who would otherwise
become an Acquiring Person as a result of the
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acquisition of Common Stock or a Beneficial Interest in
Common Stock from one or more members of the Xxxxxx Family
(or from any Affiliate or Associate of the Xxxxxx Family)
by way of gift, devise, descent or distribution; provided,
however, that no Person described in the foregoing
clauses (a), (b) or (c) shall be an Exempt Person if such
Person (together with all Affiliates and Associates of such
Person) is the Beneficial Owner of more than 30% of the
outstanding Common Stock; and
(iii) any Person who as of the date hereof was the
Beneficial Owner of 15% or more of the outstanding
Common Stock; provided, however, that such Person shall not
be an Exempt Person if subsequent to the date hereof such
Person becomes the Beneficial Owner of any additional shares
of Common Stock.
p. "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
q. "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
r. "NYSE" shall have the meaning set forth in Section 9(b)
hereof.
s. "Permitted Holder" shall mean any Person who would
otherwise become an Acquiring Person solely by virtue of a reduction in
the number of total outstanding shares of Common Stock; provided, however,
that such Person shall not be a Permitted Holder if, subsequent to such
reduction, such Person shall become the Beneficial Owner of any additional
shares of Common Stock.
t. "Person" shall mean any individual, firm, corporation,
partnership, joint venture, limited liability company, association or other
entity, and shall include any successor (by merger or otherwise) of such entity.
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u. "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
v. "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
w. "Record Date" shall have the meaning set forth in the
recitals clause at the beginning of this Rights Agreement.
x. "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
y. "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
z. "Section 11(a)(ii) Event" shall mean an event described in
Section 11(a)(ii) hereof.
aa. "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
bb. "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
cc. "Securities Act" shall mean the Securities Act of 1933, as
amended.
dd. "Stock Acquisition Date" shall mean the first date of a
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) or (g) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such; provided, however, that if such Person is
determined not to have become an Acquiring Person pursuant to Section 1(a),
then no Stock Acquisition Date shall be deemed to have occurred.
ee. "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of
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the board of directors or other persons performing similar functions are
Beneficially Owned, directly or indirectly, by such Person.
ff. "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
gg. "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
hh. "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
ii. "Triggering Event" shall mean any event described in
Section 11(a)(ii) or Section 13 hereof.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3, shall prior to the Distribution Date
also be the holders of the Common Stock) 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 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. If 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 Right Certificates.
a. Until the earlier of (i) the Close of Business on the tenth
day after the Stock Acquisition Date or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person)
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of, or the first public announcement of the intent of any Person (other than an
Exempt Person) to commence, a tender or exchange offer upon the successful
consummation of which such Person, together with its Affiliates and Associates,
would be the Beneficial owner of 15% or more of the outstanding Common Stock
(irrespective of whether any shares are actually purchased pursuant to such
offer) (the earlier of such dates described in clauses (i) and (ii) being
referred to herein as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(c) hereof) by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate Right certificates, and (y) each Right (and the
right to receive separate Right Certificates) will be transferable only in
connection with the transfer of a share (subject to adjustment as hereinafter
provided) of Common Stock. As soon as practicable after the Distribution Date,
the Company will prepare and execute, and the Rights Agent will send, by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the Close of Business on the Distribution Date, as shown by the
records of the Company, at the address of such holder shown on such records, a
Right Certificate in substantially the form of Exhibit A hereto ("Right
Certificate") evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. As of and after the Distribution Date,
the Rights will be evidenced solely by such Right Certificates and will be
transferable separately from the Common Stock.
b. As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Common Stock,
substantially in the form attached hereto as Exhibit B ("Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of
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Common Stock as of the Close of Business on the Record Date at the address of
such holder shown on the records of the Company.
c. With respect to certificates for Common Stock outstanding
as of the Record Date until the Distribution Date (or, if earlier, the
Expiration Date or the Final Expiration Date), the Rights will be evidenced by
certificates for Common Stock registered in the names of the holders thereof
together with a copy of the Summary of Rights. Until the Distribution Date (or,
if earlier, the Expiration Date or Final Expiration Date), the surrender for
transfer of any certificate for Common Stock outstanding on the Record Date with
or without a copy of the Summary of Rights attached thereto, shall also
constitute the surrender for transfer of the Rights associated with the Common
Stock represented thereby.
d. Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock) after
the Record Date, but prior to the earliest of the Distribution Date, the
Expiration Date or the Final Expiration Date, shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Synovus
Financial Corp. and a Rights Agent, (the "Rights Agreement"), the terms
of which are incorporated herein by reference and a copy of which is on
file at the principal executive office of Synovus Financial Corp. 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. Synovus Financial Corp. will mail to the
holder of this certificate a copy of the Rights Agreement without
charge within five days after receipt by it of a written request
therefor. Under certain circumstances as provided in the Rights
Agreement, Rights issued to or beneficially owned by Acquiring Persons
or their Associates or Affiliates (as defined in the Rights Agreement)
or any subsequent holder of such Rights may become null and void.
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With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the earliest of the Distribution Date, Expiration Date or Final Expiration Date,
be evidenced by such certificates alone, and the surrender for transfer of any
such certificate shall also constitute the surrender for transfer of the Rights
associated with the Common Stock represented thereby. If the Company purchases
or acquires any Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with shares of Common Stock which are no longer outstanding.
Section 4. Form of Right Certificates.
a. The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in Exhibit A
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 Rights
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 stock
exchange or trading system on which the Rights may from time to time be listed
or traded, or to conform to usage. Subject to the provisions of Sections 11 and
22 hereof, the Right Certificates whenever distributed, shall be dated as of the
Record Date and on their face shall entitle the holders thereof to purchase one
share of Common Stock, or other securities or property as provided herein, as
the same may from time to time be adjusted as provided herein, at the price of
Two Hundred and Twenty Five Dollars ($225.00), as the same may from time to time
be adjusted as provided herein (the "Purchase Price").
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b. Notwithstanding any other provision of this Rights
Agreement, any Right Certificate that represents Rights that are or were at any
time on or after the Distribution Date Beneficially Owned by an Acquiring Person
or any Affiliate or Associate thereof (or any transferee of such Rights) shall
have impressed on, printed on, written on or otherwise affixed to it (if the
Company or the Rights Agent has knowledge that such Person is an Acquiring
Person or an Associate or Affiliate thereof or transferee of such Persons or a
nominee of any of the foregoing) the following legend:
The beneficial owner of the Rights represented by this Right
Certificate is an Acquiring Person or an Affiliate or Associate (as
defined in the Rights Agreement) of an Acquiring Person or a subsequent
holder of such Right Certificate beneficially owned by such Persons.
Accordingly, under circumstances specified in the Rights Agreement,
this Right Certificate and the Rights represented hereby will become
null and void.
Notwithstanding the above provision, failure to place such legend on any Right
Certificate representing Rights which are otherwise null and void pursuant to
the terms of this Agreement shall not affect the null and void status of such
Rights.
Section 5. Countersignature and Registration.
a. The Right Certificates shall be executed on behalf of the
Company by its Chief Executive Officer, President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Right Certificates shall be countersigned (which countersignature may be a
facsimile) by the Rights Agent and shall not be valid for any purpose unless so
countersigned. If any officer of the Company who shall have signed any of the
Right Certificates shall cease to be such officer of the
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Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent, and issued and delivered with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
b. Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates, the
date of each of the Right Certificates, and the certificate numbers for each of
the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
a. Subject to the provisions of Section 14 hereof, at any time
after the Close of Business on the Distribution Date and at or prior to the
Close of Business on the earlier of the Expiration Date or the Final Expiration
Date, any Right Certificate or Right Certificates may be (a) transferred or (b)
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer any Right Certificate shall surrender the
Right
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Certificate at the principal office of the Rights Agent with the form of
assignment on the reverse side thereof (or enclose with such Right Certificate a
written instrument of transfer in a form satisfactory to the Company and the
Rights Agent), duly executed by the registered holder thereof or his attorney
duly authorized in writing, and with such signature duly guaranteed. Any
registered holder desiring to split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon the
Rights Agent shall countersign (which countersignature may be a facsimile) and
deliver to the person entitled thereto a Right Certificate or Right
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
Right Certificates.
b. Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, if requested by
the Company, 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 Right Certificate if mutilated, the Company will execute and
deliver a new Right Certificate of like tenor to the Rights Agent for delivery
to the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
a. Subject to Section 7(e), the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including without
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limitation, the restrictions on exercisability set forth in Section 9(b),
Section 11(a)(iii) and Section 23(a)), in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed (with such
signature duly guaranteed), to the Rights Agent at the principal office of the
Rights Agent designated for such purpose together with payment of the aggregate
Purchase Price with respect to each Right exercised, subject to adjustment as
hereinafter provided, at or prior to the earliest of (i) the Close of Business
on May 4, 2009 ("Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (such date being herein referred to as
the "Expiration Date") or (iii) the time at which such Rights are exchanged as
provided in Section 24.
b. The Purchase Price shall initially be $225.00 for each
share of Common Stock issued pursuant to the exercise of a Right. The Purchase
Price and the number of shares of Common Stock or other securities or
consideration to be acquired upon exercise of a Right shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof. The
Purchase Price shall be payable in lawful money of the United States of America,
in accordance with Section 7(c) hereof.
c. Except as provided in Section 7(d) hereof, upon receipt of
a Right Certificate representing exercisable rights with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price or so much
thereof as is necessary for the shares or other securities or assets to be
purchased and an amount equal to any applicable transfer tax, by cash, certified
check or official bank check payable to the order of the Company or the Rights
Agent, the Rights Agent subject to Section 20(j) shall thereupon promptly (i)
requisition from any transfer agent of the Common Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the
number of shares of Common Stock so elected to be purchased and the Company
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will comply and hereby authorizes and directs such transfer agent to comply with
all 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(b) hereof, (iii) promptly after receipt of such
Common Stock certificates cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder, and (iv) when appropriate, after
receipt promptly deliver such cash to or upon the order of the registered holder
of such Right Certificate; provided, however, that in the case of a purchase of
securities, other than Common Stock, pursuant to Section 13 hereof, the Rights
Agent shall promptly take the appropriate actions corresponding to the foregoing
clauses (i) through (iv). In the event that the Company is obligated to issue
other securities of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate.
d. If the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
e. Notwithstanding anything in this Agreement to the contrary,
any Rights that are at any time Beneficially Owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of any such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.
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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 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 Right Certificates.
All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered
to the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy (or cause to be destroyed) such cancelled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to
the Company.
Section 9. Reservation and Availability of Shares of Common
Stock.
a. Subject to the Company's rights under Section 11(a)(iii) to
otherwise fulfill its obligations hereunder, the Company covenants and agrees
that at all times it will cause to be reserved and kept available, out of and to
the extent of its authorized and unissued shares of
17
Common Stock not reserved for another purpose (and, following the occurrence of
a Triggering Event, other securities) or shares held in its treasury, the number
of shares of Common Stock (and, following the occurrence of a Triggering Event,
other securities) that, as provided in this Agreement, including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights; provided, however, that the Company shall not be required to
reserve and keep available shares of Common Stock or other securities sufficient
to permit the exercise in full of all outstanding Rights pursuant to the
adjustments set forth in Section 11(a)(ii), Section 11(a)(iii) or Section 13
hereof unless, and only to the extent that, the Rights become exercisable
pursuant to Section 7(a) following such adjustments.
b. The Company shall (i) use its best efforts to cause, from
and after such time as the Rights become exercisable, the Rights and all shares
of Common Stock (and following the occurrence of a Triggering Event, other
securities) issued or reserved for issuance upon exercise thereof to be listed
by the New York Stock Exchange ("NYSE") or any other national securities
exchange upon notice of issuance upon such exercise and (ii) if then necessary
to permit the offer and issuance of such shares of Common Stock (and, following
the occurrence of a Triggering Event, other securities), register and qualify
such shares of Common Stock (and, following the occurrence of a Triggering
Event, other securities) under the Securities Act and any applicable state
securities or "blue sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as practicable after such filing and keep such registration
and qualifications effective until the earlier of the Expiration Date or the
Final Expiration Date of the Rights. The Company may temporarily suspend, for a
period of time not to exceed one hundred and eighty (180) days, the
exercisability of the Rights in order to prepare and
18
file a registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained and until
a registration statement under the Securities Act (if required) shall have been
declared effective.
c. The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Common Stock (and
following the occurrence of a Triggering Event, other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price in respect thereof), be duly
and validly authorized and issued and fully paid and nonassessable shares in
accordance with applicable law.
d. The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Common Stock (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 which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance or
delivery of certificates for Common Stock (or other securities, as the case may
be) upon exercise of Rights in a name other than that of, the registered holder
of the Right Certificate, and the Company shall not be required to issue or
deliver a Right Certificate or certificate for Common Stock (or other
securities, as the case may be) to a
19
person other than such registered holder until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose
name any certificate for shares of Common Stock (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 Common Stock (or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such rights
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of such surrender
and payment is a date upon which the Common Stock (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 Common Stock (or
other securities) transfer books of the Company are open.
Section 11. Adjustments to Number and Kind of Shares, Number
of Rights or Purchase Price.
The number and kind of shares subject to purchase upon the
exercise of each Right, the number of Rights outstanding and the Purchase Price
are subject to adjustment from time to time as provided in this Section 11.
a. (i) If the Company shall at any time after the Record Date
(A) declare or pay any dividend on Common Stock payable in shares of Common
Stock, (B) subdivide or split the outstanding shares of Common Stock into a
greater number of shares, (C) combine or consolidate
20
the outstanding shares of Common Stock into a smaller number of shares or effect
a reverse split of the outstanding shares of Common Stock or (D) issue any
shares of its capital stock in a reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as otherwise
provided in Section 7(e) or this Section 11(a), the Purchase Price in effect at
the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of Common Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of Common Stock or
capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date, the holder thereof 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 such Right be less than the
per share par value of the shares of capital stock of the Company issuable upon
exercise of the Right. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person shall become an Acquiring Person
(a "Section 11(a)(ii) Event") other than pursuant to any
transaction set forth in Section 13(a) hereof then, subject to
Section 23(a) hereof, and except as otherwise provided in this
Section 11, each holder of a Right (except as provided below
and in Section 7(e)) shall thereafter
21
have a right to receive for each Right, upon exercise thereof
in accordance with the terms of this Rights Agreement and
payment of a price equal to the then current Purchase Price
multiplied by the number of shares of Common Stock for which a
Right was theretofore exercisable, such number of shares of
Common Stock of the Company as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the
number of shares of Common Stock for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and (y) dividing that product (such
product, following such first occurrence, shall be referred to
as the "Purchase Price" with respect to each Right for all
purposes of this Agreement) by 50% of the Current Market Price
per share of Common Stock on the date of such first occurrence
(such number of shares is herein called the "Adjustment
Shares"); provided that the Purchase Price and the number of
Adjustment Shares shall be further adjusted as provided in
this Agreement to reflect any events occurring after the date
of such first occurrence; and provided, further, 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). Notwithstanding the foregoing, upon the occurrence
of a Section 11(a)(ii) Event, any Rights that are or were at
any time on or after the earlier of the Stock Acquisition Date
or the Distribution Date Beneficially Owned by the Acquiring
Person or any Associate or Affiliate of the Acquiring Person
shall become void and any holder of
22
such Rights shall thereafter have no right to exercise such
Rights under any provision
of this Rights Agreement.
(iii) If the number of shares of Common Stock which are
authorized by the Company's articles of incorporation, as amended but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) and the Rights shall become so exercisable, to
the extent permitted by applicable law and any agreements in effect on the date
hereof to which the Company is a party, the Company shall: (A) determine the
value of the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") and (B) with respect to each Right (subject to Section 7(e)),
upon the exercise of such Right and payment of the applicable Purchase Price,
issue shares of Common Stock to the extent available for the exercise in full of
such Right and, to the extent shares of Common Stock are not so available, make
adequate provision to substitute for the Adjustment Shares not received upon
exercise of such Right (1) cash, (2) a reduction in the Purchase Price, (3)
other equity securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock of the Company which, by virtue of having
dividend, voting and liquidation rights substantially comparable to those of the
Common Stock, are deemed in good faith by the Board of Directors of the Company
to have substantially the same value as shares of Common Stock (such shares or
units of shares of preferred stock are herein called "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value which, when added to the
value of the shares of Common Stock actually issued upon exercise of such Right,
shall have an aggregate value equal to the Current Value (less the amount of any
reduction in Purchase Price), where such aggregate value has been determined in
good faith by
23
the Board of Directors of the Company based upon the advice of a nationally
recognized independent investment banking firm selected in good faith by the
Board of Directors of the Company; provided, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B) above
within thirty days following the first occurrence of a Section 11(a)(ii) Event
(the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares and/or cash have an aggregate value
equal to the excess of the Current Value over the Purchase Price. If the Board
of Directors of the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, the thirty day period set forth above may
be extended to the extent necessary, but not more than one hundred and twenty
(120) days after the Section 11(a)(ii) Trigger Date, in order that the Company
may seek shareholder approval for the authorization of such additional shares
(such thirty day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) and
the last sentence of Section 11(a)(ii) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
24
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the Current Market Price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit
value of any "Common Stock Equivalent" shall be deemed to equal the Current
Market Price per share of the Common Stock on such date. The Board of Directors
may, but shall not be required to, establish procedures to allocate the right to
receive Common Stock upon the exercise of the Rights among holders of Rights
pursuant to this Section 11(a)(iii).
b. If the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Common
Stock entitling them to subscribe for or purchase (for a period expiring within
forty-five calendar days after such record date) Common Stock, shares having the
same rights, privileges and preferences as the Common Stock ("Equivalent Common
Stock") or securities convertible into Common Stock or Equivalent Common Stock
at a price per share of Common Stock or Equivalent Common Stock (or having a
conversion price per share, if a security convertible into Common Stock or
Equivalent Common Stock) less than the Current Market Price per share of Common
Stock on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock and/or Equivalent Common Stock (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of
which shall be the number of shares of Common Stock outstanding on such record
date, plus the number of
25
additional shares of Common Stock and/or Equivalent Common Stock to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
by delivery of consideration part or all of which may be in a form other than
cash, the value of such non-cash 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 and the holders of Rights. Shares of Common Stock 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 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. If the Company shall fix a record date for a distribution
to all holders of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Common Stock, but including any dividend
payable in stock other than Common Stock) 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 Current Market Price per share of Common Stock
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) of the portion of the
26
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Common Stock and the
denominator of which shall be such Current Market Price per share of Common
Stock. Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
d. For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of the Common Stock for the thirty
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for purpose of computations made pursuant to Section
11(a)(iii) hereof, the "Current Market Price" per share of the Common Stock on
any date shall be deemed to be the average of the daily closing prices per share
of the Common Stock for the ten consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market Price
per share of the Common Stock is determined during a period following the
announcement by the issuer of the Common Stock of (i) any dividend or
distribution on the Common Stock (other than a regular quarterly cash dividend
and other than the Rights), or (ii) any subdivision, combination or
reclassification of the Common Stock, and prior to the expiration of the
requisite thirty Trading Day or ten Trading Day period, as set forth above, the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification occurs, then, and in each such
case, the Current Market Price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes
27
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 NYSE or,
if the shares of Common Stock are not listed or admitted to trading on the NYSE,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted sale 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 or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined in good faith by
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 or national
market system on which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities exchange
or national market system, a Business Day. If the Common Stock is not publicly
held or not so listed or traded, "Current Market Price" per share 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 conclusive for all purposes.
28
e. Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent 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 ten-thousandth of a share, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment, or (ii)
the 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 other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Common Stock contained in Xxxxxxx
00(x), (x), (x), (x), (x), (x), (x), (x), (x), (x) and (m) hereof, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Common
Stock 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 shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
29
h. Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares of Common Stock (calculated to the nearest ten-thousandth) obtained by
(i) multiplying (x) the number of shares covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
i. The Company may elect on or after the date of any
adjustment of the Purchase Price or any adjustment to the number of shares of
Common Stock for which a Right may be exercised, to adjust the number of Rights,
in lieu of any adjustment in the number of shares of Common Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of shares
of Common Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The 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 day thereafter, but, if the Right Certificates have
been issued, shall be at least ten days later than the date of the public
announcement. If Right Certificates have been issued, upon each
30
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 Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
j. Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
k. Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the shares of Common
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action, including using its reasonable best efforts to obtain any required
shareholder approvals, which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Purchase Price.
31
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 shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the shares of Common Stock
and other capital stock or 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 of Common Stock and other capital stock or securities 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 in its good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Common Stock, (ii) issuance for cash of any
shares of Common Stock at less than the Current Market Price, (iii) issuance for
cash of shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common Stock, (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 Common Stock shall
not be taxable to such shareholders.
n. The Company covenants and agrees that it shall not, at any
time after the Stock Acquisition Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction not prohibited by
Section 11(o)), (ii) merge with or into any other Person
32
(other than a Subsidiary of the Company in a transaction not prohibited by
Section 11(o)), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or a series of related transactions not in the
ordinary course of the Company's business, assets, cash flow, or earning power
aggregating more than 30% of the assets, cash flow 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 is not prohibited by Section 11(o)), if (x) at the
time of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the shareholders 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.
o. The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 23 or Section 27
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the Rights.
Section 12. Certification of Adjustments. Whenever an
adjustment is made as provided in Sections 11 and 13 hereof, the Company shall
(a) promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts giving rise to such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the Common Stock a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate (or, if prior to
33
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 26 hereof. Notwithstanding the
foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any
certificate prepared by the Company pursuant to Sections 11 and 13 and on any
adjustment therein contained. Any adjustment to be made pursuant to Sections 11
and 13 of this Rights Agreement shall be effective as of the date of the event
giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
a. If at any time on or after the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person or Persons (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o)) and the Company shall not be
the surviving or continuing corporation of such consolidation or merger, (y) any
Person or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)) shall consolidate with, or merge with and into, the
Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be converted
into or exchanged for stock or other securities of any other Person or of the
Company or cash or any other property, or (z) the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any other Person or any
Affiliate or Associate of such Person (other than the Company or any Subsidiary
of the Company, in one or more transactions not prohibited by Section 11(o)), in
one transaction or a series of related transactions, not in the ordinary course
of the Company's business, assets, cash flow or earning power aggregating more
than 30% of the assets, cash flow or earning
34
power of the Company and its Subsidiaries (taken as a whole), then, on the first
occurrence of any such event, proper provision shall be made so that (i) each
holder of record of a Right, except as provided in Section 7(e), shall
thereafter have the right to receive, upon the exercise thereof and payment of
the Purchase Price in accordance with the terms of this Rights Agreement, such
number of shares of validly issued, fully paid and nonassessable and freely
tradeable Common Stock of the Principal Party (as defined in Section 13(b)) not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of shares of Common Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of
a Section 13 Event, multiplying the Purchase Price in effect immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the number of shares of
Common Stock for which a Right was exercisable immediately prior to such first
occurrence of a Section 11(a)(ii) Event) and (2) dividing that product (such
product, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for all purposes of this Agreement) by 50% of the
Current Market Price (determined as provided in Section 11(d) hereof with
respect to the Common Stock) per share of the common stock of such Principal
Party on the date of consummation of such Section 13 Event (or the fair market
value on such date of other securities or property of the Principal Party, as
provided for herein); provided that the Purchase Price and the number of shares
of common stock of such Principal Party issuable upon exercise of each Right
shall be further adjusted as provided in this Agreement to reflect any events
occurring after the date of the first occurrence of a 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
35
to this Rights Agreement; (iii) the term "Company" for all purposes of this
Rights Agreement shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall only
apply 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 shares of its Common Stock
in accordance with Section 9 hereof) in connection with the consummation of any
such transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Purchase Price,
such cash, shares, rights, warrants and other property which such holder would
have been entitled to receive had he, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants and other property.
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) hereof: (A)
the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such
merger
36
or consolidation, or, if there is more than one such issuer,
the issuer of the Common Stock of which has the greatest
market value or (B) if no securities are so issued, (x) the
Person that is the other party to the merger or consolidation
and that survives said merger or consolidation, or, if there
is more than one such Person, the Person the Common Stock of
which has the greatest market value or (y) if the Person that
is the other party to the merger or consolidation does not
survive the merger or consolidation, the Person that does
survive the merger or consolidation (including the Company if
it survives); and
ii. in the case of any transaction described in
clause (z) of the first sentence in Section 13(a) hereof, the
Person that is the party receiving the greatest portion of the
assets, cash flow or earning power transferred pursuant to
such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same
portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons
as is the issuer of Common Stock having the greatest market
value of shares outstanding;
provided, however, that in any such case described in the foregoing (b)(i) or
(b)(ii), if the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stock of
which are and have been so registered,
37
the term "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest market value of shares
outstanding.
c. The Company shall not consummate any consolidation, merger,
sale or transfer referred to in Section 13(a) unless the Principal Party shall
have a sufficient number of authorized shares of its Common Stock which have not
been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Rights Agreement as the same shall
have been assumed by the Principal Party pursuant to Sections 13(a) and (b)
hereof and further providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will:
i. prepare and file a registration statement under
the Securities Act, if necessary, with respect to the Rights
and the securities purchasable upon exercise of the Rights on
an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and use its best efforts to
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the date of expiration of the Rights,
and similarly comply with applicable state securities laws;
ii. use its best efforts, if the Common Stock of the
Principal Party shall become listed on a national securities
exchange, to list (or continue the listing of) the
38
Rights and the securities purchasable upon exercise of the
Rights on such securities exchange and, if the Common Stock of
the Principal Party shall not be listed on a national
securities exchange, to cause the Rights and the securities
purchasable upon exercise of the Rights to be listed by the
NYSE, another national securities exchange or admitted for
trading on the Nasdaq Stock Market;
iii. deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act; and
iv. obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of
the Principal Party subject to purchase upon exercise of
outstanding Rights.
If any of the transactions described in Section 13(a) hereof shall occur at any
time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall thereafter be
exercisable in the manner described in Section 13(a). The provisions of this
Section 13 shall similarly apply to all successive mergers, consolidations,
sales, transfers or other Section 13 Events.
d. Furthermore, if the Principal Party which is to be a party
to a transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, articles of
incorporation, as amended, bylaws, as amended or other instrument governing its
corporate affairs, which provision would have the effect of (i) causing such
Principal Party to issue, in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then Current
39
Market Price per share (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then Current Market Price (other than to holders of
Rights pursuant to this Section 13) or (ii) providing for any special payment,
tax or similar provisions in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provisions of Section 13; then, in such
event, the Company hereby agrees with each holder of Rights that it shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
a. The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the holders of record of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the then
current market value of a whole Right. For the purposes of this Section 14(a),
the then current market value of a Right shall be determined in the same manner
as the Current Market Price of a share of Common Stock shall be determined
pursuant to Section 11(d) hereof.
b. The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares. In lieu of issuing fractions of shares of
Common Stock, there shall be paid to the holders of record of
40
Right Certificates at the time such Right Certificates are exercised as herein
provided an amount in cash equal to the same fraction of the then current market
value of a share of Common Stock. For purposes of this Section 14(b), the then
current market value of a share of Common Stock shall be the Current Market
Price thereof as determined pursuant to Section 11(d) hereof.
c. The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect
of this Agreement are vested in the respective holders of record of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company or any other Person to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and, accordingly, that they will
be entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
41
a. prior to the Distribution Date, the Rights will not
be evidenced by a Right Certificate and will be transferable only in connection
with the transfer of Common Stock;
b. after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
c. the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent or the
transfer agent of the Common Stock) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
and
d. notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or a beneficial interest in a Right or other Person as a result of
its inability to perform any of its obligations under this Agreement by reason
of any preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its reasonable efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
42
No holder of a Right or a Right Certificate, as such, shall be entitled
to vote, receive dividends in respect of or be deemed for any purpose to be the
holder of Common Stock or any other securities of the Company which may at any
time be issuable upon the exercise of the Rights, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the 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 set forth in Section 25), or to receive dividends or
subscription rights in respect of any such stock or securities, or otherwise
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
a. The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense incurred without gross 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 Rights Agreement including the cost and expenses of
defending against any claim of liability.
43
b. The Rights Agent shall be protected by the indemnity
provided in this Section and shall incur no liability for or in respect of any
action taken, suffered or omitted by it in connection with its administration of
this Rights Agreement in reliance upon any Right Certificate, certificate for
Common Stock or 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, guaranteed, verified or
acknowledged, by the proper person or persons.
Section 19. 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 shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Rights Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. If at the time such successor Rights Agent
shall succeed to the agency created by this Rights Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and if at that time any of the
Right Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name
44
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this Rights
Agreement.
b. If at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver such Right Certificates so countersigned; and
if at that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this Rights
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates (or, if prior to the Distribution Date, the holders of Common
Stock), by their acceptance thereof, shall be bound:
a. The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company or its own in-house counsel), 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 to be taken by it in good faith
and in accordance with such opinion.
b. Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the Chief
Executive
45
Officer, 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 shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Rights Agreement in reliance upon such
certificate.
c. The Rights Agent shall be liable hereunder only for its own
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 Rights Agreement or
in the Right Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
e. The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights or any adjustment required under the provisions hereof or responsible
for the manner, method or amount of any such change or adjustment or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice of any such change or adjustment); nor shall it
by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or other securities
to be issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any shares
46
of Common Stock or other securities will, when issued, be validly authorized and
issued, fully paid and nonassessable.
f. The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Rights Agreement.
g. The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the Chief Executive Officer, 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 officers for advice
or instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
h. The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other entity.
i. The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
47
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
j. If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the form
of assignment or the form of election to purchase set forth on the reverse
thereof, 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
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or without cause)
upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. Notwithstanding the foregoing provisions of this Section 21,
in no event shall the resignation or removal of a Rights Agent be effective
until a successor Rights Agent shall have been appointed and have accepted such
appointment. If the Company shall fail to make such appointment within a period
of 30 days after such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who
48
shall, with such notice, submit his Right Certificate for inspection by the
Company), then the incumbent Rights Agent or the holder of record of any Right
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or any State thereof, in good
standing, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000 or (b) an Affiliate
controlled by a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of
49
Directors to reflect any adjustment or change in the Expiration Date, the
Purchase Price per share and the number, kind or class of shares of stock or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Rights Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock 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
hereinafter 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 Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right 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 the Person to whom such Right Certificate
would be issued, and (ii) no such Right 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.
a. The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the Close of Business on the tenth day
following the Stock Acquisition Date (or if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of Business on the tenth day
following the Record Date), or (ii) the Close of Business on the Final
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption price of $0.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or
50
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). Notwithstanding anything
contained in this Rights Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the Current Market Price, as defined in Section 11(d), of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors of the Company.
b. Immediately upon the action 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,
without any interest thereon, for each Right so held. 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 10 days after the action of the Board of Directors ordering
the redemption of the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding Rights by mailing
such notice to all such holders at 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 of the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. The failure to give
notice required by this Section 23(b) or any defect therein shall not affect the
legality or validity of the action taken by the
51
Company. 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 or in Section 24, and other than
in connection with the purchase of Common Stock prior to the Distribution Date.
Section 24. Exchange.
a. 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 null and void pursuant to the provisions of Section 7(e)) for
Common Stock or Common Stock Equivalents at an exchange ratio of one share of
Common Stock or Common Stock Equivalent per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date of this Agreement (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 an Exempt Person), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of shares of Common Stock representing
50% or more of the shares of the Common Stock 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) 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 shares of Common Stock or Common Stock
Equivalents 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,
52
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall promptly mail a notice
of any such exchange to all of the holders of such Rights at the last addresses
of the holders 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 shares of Common Stock or Common
Stock Equivalents for Rights will be effected and, in the event of any partial
exchange, the number and kind of Rights which will be exchanged. The failure to
give notice required by this Section 24 or any defect therein shall not affect
the legality or validity of any exchange hereunder. Any partial exchange shall
be effected pro rata based on the number of Rights being exchanged (other than
Rights which have become void pursuant to the provisions of Section 7(e)) held
by each holder of such Rights.
c. If there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company may, at
its option, take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
Section 25. Notice of Proposed Actions.
a. If the Company, after the Stock Acquisition Date, shall
propose (i) to effect any of the transactions referred to in Section 11(a)(i) or
to pay any dividend to the holders of record of its Common Stock payable in
stock of any class or to make any other distribution to the holders of record of
its Common Stock (other than a regular periodic cash dividend), or (ii) to offer
to the holders of record of its Common Stock options, warrants, or other rights
to subscribe for or to purchase shares of Common Stock (including any security
convertible into or exchangeable for
53
Common Stock) or shares of stock of any class or any other securities, options,
warrants, convertible or exchangeable securities or other rights, or (iii) to
effect any reclassification of its Common Stock or any recapitalization or
reorganization of the Company, or (iv) to effect any consolidation or merger
with or into, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one transaction or
a series of related transactions not in the ordinary course of the Company's
business, of more than 30% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of record of Rights, in
accordance with Section 26 hereof, notice of such proposed action, which shall
specify the record date for the purposes of such transaction referred to in
Section 11(a)(i), or such dividend or distribution, or the date on which such
reclassification, recapitalization, reorganization, consolidation, merger, sale
or transfer of assets, liquidation, dissolution, or winding up is to take place
and the record date for determining participation therein by the holders of
record of Common Stock, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders of record of the
Common Stock for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of record of Common Stock,
whichever shall be the earlier. The failure to give notice required by this
Section 25 or any defect therein shall not affect the legality or validity of
the action taken by the Company or the vote upon any such action.
b. If any of the transactions referred to in Section 11(a)(ii)
or Section 13 of this Rights Agreement are proposed, then, in any such case, the
Company shall give to each holder of
54
Rights, in accordance with Section 26 hereof, notice of the proposal of such
transaction at least 10 days prior to consummating such transaction, which
notice shall specify the proposed event and the consequences of the event to
holders of Rights under Section 11(a)(ii) or Section 13 hereof, as the case may
be, and, upon consummating such transaction, shall similarly give notice thereof
to each holder of Rights.
Section 26. Notices. Notices or demands authorized by this
Rights Agreement to be given or made by the Rights Agent or by the holder of
record of any Right Certificate or Right to or on behalf of the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Synovus Financial Corp.
X.X. Xxx 000
Xxxxxxxx, Xxxxxxx 00000
Attn: General Counsel
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
record of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
State Street Bank and Trust Company
c/o EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
55
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right Certificate
or Right shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
Section 27. Supplements and Amendments. Prior to the Stock
Acquisition Date, the Company may in its sole and absolute discretion and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Rights Agreement without the approval of any holders of the Rights or
the Common Stock. From and after the Stock Acquisition Date, the Company may and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates 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,
or (iii) to change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable; provided, that no such supplement
or amendment shall adversely affect the interests of the holders of Rights
(other than any interest of 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. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
Section 28. Determinations and Actions by the Board. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular
56
time, including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial Owner,
shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) under
the Exchange Act as in effect on the date of this Agreement. 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 (including a determination to redeem or not redeem the Rights or to
amend this Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights.
Section 29. Successors. All of the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 30. Benefits of this Rights Agreement. Nothing in this
Rights Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights Agreement
shall
57
be for the sole and exclusive benefit of the Company, the Rights Agent and the
holders of record of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 31. Georgia Contract. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Georgia and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts to
be made and performed entirely within such state.
Section 32. Counterparts. This Rights Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several sections of this Rights Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 34. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Rights Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
Attest: SYNOVUS FINANCIAL CORP.
By:/s/Garilou Page By:/s/Xxxxxxxx Xxxxxx
-------------------------------- ---------------------------------
Name: Garilou Page Name: Xxxxxxxx Xxxxxx
Title: Assistant Secretary Title: Senior Vice President
58
Attest: STATE STREET BANK AND TRUST
COMPANY
By:/s/Xxxxxxx X. Xxxxxxx By:/s/Xxxxxxx X. Xxxxx
-------------------------------- ---------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxx
Title: Account Manager Title: Vice President
59
EXHIBIT A
[Form of Right Certificate]
Certificate No. W- ________ Rights
NOT EXERCISABLE AFTER MAY 4, 2009 OR UNDER CERTAIN CIRCUMSTANCES
EARLIER. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. IN THE EVENT THAT THE RIGHTS REPRESENTED BY THIS CERTIFICATE
ARE ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON OR A TRANSFEREE OF THE RIGHTS
PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY WILL BECOME NULL AND VOID.
Right Certificate
Synovus Financial Corp.
This certifies that _________________________ or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of April 27, 1999 ("Rights
Agreement") between Synovus Financial Corp., a Georgia corporation ("Company"),
and State Street Bank and Trust Company ("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. (Eastern Standard Time) on May 4, 2009
at the principal office of the Rights Agent, or its successors as Rights Agent,
one fully paid and nonassessable share of Common Stock, par value $1.00 per
share ("Common Stock"), of the Company at a purchase price of $225.00 as the
same may from time to time be adjusted in accordance with the Rights Agreement
("Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed.
As provided in the Rights Agreement, the Purchase Price and
the number of shares of Common Stock which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Common Stock, or other property,
may be acquired upon exercise of the Rights evidenced by this Right Certificate,
as provided by the Rights Agreement.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities of the Rights
Agent, the Company and the holders of record of the Right Certificates. Copies
of the Rights Agreement are on file at the principal executive office of the
Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder of record to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $0.001 per Right or (ii) may be exchanged in whole or
in part for shares of Common Stock or common stock equivalents.
No fractional shares of Common Stock shall be issued upon the
exercise of any Right or Rights evidenced hereby, and in lieu thereof, as
provided in the Rights Agreement, fractions of shares of Common Stock shall
receive an amount in cash equal to the same fraction of the then current market
value of a share of Common Stock.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Common Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
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
(except as provided in the Rights Agreement) or other actions affecting
shareholders or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal, dated as of _____________________, ____.
ATTEST: SYNOVUS FINANCIAL CORP.
________________________________________ By:_________________________________
Secretary Title:
Countersigned
State Street Bank and Trust Company, Rights Agent
By: ________________________________________
Authorized signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________ hereby sells, assigns
and transfers unto _____________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
___________________ Rights evidenced by this Right Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint ___________ Attorney to transfer the within Right Certificate on the
books of the within-named 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.
-1-
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right 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 Right
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or any transferee of such Persons.
Dated: ____________ __, _____
____________________________________
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
-2-
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to Exercise the
Right Certificate.)
To: Synovus Financial Corp.
The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Right Certificate to purchase
the shares of Common Stock issuable upon the exercise of such Rights and
requests that certificates for such share(s) be issued in the name:
------------------------------------------------------
(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 Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
------------------------------------------------------
(Please print name and address)
------------------------------------------------------
(Please insert social security or other identifying number)
Dated: ___________________, ______
__________________________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
-3-
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 Right 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) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or any transferee of such Persons.
Dated:____________________, ______
____________________________________
Signature
-4-
EXHIBIT B
SYNOVUS FINANCIAL CORP.
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On April 27, 1999, the Board of Directors of Synovus Financial Corp.
(the "Company") adopted a Shareholder Rights Plan pursuant to a Rights Agreement
(the "Rights Agreement") and authorized and declared a dividend of one Common
Stock Purchase Right (a "Right") with respect to each outstanding share of
common stock, par value $1.00 per share ("Common Stock"), of the Company. The
dividend is payable on May 4, 1999 to the shareholders of record on that date
(the "Record Date"), and to each holder of Common Stock issued thereafter until
the Distribution Date (as hereinafter defined) or the expiration or earlier
redemption of the Rights. Except as set forth below, each Right entitles the
registered holder thereof to purchase from the Company at any time after the
Distribution Date one share of Common Stock at a price of $225.00 per share,
subject to adjustment (the "Purchase Price"). The description and terms of the
Rights are set forth in the Rights Agreement.
Initially, the Rights will attach to all certificates of outstanding
shares of Common Stock, and no separate Right Certificates (as hereinafter
defined) will be distributed. The Rights will become exercisable and separate
from the shares of Common Stock upon the earlier to occur of (i) ten days after
the date (the "Stock Acquisition Date") of a public announcement that a person
or group of affiliated or associated persons has acquired beneficial ownership
of 15% or more of the outstanding Common Stock (such person or group being
hereinafter referred to as an "Acquiring Person"2); or
--------
2 Each of the following persons will not be deemed to be an Acquiring
Person even if they have acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding Common Stock:
(i) the Company, any subsidiary of the Company, or any employee benefit
plan of the Company or of any subsidiary of the Company; (ii) any
shareholder who is a descendant of X. Xxxxxx Xxxxxx (the "Xxxxxx
Family"), any shareholder who is affiliated or associated with the
Xxxxxx Family and any person who would otherwise become an Acquiring
Person as a result of the receipt of Common Stock or a beneficial
interest in Common Stock from one or more members of the Xxxxxx Family
by way of gift, devise, descent or distribution, but not by way of
sale, unless any such person, together with his affiliates and
associates, becomes the beneficial owner of more than 30% of the
outstanding shares of Common Stock; (iii) any person who would
otherwise become an Acquiring Person solely by virtue of a reduction in
the number of outstanding shares of Common Stock unless and until such
person shall become the beneficial owner of any additional shares of
Common Stock; and (iv) any person who as of the Record Date was the
beneficial owner of 15% or more of the outstanding Common Stock unless
and until such person shall become the beneficial owner of any
additional shares of Common Stock.
-1-
(ii) ten business days (or such later date as the Board may determine) following
the commencement of, or announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would result in a person or group
becoming the beneficial owner of 15% or more of the outstanding Common Stock
(the earlier of such dates in clauses (i) and (ii) being called the
"Distribution Date"). Shares of Common Stock beneficially owned by the Company
or any subsidiary of the Company will not be considered outstanding for purposes
of calculating the percentage ownership of any person.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be evidenced by the certificates for the Common
Stock, (ii) the Rights will be transferred with, and only with, the shares of
Common Stock, (iii) new Common Stock certificates issued after the Record Date
upon transfer or new issuance of shares of Common Stock will contain a notation
incorporating the Rights Agreement by reference, and (iv) the surrender for
transfer of any certificates for shares of Common Stock outstanding as of the
Record Date, even without such notation, will also constitute the transfer of
the Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (collectively, the "Right Certificates") will
be mailed to holders of record of the shares of Common Stock as of the close of
business on the Distribution Date, and such separate Right Certificates alone
will evidence the Rights. The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on May 5, 2009, unless
earlier redeemed by the Company as described below.
If any person becomes an Acquiring Person, each holder of a Right will
thereafter have the right (the "Flip-In Right") to receive upon payment of the
Purchase Price, shares of Common Stock (or in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the Purchase Price of the Right. Notwithstanding the foregoing, all Rights that
are, or were, beneficially owned by an Acquiring Person or any affiliate or
associate thereof will be null and void and not exercisable.
If, at any time on or after the Stock Acquisition Date, (i) the Company
is acquired in a merger or other business combination transaction in which the
holders of all of the outstanding shares of Common Stock immediately prior to
the consummation of the transaction are not the holders of all of the surviving
corporation's voting power, or (ii) more than 30% of the Company's assets, cash
flow or earning power is sold or transferred other than in the ordinary course
of the Company's business, then each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right (the
"Flip-Over Right") to receive, in lieu of shares of Common Stock and upon
exercise and payment of the Purchase Price, common shares of the acquiring
company having a value equal to two times the Purchase Price. If a transaction
would otherwise result in a holder's having a Flip-In as well as a Flip-Over
Right, then only the Flip-Over Right will be exercisable. If a transaction
results in a holder's having a Flip-Over Right subsequent to a
-2-
transaction resulting in a holder's having a Flip-In Right, a holder will have
Flip-Over Rights only to the extent such holder's Flip-In Rights have not been
exercised.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
dividends payable in Common Stock) or of subscription rights or warrants (other
than those referred to above). However, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%.
The number of outstanding Rights and the number of shares of Common
Stock issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivisions, consolidations or combinations of
the Common Stock occurring, in any such case, prior to the Distribution Date.
At any time after a Person becomes an Acquiring Person and before the
acquisition by a Person of 50% or more of the outstanding Common Stock of the
Company, the Board of Directors may, at its option, issue Common Stock or common
stock equivalents of the Company in mandatory redemption of, or in exchange for,
all or part of the then outstanding exercisable Rights (other than Rights owned
by such Acquiring Person which would become null and void) at an exchange ratio
of one share of Common Stock, or common stock equivalents equal to one share of
Common Stock, per Right, subject to adjustment.
To the extent that, after the triggering of Flip-In Rights,
insufficient shares of Common Stock are available for the exercise in full of
the Rights, holders of Rights will receive upon exercise shares of Common Stock
to the extent available and then cash, property or other securities of the
Company, in proportions determined by the Company, so that the aggregate value
received is equal to twice the Purchase Price.
The Company is not required to issue fractional shares of Common Stock
and in lieu thereof, a payment in cash will be made to the holder of such Rights
equal to the same fraction of the current value of share of Common Stock.
Following the triggering of the Flip-In Rights, the Company will not be required
to issue fractional shares of Common Stock upon exercise of the Rights and, in
lieu thereof, a payment in cash will be made to the holder of such Rights equal
to the same fraction of the current market value of a share of Common Stock.
At any time prior to the Distribution Date, the Board of Directors of
the Company may redeem all, but not less than all, of the then outstanding
Rights at a price of $.001 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such
-3-
basis and with such conditions as the Board of Directors in its sole discretion
may establish. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The issuance of the Rights is not taxable to the Company or to
shareholders under presently existing federal income tax law, and will not
change the way in which shareholders can presently trade the Company's shares of
Common Stock. If the Rights should become exercisable, shareholders, depending
on then existing circumstances, may recognize taxable income.
Prior to the Stock Acquisition Date, the Rights Agreement generally may
be amended by the Company without the consent of the holders of the Rights or
the Common Stock. On or after the Stock Acquisition Date, the Company may amend
the Rights Agreement only to (i) cure any ambiguity, (ii) correct or supplement
any provision which may be defective or inconsistent with the other provisions
of the Rights Agreement, or (iii) change or supplement the Rights Agreement in
any other manner which the Company may deem necessary or desirable, provided
that no amendment shall adversely affect the interests of the holders of Rights
(other than any interest of an Acquiring Person or an affiliate or associate of
an Acquiring Person).
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. Accordingly, the
existence of the Rights may deter certain acquirors from making takeover
proposals or tender offers. However, the Rights Agreement helps ensure that the
Company's shareholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The Rights should not interfere with any
merger or other business combination approved by the Board of Directors because
the Rights may be redeemed by the Company at the Redemption Price prior to the
time that a person or group has acquired beneficial ownership of 15% or more of
the outstanding Common Stock. The adoption of the Rights Agreement is not in
response to any specific takeover threat or proposal, but is a precaution taken
to protect the rights of the Company's shareholders.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form 8-A with respect to the Rights filed with the Securities and Exchange
Commission. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
incorporated in this summary description by reference.
Disclosure Regarding Forward-looking Statements
-4-
Certain matters discussed herein may constitute Forward-looking
Statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Act of 1934, as amended, each as
amended by the Private Securities Litigation Reform Act of 1995. Those
statements include statements regarding the intent, belief or current
expectations of the Company and members of its management team as well as the
assumptions on which such statements are based. Any such Forward-looking
Statements are not guarantees of future performance and the Company's actual
results could differ materially from those set forth in such Forward-looking
Statements. Factors currently known to management that could cause actual
results to differ materially from those set forth in such Forward-looking
Statements include risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission, including Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and Annual Reports on Form 10-K. The Company
undertakes no obligation to update or revise Forward-looking Statements to
reflect changed assumptions, the occurrence of unanticipated events or changes
to future operating results over time.
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